News & Opinion | June 24, 2019 9:51 am

Inside New York’s Illegal $5 Million Airbnb Scheme

How a small network of fraudsters created an illegal Airbnb empire

An illegal Airbnb scheme hosted thousands of guests in unsafe conditions
An illegal Airbnb scheme hosted thousands of guests in unsafe conditions
Rafael Henrique/SOPA Images/LightRocket/Getty

Back in May, the city of New York partially shuttered a three-story Astoria townhouse after a visit from a New York City Department of Buildings inspector found the multi-family residence had been illegally converted into 12 rooms equipped to squeeze in 24 guests for nightly rental.

Before the shut-down, the building had housed more than 2,600 Airbnb guests for a total of 2,268 nights, earning its host over $210,000. The “imminently perilous” residence, in which authorities discovered a gas leak as well as a lack of fire alarms and required exits, was part of a network of 36 buildings in Queens, Manhattan and Brooklyn that had been illegally converted into short-term rentals available through Airbnb, Wired reported.

Since 2015, the scheme reportedly earned over $5 million through the room-sharing platform, which was used by 63,873 guests to book 24,330 rooms operated illegally throughout the city.

A lawsuit filed last week points to real-estate agent Elvis Tominovic as the mastermind behind the illegal Airbnb empire. The suit names Tominovic among a dozen defendants, including his sister, mother, father, friend, domestic partner, domestic partner’s sister, and four corporations associated with them, thought to be operating illegal rentals using an array of fake Airbnb host accounts and shared or connected phone numbers and bank accounts.

According to the suit, the operators of the host accounts would often list fake addresses, later texting the correct locations to guests once the residence had been booked. Guests were also reportedly coached to ignore authorities and often instructed not to open the door under any circumstances. When guests arrived to one of the Astoria residences, they were greeted by a posted notice warning them to beware of government officials. “They will try to intimidate you and tell you that they need to check for fire hazards in the house but these are all tricks to get in the house,” the note reportedly stated. “They might even tell you they are the police but this is illegal, they are not the police. DO NOT LET ANYONE IN THE HOUSE. Let’s keep Airbnb alive! :)”

Airbnb and New York officials have long been at war, thanks to the city’s strict short-term rental laws that prohibit renting an entire apartment or home for fewer than 30 days without the owner present.

“We have long said that we want to work with the city on a regulatory framework that will provide for effective enforcement against illegal hotel operators,” Airbnb spokesperson Liz DeBold Fusco told Wired. “After working with the city and providing data in response to valid legal process, we will continue to urge the city to come to the table, so that we can find a solution that addresses our shared enforcement priorities while still protecting the rights of regular New Yorkers.”

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