OpenTable employee Steven Addison was charged by federal prosecutors with making fake reservations on a rival’s website at a time when he knew the restaurants would be busy and thus suffer from losses.
ABC News, citing criminal information filed in the U.S. District Court for the Northern District of Illinois, reported U.S. Attorneys contend Addison made more than 300 fraudulent reservations using Reserve, a rival to OpenTable, to show Reserve has an inferior reservation system. Addison reportedly made “multiple fake reservations on potentially busy days when he knew restaurants would suffer more losses,” according to the charging documents, reported ABC News. “For example, Addison made 22 fake reservations on New Year’s Eve and 24 fake reservations on Valentine’s Day.” Addison was charged with one count of wire fraud. Addison said he acted on his own and didn’t profit personally from the scheme. In addition to making reservations with fake names, Addison is alleged to have created email addresses and fake phone numbers. The scam resulted in 1,200 reservations.
“We learned that a rogue OpenTable employee had made a few hundred false reservations at 45 Chicago restaurants using a competitor’s platform,” said OpenTable chief executive Christa Quarles in a blog post earlier in the year reported ABC News. “We quickly investigated, confirmed this employee had acted alone and terminated the employee within 48 hours. The former employee was not in a sales function and had no managerial duties.” She went on to apologize to the restaurant community and to Reserve. OpenTable is offering reimbursements to the restaurants for the no-shows.
Peter de Castro, the owner of Tavern at the Park, one of the restaurants impacted by the scam, told ABC News that he doesn’t think Addison acted on his own and that he feels bad for him. “I never expected federal charges,” he added. “I feel sorry for him.” De Castro told ABC News, however, that he thinks he was a target of Addison because he switched to Reserve after being frustrated with what he said were high fees and sales tactics that were aggressive at OpenTable. He said he pays more than $50,000 a year to OpenTable but that he pays $240 a month — or around $3,100 each year — with Reserve.