Airbnb Tried to Hide a Crime In One Property By Paying $7 Million

On New Year's Eve 2015, a young woman stayed at an Airbnb in New York, unaware that she would be the victim of a crime that the company would try to keep a secret.
Airbnb Tried to Hide a Crime In One Property By Paying $7 Million
Image credit: Depositphotos.com

Grow Your Business, Not Your Inbox

Stay informed and join our daily newsletter now!
Entrepreneur Staff
6 min read
This article was translated from our Spanish edition using AI technologies. Errors may exist due to this process.

Much of Airbnb's success is based on the trust that customers have with the company when renting accommodations. However, the platform is far from foolproof when it comes to guaranteed security. It was recently revealed that the company tried to hide a crime that occurred in one New York property for $7 million.

The events occurred on New Year's Eve 2015 in an apartment located on the first floor of a West 37th Street apartment in New York City. A 29-year-old Australian girl arrived with a group of friends to enjoy the iconic Manhattan-style festivities. As indicated by the landlord, the guests collected the keys at the counter of a nearby warehouse and settled down.

After ringing in the new year, the young woman left her friends at the bar and returned to the apartment alone, without imagining that someone was waiting inside. The stranger stepped out of the shadows, threatened her with a kitchen knife, pushed her onto the bed and sexually abused her.

Although the streets were full of people, fear paralyzed the girl and she could not scream. In the end, the attacker fled with the victim's phone, but she managed to contact her friends with an iPad so that they could contact authorities.

An hour later, when the agents were in the apartment, the criminal made the mistake of returning and leaning out the door, which is how he was caught. In his backpack they found three incriminating items: a knife, an earring from the woman and a set of keys to the property.

Nothing happened here

That morning, the victim received a call from Nick Shapiro, a crisis manager at Airbnb. He notified Airbnb executives, (including CEO Brian Chesky) of the incident.

At the same time, an elite security team from the company relocated the victim to a hotel, flew her mother from Australia to New York and back for free and offered to cover health and counseling costs.

A week later, Airbnb sent a staff member to court to see if the company was mentioned during the legal proceedings, but they were not. The local media also did not report on the case.

According to information revealed by Bloomberg Businessweek, Airbnb paid the woman $7 million as compensation for the attack. In return, she signed an agreement agreeing not to talk about the payment "or imply liability" to the company or the host. While the deal doesn't prevent the victim from cooperating with prosecutors, the victim can't blame or sue the company either.

The woman (who asked not to be identified declined to comment, as did her lawyer. What is known about the crime is the product of an investigation based on police and judicial records, confidential documents and interviews with people close to the case.

Security issues on Airbnb

The set of keys that the criminal had in his hands called into question Airbnb's security policies, since at that time and date the company did not have clear rules regarding the delivery of keys for tenants.

Although it is not known with certainty how the attacker obtained the duplicate, it is speculated that it was as simple as ordering them at the nearby winery posing as a guest.

The Bloomberg Businessweek investigation compiles several recorded crimes in Airbnb accommodations, from theft and vandalism to physical assault and sexual assault, among others. Much of it has been handled internally through confidential agreements and payments to victims.

Airbnb has a crisis control team made up of about 100 agents distributed in different cities around the world. They are allowed to spend whatever is necessary as long as the victim feels supported. This includes payment for flights, accommodation, food, counseling, health cost and sexually transmitted disease screenings for rape survivors.

A confidential document seen by the outlet shows that in recent years Airbnb spent an average of $50 million annually on payments to hosts and guests, including legal settlements and damage to homes.

They cannot control incidents, but their response as a company can

Airbnb was founded in 2008 by design students Brian Chesky and Joe Gebbia, along with engineer Nate Blecharczyk. The company currently rents over 5.6 million properties, more than the total number of rooms in the seven major hotel chains worldwide combined. The company's market value is $90 billion, and its share price has doubled since it went public in December 2020.

Airbnb's business model is based on the idea that strangers can trust each other. However, the company admits that is not able to guarantee total security for their tenants and hosts.

"You're dealing with real people in real people's homes," says Tara Bunch, Airbnb's Director of Global Operations. "People are naturally unpredictable and, try as we might, occasionally really bad things happen."

The executive adds that "We know that everything cannot be stopped," but in the end what is important is the company's response to the unexpected.

"We go the extra mile to ensure that anyone affected on our platform is served," says Bunch. "We don't really care about the branding and image component ."

The alleged rapist of the Australian girl, 24-year-old Junior Lee, was charged with predatory sexual assault with a maximum sentence being set at life imprisonment. With 40 misdemeanor convictions on his record, Lee has pleaded not guilty and bail was set at $ 250,000.

With information from El Financiero Bloomberg.

More from Entrepreneur
Entrepreneur Select: A Fund For Entrepreneurs, By Entrepreneurs

Entrepreneurs require more than just money, which is why we aim to empower you, as well as act as a catalyst for value creation.

Make sure you’re covered if an employee gets injured at work by
  • Providing us with basic information about your business
  • Verifying details about your business with one of our specialists
  • Speaking with an agent who is specifically suited to insure your business
Whether you want to learn something new, be more productive, or make more money, the Entrepreneur Store has something for everyone:
  • Software
  • Gadgets
  • Online Courses
  • Travel Essentials
  • Housewares
  • Fitness & Health Devices
  • And More

Latest on Entrepreneur