Santa Monica Lookout
Brothers Sentenced in Santa Monica Vacation Rental Scam
By Jason Islas
September 24, 2013 -- Eran and Yerev Shabtay, two brothers in their early 40s, pled guilty Wednesday to defrauding tourists in a Santa Monica vacation rental scam.
The brothers admitted to scamming customers out of thousands of dollars by making them pay up front to stay at one of two properties in Santa Monica, one on Second Street and the other on Pacific Street.
But those customers, who booked their accommodations through Vrbo.com and Homeaway.com, later couldn't get into the properties or found them to be double-booked or in terrible condition, according to City officials.
And when the customers tried to reach the Shabtays for refunds, sometimes for amounts in excess of $5,000, the brothers were nowhere to be found.
“This is definitely the worst false-advertising we've seen for vacation rental businesses,” said Deputy City Attorney Adam Radinsky.
While the brothers were also in violation of another City ordinance that prohibits the short-term rental of units, Radinsky said that the City decided not to focus on that when it filed criminal charges against the Shabtays in November 2012.
“The case was much more about false advertising and fraudulent charges on people's credit cards” instead of violating the short-term rental ordinance, said Radinsky, who heads the City's Consumer Protection Unit.
“We're pleased that we were able to get all of the consumers their money back,” he said. “We made sure that all of their money was returned.”
The court ordered the Shabtays to repay more than $23,000 in refunds to customers as well as $30,000 to Santa Monica's Consumer Protection Fund.
The brothers will also have to perform 80 to 104 hours of hard labor and 100 hours of community service each, while on four years probation.
Finally, they are barred from renting out units short-term in Los Angeles County.
The City filed charges against the duo after receiving more than a dozen complaints from visitors who came to visit Santa Monica from all over the world.
“When we investigated, we learned that there were a number of other complaints,” he said, adding that the websites that hosted the brothers' properties were “well-aware” that costumers had been complaining about the brothers' operation.
This isn't the first time Santa Monica has addressed issues of false advertising.
In January, the City demanded that six dry cleaners in Santa Monica stop touting their services as environmentally safe or non-toxic after an investigation revealed their claims were far too broad to be meaningful. (“Santa Monica Dry Cleaners Must Drop Eco-Friendly Claims, Officials Say,” January 23)
Radinsky recommends exercising caution to avoid becoming a victims of false advertising.
“People have to be very careful with internet transactions,” he said. “Before you make a credit card payment, make sure to investigate the company.”
He said, “You can always check with the local licensing agency. And consumers can always ask if someone has a business license.”
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