American Man Fraudulently Obtains $1.75 Million Worth Of Delta SkyBonus Points

A 52-year-old travel agent has been indicted by the FBI on charges of wire fraud related to Delta’s SkyBonus scheme. He is thought to have defrauded the airline out of $1.75 million between March 2014 and April 2015.

A Delta Air Lines Boeing 767
Delta is said to have lost $1.75 million as a result of the fraud case. Photo: Tomás Del Coro via Flickr

A 52-year-old dual American and Ukrainian citizen has been charged on 12 counts of wire fraud by the FBI. According to reports by the New York Times, the charges against Gennady Podolsky relate to a 13-month scheme in which he conspired to fraudulently acquire points through Delta Air Lines’ SkyBonus points scheme.

The details of the case against Mr. Podolsky reveal how he used his position as a travel agent at Vega International Travel Services to amass $1.75 million worth of SkyBonus points.

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According to the Washington Post, Mr. Podolsky created a false SkyBonus account. He registered the account for a fertility company owned by a family member of Vega International Travel Services’ president.

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Using his position at Vega International Travel Services, he then fraudulently linked customer flights to the SkyBonus account, passing them off as employees. In this way he fraudulently acquired more than 42 million SkyBonus points, redeeming them for free air travel and a variety of valuable benefits.

Mr. Podolsky has been arraigned before a magistrate in the Northern District of Georgia, where Delta Air Lines is based.

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Making the most of frequent flyer points

Gennady Podolsky’s lawyer, Seth D. Kirschenbaum, responded to the allegations, saying, “Mr. Podolsky’s conduct relating to that program was not fraudulent”.

A Delta Air Lines Boeing 757
Mr. Podolsky’s legal team insist his scheme was not fraudulent. Photo: Bill Abbott via Flickr

In fact, his legal team claim quite the opposite. They say that rather than losing millions of dollars as a result of Mr. Podolsky’s actions, Delta Air Lines “netted millions of dollars of profits” from the customers he brought to the airline.

Whether or not Mr. Podolsky actually benefitted the airline in this way remains to be seen, but various tricks and tactics are often used to get the most out of frequent flyer points.

Understanding the systems airlines use to determine frequent flyer points has become somewhat of an art.

Points differ depending on the type of seat booked, the length of the journey taken and the frequency of flights taken by individual passengers. There are also various time-dependent promotions available for spending points.

All of this means that there are a number of ways passengers could ‘cheat’ the system.

How Delta Air Lines lost out

Using tricks to get the most out of frequent flyer points is usually not seen as much of an issue by airlines.

A Delta Air Lines Boeing 717-2BD
The FBI led the investigation into Mr. Podolsky. Photo: Colin Brown Photography via Flickr

When individuals take advantage of these deals, the amount of money lost is negligible. In fact, it can be a good driver of customer engagement and brand loyalty.

In Gennady Podolsky’s example, the FBI doesn’t see his actions as a simple case of someone taking advantage of loopholes.

In a press release by the Northern District of Georgia U.S. Attorney’s Office, Special Agent Chris Hacker said,

“The fraudulent accumulation of frequent flyer miles in the travel industry may seem like a victimless crime, however, large corporations stand to lose significant profits”.

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Ron

Gimme a break. Delta is valuing their crappy miles at 4.1cpp? Ha!

Delta, I’ll make you a deal. I’ll sell you 2M points at a bargain rate of 3cpp. Crickets…Yeah, I thought so.

Richard

I’m sure Delta didn’t have as much of a loss as the fbi is claiming they did

Dennis

“The fraudulent accumulation of frequent flyer miles in the travel industry may seem like a victimless crime, however, large corporations stand to lose significant profits” – oh.. boo hoo

Joe

DL STOP CRYING YOU DIDN’T LOST JACK

Freq.flyer

Cry me a river, filthy dL. Maybe you’ll use the money to clean those filthy scummy , outhouse smelling ancient aircraft you fly. Has to be the filthiest in the industry and their spending money on fighting a self over valued miles case? And how about an investigation on your on time record that is as bogus as this frivolous litigation. It’s just not believable , they pushback and sit there and arrive one minute before the 15 min. Rule. United’s program is the best in the industry anyway. You can have your miles.

Caroline

My guess is that this Travel Agent must have “sold” some Skybonus/points or miles to some acquaintances or contacts for real money or cryptomoney because the amount s $1.75 million worth of SkyBonus points is just too huge for him to benefit alone .
Lets wait for the investigation to be completed.