A travel agent “extraordinaire” has been indicted for allegedly committing fraud against Delta Air Lines. Prosecutors say the man scammed 42,000,000 miles from Delta. I see the case differently…
Prosecutors have alleged Gennady Podolsky gamed Delta’s SkyBonus program to reap millions of miles he was not entitled to.
SkyBonus is a business travel rewards program for small to mid-size business. It’s essentially an award stacking program, as tickets earn SkyMiles but when a SkyBonus number is inserted, the company also earns SkyBonus points, a parallel points currency that can be redeemed for upgrades and flights.
The program terms and conditions limit participation to company employees only and exclude travel agencies.
The following companies are not eligible to participate: corporations with a Preferred Carrier Agreement with Delta Air Lines, Air France, KLM Royal Dutch Airlines, Alitalia, or Aeromexico, travel agencies, wholesalers, consolidators and other sellers of travel are not eligible to participate in the Program.
Using a fertility clinic as a cover, Podolsky listed his clients as employees, thereby raking in over 42 million SkyBonus points between 2014 and 2015.
Fraud Or Not?
Federal prosecutors accused Podolsky of fraud:
Podolsky used his knowledge of the travel industry to take advantage of his travel agency clients. Through his access, he allegedly took advantage of Delta Airlines corporate frequent flyer program, illegally reaping millions of SkyBonus points worth more than $1.75 million dollars.
Chris Hacker, Special Agent in Charge of FBI Atlanta, added:
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. The FBI will do everything in its power to protect companies and to stop anyone who participates in this corrupt behavior.
But Podolsky’s attorneys are insisting he did nothing wrong:
Gennady Podolsky is a well-respected and highly-skilled travel adviser who has served a loyal clientele for many years. Mr. Podolsky’s conduct was not fraudulent. Indeed, while the government says Delta is a victim, the evidence at trial will show Delta actually netted millions of dollars of profits from its relationship with Mr. Podolsky. The suggestion that Mr. Podolsky’s conduct somehow disadvantaged his clients is equally unfounded.
Delta is certainly happy about the federal prosecutors doing its bidding, telling the Washington Post:
We’re happy to see any kind of fraud indicted and continue to work with the FBI and the District Attorney’s office to make sure this case is prosecuted to its fullest extent.
I’m sorry, but I fail to see the crime committed. Certainly Podolsky abused program rules. Delta had every right to shut down his account and confiscate his miles, even though he gave them millions in business. But since when is the FBI fighting to protect frequent flyer miles? The biggest joke is that prosecutors are valuing the SkyBonus points at 4.2 cents each…
This will be a fascinating case to watch.