Man Pleads Guilty To Wire Fraud Of $160,000 Against American Airlines

A Missouri resident has pleaded guilty to scamming American Airlines out of $160,000. The traveler abused a glitch in the carrier’s system while also tricking his associates for money.

American Airlines
American Airlines lost thousands of dollars thanks to a man that scammed the company for nearly two years. Photo: Getty Images

A regular occurrence

Australian news outfit reports that William Joseph Schwarze, from St Louis, Missouri, took advantage of a loophole in American Airlines’ online booking process. He would purchase gift cards from the Texan airline and sell them on to others. Subsequently, he would request a refund from the company.

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The 27-year old claimed that he was an associate of a travel agency. He also stated that he planned to open up his own travel firm. A court in the United States heard that he would use his alleged expertise in the industry to optimize carrier and hotel customer experience programs. These factors would potentially help him secure travel deals for people.

Grounded American Airlines aircraft
American Airlines is going through several tough moments across the company this year. Photo: Getty Images

However, the truth of the matter is that over the span of nearly two years, Schwarze was scamming both the company and the public. Between January 2016 and October 2018, he purchased hundreds of online gift cards from American Airlines. In 2018 alone, he bought 690 cards that were worth between $50 to $150. These were then sold on to people who would use them to book tickets.

American Airlines
Whether it’s to do with gift cards or identification, airlines such as American are continually facing fraud challenges. Photo: Getty Images

A costly process

After selling a card, he would ask AA for a refund and get the money charged back to his credit card. However, the funds should have actually been refunded to the gift card.

Along with the $160,000 stolen from the operator with this procedure, he accepted $20,000 from associates and those close to him. These third parties didn’t know that Schwarze was getting his money back with the process.

Altogether, the scammer had pleaded guilty to one count of wire fraud. He will be sentenced later this year but will be ordered to repay approximately $180,000. Additionally, in a bid to prevent something like this from happening again, American has changed its system.

American Airlines
The airline has now revised its process due to these events. Photo: Getty Images

No stranger to such incidents

Corporations are regularly facing fraud schemes such as this. Airlines especially fall victim to these scams amid complex booking processes. Only a few days ago, a former Mesa Airlines employee admitted to creating fake airline IDs to get free flight tickets. Nonetheless, the sentences for such crimes are usually strict.

Simple Flying reached out to American Airlines for comment on these reports but did not hear back before publication. We will update the article with any further announcements.

What are your thoughts about this individual scamming American Airlines? How do you feel about the outcome of the verdict? Let us know what you think of the situation in the comment section.