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California Attorney General Charges Real Estate Agent with Price Gouging Amid Wildfire Crisis

California Attorney General Rob Bonta speaks during a press conference Tuesday, Oct. 8, 2024, in San Francisco. (AP Photo/Minh Connors)

Los Angeles, CA — In the aftermath of the devastating Eaton Fire, California Attorney General Rob Bonta has filed charges against a Southern California real estate agent accused of price gouging a couple displaced by the blaze.

Announced on Jan. 22, this marks the first legal action taken against alleged profiteering following the recent wildfires that have ravaged the region.

The accused, identified as Mike Kobeissi, a real estate agent based in La Cañada Flintridge, allegedly increased the monthly rent of a property from $8,700 to $12,000—a 38% hike—after the couple applied to rent the home.

Such an increase exceeds the 10% limit imposed by California’s anti-price gouging statute during a state of emergency.

Violations of this law can result in fines up to $10,000 and imprisonment for up to one year.

Bonta emphasized the state’s commitment to protecting vulnerable residents during crises.

“As I have said repeatedly, the price gouging must stop. Today, we are making good on our promise to hold price gougers accountable, with more to come,” Bonta stated in a press release.

He urged the public to report any such incidents to local authorities or through the Department of Justice’s channels.

The Eaton Fire, which ignited on Jan. 7, in the Altadena–Pasadena region, rapidly consumed over 14,000 acres, destroyed over 9,400 structures and displaced thousands of residents.

The fire’s swift progression was fueled by strong Santa Ana winds and dry conditions, leading to widespread evacuations and a declared state of emergency.

In response to the crisis, the California Department of Justice has intensified efforts to prevent exploitation of affected residents.

To date, the DOJ has issued 500 warning letters to hotels and landlords suspected of price gouging. Additionally, multiple active criminal investigations are underway to address further allegations.

California law, specifically Penal Code section 396, prohibits increasing prices of essential goods and services by more than 10% following the declaration of a state or local emergency.

This statute covers a range of necessities, including food, emergency supplies, medical supplies, building materials, gasoline and housing.

Exceptions are made if the seller can demonstrate that the price increase is directly attributable to additional costs imposed by suppliers or other legitimate factors.

The recent wildfires have exacerbated an already tight housing market in Los Angeles. With thousands of homes destroyed, the demand for rental properties has surged, leading to concerns about potential exploitation.

Reports have surfaced of significant rent increases, prompting officials to remind landlords of the legal restrictions in place during emergencies.

Gov. Gavin Newsom’s executive order, effective from Jan. 7, 2025, enforces price-gouging laws until at least March 8, 2025. This order aims to protect residents from unscrupulous practices as they seek temporary housing and rebuild their lives.

Bonta’s office has provided guidelines for reporting suspected price gouging. Residents are encouraged to visit oag.ca.gov/LAfires or call the hotline at (800) 952-5225.

When reporting, individuals should include detailed information such as screenshots of communications, price listings and contact details of the involved parties to assist in investigations.

The state’s proactive stance serves as a warning to those who might consider exploiting vulnerable populations during times of crisis.

“May this announcement serve as a stern warning to those who would seek to further victimize those who have lost everything,” Bonta stated. “DOJ is aggressively and relentlessly pursuing those who are trying to make a quick buck off of someone else’s pain.”

As recovery efforts continue, state and local authorities remain vigilant against fraudulent activities, ensuring that the path to rebuilding is free from exploitation.

The community is urged to remain aware and report any suspicious activities to uphold the integrity and safety of the recovery process.

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