Asheville Airbnb owner guilty of $3.5 million fraud; the judge raises plea questions
ASHEVILLE — A well-known short-term vacation rental owner pleaded guilty to more than $3.5 million in federal bank fraud in a hearing in which the judge raised questions about how he answered some questions.
Shawn Thomas Johnson, a once-famous local handyman, entrepreneur and owner of short-term rentals, often referred to as “Airbnbs” after the online platform, pleaded March 25 in U.S. District Court in Asheville.
U.S. Magistrate Judge W. Carleton Metcalf set an unsecured bail of $25,000, allowing Johnson, 36, to remain free pending sentencing, which could be six months away, based on current case trends.
Metcalf ordered Johnson pending sentencing to avoid contact with victims and witnesses and not to sell or buy real estate, directly or through others.
Previous report:Asheville Airbnb Realtor License Revoked; kept owners money
Prior to his plea, Johnson waived the right to submit his case to a grand jury. While answering questions about whether he agreed with the facts laid out by Assistant U.S. Attorney Don Gast – that Johnson lied to banks about how much he was earning, fabricated pay stubs and said that the loans would be used for primary residences while instead being used as short-term rentals – Johnson said he had no problem with the facts “at this time”.
Metcalf replied, “I’m not sure what that means” and again asked if Johnson agreed with the facts as stated, to which Johnson said yes.
When Metcalf asked Johnson if he agreed that the bank fraud charge could be proven “beyond a reasonable doubt”, Johnson said yes, making a request that caught the judge’s attention.
“I hear the words you say, but your body language sends a different message,” Metcalf said.
Johnson then told the judge he agreed.
It’s unclear what type of punishment Johnson will face, although the maximum sentence is 30 years in prison and a $1 million fine.
Hyman “Chip” Young III watched the proceedings and then approached Gast, the US attorney. Speaking to the Citizen Times, Young said Johnson tried in 2020 to buy 4 acres of land from his father, Hyman Young Jr., through an owner-funded mortgage deal. But her father, who is now 79, refused, calling it a scam.
“He told people he was going to make my dad’s life hell until he got his property,” Young said.
Young said Johnson falsely claimed his father pointed a gun at him, which resulted in Young’s arrest. Court records show a 2020 assault charge with pointing a gun against Hyman Young Jr. was dismissed.
Reached after the hearing, Johnson’s attorney, Thomas Amburgey, declined to comment. Johnson did not return a message seeking comment.
Records also show that Johnson attempted to take out a restraining order against Hyman Young Jr. that same year, though it was denied for lack of grounds.
Hyman Young Jr. is now suing Johnson in Buncombe County Superior Court, claiming that Johnson, who manages short-term rentals on property next to the four-acre 4, trespassed, took materials from their land, cut down trees and build structures on the property line.
Johnson denied the allegations, according to court records.
Chip Young said he contacted the federal prosecutor because he didn’t want Johnson “to get a slap on the wrist.”
Before Johnson’s call, his former business partner Whit Riley, who said Johnson defrauded him of a property they bought together by forging his signature also called for a severe sentence.
None of the allegations were related to Johnson’s bank fraud.
Specific aspects of the fraud included:
- Saying the houses would be used as primary residences when in fact they were meant to be used as short term rentals.
- Lying about employment and falsifying pay stubs.
- Omit prosecution information.
- Presentation of fictitious rental contracts.
- Do not disclose the existence of other loans or financial obligations.
In three specific instances, Johnson admitted to making up a job and fabricating payslips to obtain a $225,000 loan from the State Employees Credit Union for a house east of Asheville on Springwood Drive; worked with an unnamed Navy veteran “co-conspirator” to secure a $265,000 Veterans Administration-backed loan for a Leicester home on Daniel Brook Drive for short-term rental, although the loans VA are only for primary residences; and worked with another unnamed co-conspirator to secure a US$247,435 housing and urban development insured loan to buy an East Asheville home on Pine Cone Drive, claiming it was to be a primary residence then that it was in fact becoming a short-term rental.
In some cases, the short-term rental transactions violated local rules, which would have prevented banks from granting the loans, Gast said. Asheville has some of the strictest regulations in the area, prohibiting new short-term rentals in most locations. Exceptionally, owners can rent for short periods a room or two in a house shared by a long-term resident.
Johnson previously faced federal prosecution when he was convicted in 2010 in Asheville of forgery.
He later rose to prominence as a hard-working handyman and local entrepreneur whose praises were sung on social media, including the WAX (West Asheville Exchange) Facebook page.
In 2015, he obtained a limited state real estate license. A year later, he was chosen as one of the featured speakers for a local economy forumorganized by Western Carolina University and the Citizen Times.
But in February 2019, state real estate regulators revoked Johnson’s license, saying he retained “at least” tens of thousands of dollars owed to short-term rental owners whose properties he managed. An Airbnb spokesperson said the company deleted his account earlier this year.
In 2020, police charged Johnson with repeatedly violating COVID-19 restrictions by operating a short-term rental.
Joel Burgess has lived at the WNC for over 20 years, covering politics, government and other news. He has written award-winning stories on topics ranging from gerrymandering to police use of force. Do you have any advice? Contact Burgess at [email protected], 828-713-1095 or on Twitter @AVLreporter. Please help support this kind of journalism with a subscription at the Citizen Times.