A travel agent has been charged with wire fraud for an alleged scheme through a Delta Air Lines loyalty points program.
The U.S. Attorney’s office alleges Gennady Podolsky, a travel agent who was based in Chicago and catered to clients of Russian and Eastern European descent, fraudulently used Delta’s SkyBonus loyalty program for businesses.
“The fraudulent accumulation of frequent flyer miles in the travel industry may seem like a victimless crime, however, large corporations stand to lose significant profit,” said FBI Atlanta special agent in charge Chris Hacker in a written statement.
Podolsky’s attorney Seth Kirschenbaum issued a statement calling Podolsky “a well-respected and highly skilled travel adviser who has served a loyal clientele for many years,” and said Podolsky’s conduct related to the SkyBonus program was not fraudulent.
The SkyBonus program allows small- to mid-sized businesses to enroll to earn points for travel booked for employees, who can also earn personal miles through the SkyMiles program.
Podolsky was the lead travel agent at Vega International Travel Services in Chicago.
Byung J. “BJay” Pak, U.S. attorney for the Northern District of Georgia, alleges a SkyBonus account was registered in the name of a fertility center owned by a family member of Vega’s president.
The SkyBonus account number for the fertility center was used when Vega booked tickets for its customers on Delta, even though the customers were not employees of that company, according to the U.S. attorney’s office. Under terms of the program, traveling passengers must be employees of the company for the enrolled business to earn SkyBonus points.
“Podolsky used his knowledge of the travel industry to take advantage of his travel agency clients,” Pak said in a written statement.
More than 42 million SkyBonus points were fraudulently accrued and redeemed for free air travel and other benefits from March 2014 until April 2015, according to the indictment. The U.S. attorney’s office alleges that Podolsky took advantage of the program, “illegally reaping millions of SkyBonus points worth more than $1.75 million.”
The SkyBonus account Podolsky was using drew the attention of a Delta risk management investigator for an audit in 2015.
The wire fraud charges are because of interstate wire communications with Delta’s computer servers for the redemption of flight reward certificates.
Kirschenbaum’s statement said “the evidence at trial will show Delta actually netted millions of dollars of profits from its relationship with Mr. Podolsky,” and the suggestion that he disadvantaged his clients is unfounded.
Podolsky, 43, who now lives in Kiev, Ukraine, was arraigned on 12 counts of wire fraud and was indicted by a federal grand jury on Sept. 11.
Delta issued a statement saying: “We’re happy to see any kind of fraud indicted and continue to work with the FBI and the U.S. Attorney’s Office to make sure this case is prosecuted to its fullest extent.”
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