(LOS ANGELES) – Today, City Attorney Hydee Feldstein Soto announced that her office has filed a civil enforcement action against Defendants who allegedly violated California’s Unfair Competition Law (“UCL”) and the City’s Short-Term Rental Ordinance (“STR”) thousands of times, earning more than $4 million through their fraudulent and illegal business practices. This illegal activity includes leasing properties from owners on a long-term basis and then turning around and offering them as short-term rentals on Airbnb and other platforms - a scheme known as “short-term rental arbitrage” - through the alleged illegal short-term rental ring they operate.
The Defendants are alleged to have lied about the locations of their properties to bypass City laws and requirements, only revealing the location after guests completed bookings. One of the defendants, a social media influencer, bragged about making hundreds of thousands of dollars a month, and offered to teach others how to duplicate this scheme. Feldstein Soto’s lawsuit seeks a permanent injunction stopping the defendants from engaging in these unlawful business practices and up to $15 million in civil penalties.
“As renters battle a severe housing shortage and sky high rent, these Defendants exacerbated our housing crisis by leasing at least 30 apartments and houses from their owners and illegally renting them out as short-term rentals, violating California’s Unfair Competition Law, the City’s Home-Sharing Ordinance, and our Rent Stabilization laws,” said Hydee Feldstein Soto, Los Angeles City Attorney. “Our housing laws were enacted for a reason and I’ll always work to enforce them and hold violators accountable - in this case, working to address the multiple illegal practices at-scale.”
The Defendants are individuals Vladyslav Yurov, Anastasiia Medvedeva, and Mari Meladze Nagi, and Skysun LLC, and Hugs & Smile, Inc.. Yurov formed and used Skysun to conduct and manage his illegal short-term rental business. Yurov and Medvedeva formed and used, and continue to use, Hugs & Smile in a similar fashion. None of the Defendants have a Business Tax Registration Certificate issued by the City.
According to Feldstein Soto’s complaint, the Defendants allegedly violated and continue to violate the City’s Short-Term Rental Ordinance on a massive scale - offering, advertising, booking and facilitating the rental of properties on a short-term basis without the registrations required by the City. Rent stabilized apartments, which are ineligible for short-term rental under the Ordinance, are among the properties offered as short-term rentals. Short-term rentals refer to those properties that are rented for 30 consecutive days or fewer. The complaint also alleges that Defendants violated the Unfair Competition Law through false statements and misrepresentations, including regarding the actual location of the rentals.
The Defendants utilized a scheme called “short-term rental arbitrage,” leasing properties from owners on a long-term basis, and then renting them out short-term on Airbnb and other online platforms. The complaint alleges that in order to facilitate and conceal their illegal short-term rental business, the Defendants lied to and defrauded, among others, guests and potential guests, and the owners of certain properties they short-term rented. After being served with cease-and-desist letters from City Attorney prosecutors in January 2024, the Defendants continued their unlawful conduct and, despite assurances that they would stop, moved some of their properties to other Airbnb accounts they manage in an effort to hide their illegal practices.
This enforcement action was filed by the City Attorney’s Public Rights Branch which is also overseeing the litigation against The Nightfall Group, a company alleged to have listed several hundred properties for short-term rental in violation of the City’s Short-Term Rental Ordinance and Party House Ordinance.
Superior Court of the State Of California - County of Los Angeles, Case #24STCV15416
The People of the State of California, Plaintiff, v. Vladyslav Yurov, an individual, Skysun LLC, a California limited liability company, Anastasiia Medvedeva, an individual, Hugs & Smile, Inc., a California corporation, Mari Meladze Nagi, an individual; Defendants.
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Hydee Feldstein Soto is the 43rd Los Angeles City Attorney, elected in November 2022 and sworn into office in December 2022. Her team of more than 1,000 legal professionals, including 550 attorneys, carries out legal work for the City of Los Angeles at her direction and under her supervision. She is the first female City Attorney in L.A. history.