Asheville Airbnb owner guilty of $3.5M in bank fraud; judge questions him about plea

ASHEVILLE - A well-known short-term vacation rental owner has pleaded guilty to more than $3.5 million in federal bank fraud during a hearing in which the judge raised issues with how he answered some questions.

Shawn Thomas Johnson, a once-celebrated local handyman, entrepreneur and owner of short-term rentals, often called "Airbnbs" after the online platform, made the plea March 25 in U.S. District Court in Asheville.

U.S. Magistrate Judge W. Carleton Metcalf set a $25,000 unsecured bond, allowing Johnson, 36, to remain free while awaiting sentencing, which could be in six months, according to current case trends.

Metcalf ordered Johnson while awaiting sentencing to avoid contact with victims and witnesses and to not to sell or buy real estate, directly or through others.

Previous reporting: Asheville Airbnb real estate broker's license revoked; kept property owners' money

Prior to his plea Johnson waived the right for his case to go before a grand jury. While answering questions about whether he agreed with the facts as laid out by Assistant U.S. Attorney Don Gast — that Johnson lied to banks about how much he made, fabricated pay stubs and said loans would be used for primary residences when instead they were used as short-term rentals — Johnson said he did not have an issue with the facts "at this time."

Metcalf responded, "I'm not sure what that means" and asked again if Johnson agreed the facts as stated, to which Johnson said yes.

When Metcalf asked Johnson if he agreed the bank fraud charge could be proved "beyond a reasonable doubt," Johnson said yes, making a motion that drew the judge's attention.

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"I hear the words you are saying but your body language is sending a different message," Metcalf said.

Johnson then told the judge he did agree.

It is not clear what kind of punishment Johnson will face, though the maximum penalty would be 30 years in prison and a $1 million fine.

Hyman "Chip" Young III watched the proceeding and afterward approached Gast, the U.S. attorney. Speaking to the Citizen Times, Young said Johnson in 2020 had tried to buy 4 acres of land from his father, Hyman Young Jr., through an owner-financed mortgage deal. But his father, who is now 79, refused, calling it a scam.

"He told people he was going to make my father's life hell until he got his property," Young said.

Young said Johnson falsely claimed his father pointed a gun at him, resulting in Young's arrest. Court records show a 2020 charge of assault by 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.

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Records also show Johnson attempted to take a restraining order out against Hyman Young Jr. the same year, though it was denied for lack of grounds.

Hyman Young Jr. is now suing Johnson in Buncombe County Superior Court, saying Johnson, who runs short-term rentals on property next to the four 4 acres has trespassed, taken materials from their land, cut trees and built structures over the property line.

Johnson has denied the allegations, according to court records.

Chip Young said he reached out to the federal prosecutor because he did not want Johnson "to get a slap on the wrist."

Prior to Johnson's plea, his former business partner Whit Riley, who said Johnson scammed him out of property they bought together by forging his signature has also called for a stiff sentence.

Neither of the allegations were related to Johnson's bank fraud.

Specific aspects of the fraud included:

• Saying homes would be used as primary residences when in fact they were intended to be used as short-term rentals.

• Lying about employment and falsifying pay stubs.

• Omitting information about lawsuits.

• Presenting fictitious rental agreements.

• Failing to disclose the existence of other loans or financial obligations.

In three specific examples, Johnson admitted he made up a job and fabricated pay stubs to get a $225,000 loan from State Employees Credit Union for a home east of Asheville on Springwood Drive; worked with an unnamed Navy veteran "co-conspirator" to get a $265,000 Veterans Administration-backed loan for a Leicester home on Daniel Brook Drive for a short-term rental, though VA loans are only for primary residences; and worked with another unnamed co-conspirator to get a $247,435 U.S. Housing and Urban Development insured loan to buy an East Asheville home on Pine Cone Drive, saying it was to be a primary residence when it in fact became a short-term rental.

In some cases the operations of the short-term rentals violated local rules, something that would have caused banks not to make the loans, Gast said. Asheville has some of the most stringent regulations in the area, banning new short-term rentals in most places. As an exception, owners can rent for short periods a room or two in a home that is shared by a long-term resident.

Johnson has faced federal prosecution before when he was found guilty in 2010 in Asheville of counterfeiting.

Later, he became known 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 was granted a limited state real estate license. A year later he was picked as one of the featured speakers at a local economy forum, hosted by Western Carolina University and the Citizen Times.

But in February 2019, state real estate regulators stripped Johnson's license, saying he kept "at least" tens of thousands of dollars owed to short-term rental owners whose properties he managed. An Airbnb spokesman said the company removed his account early that year.

In 2020 police charged Johnson with repeatedly violating COVID-19 restrictions by operating a short-term rental.

Joel Burgess has lived in WNC for more than 20 years, covering politics, government and other news. He's written award-winning stories on topics ranging from gerrymandering to police use of force. Got a tip? Contact Burgess at jburgess@citizentimes.com, 828-713-1095 or on Twitter @AVLreporter. Please help support this type of journalism with a subscription to the Citizen Times.

This article originally appeared on Asheville Citizen Times: Asheville Airbnb owner guilty of $3.5M fraud; judge raises plea issues