Attorney General Bonta Secures Sentence Against Southern California Real Estate Agent in Eaton Fire Price Gouging Case

LOS ANGELES - California Attorney General Rob Bonta today announced the sentencing of real estate agent Mike Kobeissi for false advertising arising out of an attempt to price gouge a couple who lost their home in the Los Angeles Eaton Fire. Kobeissi's sentence includes 12 months of probation, 100 hours of community service, and a mandatory professional ethics course through the National Association of Realtors. Additionally, he must pay $20,000 to a disaster relief fund and submit a letter of apology to the victims.

"As I have said repeatedly, price gouging during a state of emergency is illegal," said Attorney General Bonta. "May this announcement serve as a stern warning to those who would seek to further victimize those who have lost everything. My office is aggressively and relentlessly pursuing those who are trying to make a quick buck off someone else's pain."

The California Department of Justice (DOJ) filed charges against Kobeissi following an investigation spurred by a consumer complaint sent to DOJ by the evacuated couple, which detailed their attempt to rent a home after the Governor's Emergency Order took effect. The Emergency Order explicitly prohibited the price gouging of wildfire victims. The investigation revealed that the couple applied to rent a home listed by real estate agent Kobeissi, but after the application was received, they were informed that the price increased by 38%. They decided not to rent the house due to the price increase.

California law - specifically, Penal Code section 396 - generally prohibits charging a price that exceeds, by more than 10%, the price a seller charged for an item before a state or local declaration of emergency. For items that a seller only began selling after an emergency declaration, the law generally prohibits charging a price that exceeds the seller's cost of the item by more than 50%. This law applies to those who sell food, emergency supplies, medical supplies, building materials, and gasoline. The law also applies to repair or reconstruction services, emergency cleanup services, transportation, freight and storage services, hotel accommodations, and long- and short-term rental housing. Exceptions to this prohibition exist if, for example, the price of labor, goods, or materials has increased for the business.

This case was prosecuted by DOJ's Special Prosecutions Section (SPS). SPS combats complex, multi-jurisdictional crimes by deploying specialized vertical teams of prosecutors, auditors, and paralegals. This unit focuses heavily on major financial crimes, including securities, mortgage, tax, and revenue fraud, alongside counterfeiting and underground economy offenses.