Manafort Money Laundering Scheme Highlights Airbnb’s Lack of Transparency
The news of the federal indictment of Paul Manafort, who was charged with money laundering through his illegal short-term rental property listed on Airbnb in New York City, which has come to light in large part to this report by Bloomberg, shines a flood light on the lack of transparency and the flouting of the law at Airbnb. Paul Manafort purchased the property in question telling lenders that it would be a primary resident for his daughter, Jessica, who at the same time signed leases for four apartments on Broome Street.
In New York City, it is illegal to rent an apartment for less than 30 days when the primary resident is not present, and yet Jessica Manafort was apparently listing multiple properties on Airbnb and pocketing $30k a month. Unfortunately, this is not an isolated occurrence for the platform.
Airbnb allows hedge funds and shady investors to run illegal hotels in cities across the country. Manafort’s indictment blows holes in Airbnb’s claims of being a ‘mom and pop’ home sharing site — it is a multi-billion-dollar corporation profiting from the illegal use of its platform by commercial interests.
More than 30% of Airbnb’s profit is generated by commercial hosts who are buying up residential units and converting them into illegal short-term rentals. According to the Wall Street Journal, this trend is causing rents to soar and depleting affordable housing stock in cities across the country.
Airbnb’s lack of transparency and its empowerment of law-breakers harm communities in New York and beyond. Legislators must pass stronger short-term rental regulations now.