News, Santa Monica, City Attorney

Two Brothers Convicted In Santa Monica Vacation-Rental Scam

Posted Sep. 24, 2013, 9:36 am

Brenton Garen / Editor-in-Chief

Two brothers based in the San Fernando Valley have been being convicted for participation in a Santa Monica vacation-rental scam.

Eran "Ron" Shabtay, 43, and his brother Yerev "Reeve" Shabtay, 42, pled guilty to four criminal counts each, including false advertising and illegal tenant lockout, as part of an agreement with prosecutors.

The pair were convicted of misleading consumers in a vacation rental scam involving two Santa Monica properties which they owned and rented out to tourists on a short-term basis.

The Santa Monica City Attorney's Office filed criminal charges against the Shabtays in November 2012 after receiving complaints from more than a dozen consumers who came to visit Santa Monica from as far away as Norway and Australia.

The defendants owned and operated two rental properties, one on Second Street and the other on Pacific Street. They advertised on the websites Vrbo.com and Homeaway.com.

Consumers paid in full for their vacation rentals by credit card, months in advance, some paying as much as $5,000. According to consumers' complaints:

- Many never got access to the property after arriving in town.

- Others' credit cards were charged more than the agreed amounts.

- Many arrived in Santa Monica only to discover that the actual rental property was far smaller than advertised, and in terrible condition.

- Some were double-booked with other customers for the same property on the same dates.

- The Shabtays refused to return customers' calls and emails, and wouldn't refund their money.

Under the terms of the convictions:

1. The Shabtays each must perform between 80 and 104 hours of hard labor;

2. Each must perform 100 hours of community service;

3. They must pay a total of $23,485.73 to complete the refunds to all customers in the case who have not already gotten credit card reversals;

4. They must pay $30,000.00 to the City of Santa Monica's Consumer Protection Fund;

5. Both defendants are placed on four years' probation; and

6. They are prohibited from doing any more short-term rentals in Los Angeles County.

The Shabtays entered their pleas in the LAX courthouse of the Los Angeles County Superior Court on Sept. 18, 2013.

"False advertising is a serious crime," said Deputy City Attorney Adam Radinsky. "It cheats consumers and it gives dishonest businesses an unfair advantage over honest ones. Consumers need to know that they can trust what is promised to them, including online ads. Also, it's illegal in Santa Monica to rent out any residential property on a short-term basis."

Radinsky said short-term basis is defined as less than 30 days.