NEW YORK - Kelly and Deirdre Britt were thrilled to find an Internet listing for a three-star Manhattan hotel &#8220suite” at a bargain $250-a-night for their family's trip to the Big Apple - until they opened the door to the room.

The two rooms were filthy and musty, with paint peeling off the walls. The towels in the bathroom were matted with hair. The fold-out couch was wedged too close to the kitchen sink to open.

&#8220We should have seen a red flag when the taxi driver couldn't find the place,” Deirdre Britt said.

The suite was not in a highly rated hotel as advertised, but on the fifth floor of a pre-World War II apartment building in midtown Manhattan. There was no flat-screen TV, no concierge, no maid service, no bargain.

The Britts were snookered in a widening scam where landlords pawn off apartments as hotel rooms to cash in on New York City's tourism boom. They are posting rooms on popular Internet travel sites, where the legitimacy of the advertisements are not always checked, officials say.

&#8220Tourists are being lied to and tenants are being harassed,” said John Raskin, a community organizer for Housing Conservation Coordinators, a nonprofit affordable housing group in New York.

The problem has become so egregious that the city's building department launched a special unit to investigate complaints about illegal hotels. Assemblyman Richard Gottfried, who formed a task force on illegal hotels last year, said the scams are &#8220growing like an epidemic.”

Over the last nine months the unit has conducted 35 inspections sparked by complaints, said Robert Iulo, the city's assistant buildings commissioner. Most of those inspections resulted in violations being filed against the building's owner, with a fine of up to $2,500 fine per offense.

The Britts started a Web site to warn other tourists - http://www.woogone.com - and filed a consumer fraud complaint with the New York attorney general and the City's Building Department, leading to charges against the apartment manager.

Britt visited Expedia.com, an Internet travel site, to find a hotel in New York. He clicked on the &#8220hotels” category and one of the featured hotels was a Lincoln Centre apartment listed by another Web site, WooGo.com.

Howard Silverman, manager of The 63rd Street West Realty, which owns the property, was not available to comment. Messages left for a spokeswoman for Expedia.com, were not returned. A message for Anna Adams, manager of customer affairs for WooGo.com, was left with her assistant.

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