LA QUINTA – An ongoing investigation of the Luxe Vacation Home “Ponzi scheme” shows how the business has ripped off renters, homeowners and other services. A former Luxe homeowner said the city is also in the mix.
“Somebody accidentally sent me two different statements and they had two different reservation numbers and two completely different dollar amounts,” Mimi Jones, a former rental homeowner with Luxe, said.
Jones started renting her home out with Luxe Vacation Homes, a short-term rental service in La Quinta, back in 2014.
The now closed company sent Jones two reservation notifications with different account numbers and she immediately knew something was wrong.
The first statement read one reservation number and four days later, she was accidentally sent a second statement for the same rental with a contradicting reservation number.
The reservation amounts were also inconsistent, leading Jones to believe the rental company was operating off of two books.
In emails, Jones told the company “it is clear that books are manipulated.”
“They called me and claimed that I was ignorant to how the whole process worked,” Jones said.
Homeowners around the valley told KMIR this scam is just one out of many that Justin Steubs, the company’s owner, pulled on them.
This scheme could also affect the cities in which the Luxe Vacation Homes were located.
Palm desert, Indio and La Quinta are a few of the affected cities.
“They [property manager] are responsible for paying a 29 dollar license fee for each home that they manage,” Pedro Rodriguez, the code compliance supervisor for Palm Desert, said. “They are also responsible for collecting the TOT tax available to the city based on the income that that home owner makes at 11 percent.”
According to Ramirez, TOT stands for transient occupancy tax. It’s money that’s paid to the city for hotels or short-term rentals.
TOT payments differ from city to city in the Coachella Valley but stay in the nine to thirteen percent range. Last year, the TOT brought in $1.9 million for the city of Palm Desert.
If homeowners or businesses like Luxe are registering incorrect amounts, the payments to the city could also be incorrect, Jones said.
KMIR showed up to Steubs’ and his mother’s house for comment but neither answered. Steubs’ mother, Shelley Mast, is the CFO of the company.
The TOT records for Luxe are not public information, according to the city of La Quinta.
“I don’t think they have a handle on the whole TOT’s,” Jones said. “I think this is all so new.”
Ramirez said the code compliance office is working to crack down on these payments.
“There are a lot of people who are operating under the radar but we do have a swing shift officer that works on the evenings and we do get a lot of complaints in the evening hours on our hotline,” Ramirez said. “He goes out there and knocks on doors and makes contact with people.”
The investigation for the case remains in the Riverside County District Attorney’s office.