September 18, 2019

Chicago Man Fraudulently Accrued 42 Million Delta SkyBonus Points, U.S. Says

Chicago Man Fraudulently Accrued 42 Million Delta SkyBonus Points, U.S. Says


Where would you go if you had more than 40 million points with an airline? Hawaii 96 times? Seoul 40 times? Federal District Court in Atlanta?

Gennady Podolsky, a travel agent based in Chicago, was charged on Wednesday with 12 counts of wire fraud in connection with what prosecutors describe as a 13-month scheme in which he accrued 42 million Delta SkyBonus points, valued at more than $1.75 million.

SkyBonus points are earned through a corporate loyalty program through which companies can accrue points that can be redeemed for free flights and rewards from the airline. According to the indictment, filed on Wednesday in United States District Court for the Northern District of Georgia, Mr. Podolsky created a SkyBonus account for a corporation called RGI International with which he is not affiliated.

Mr. Podolsky, 43, would link flights that he booked for clients of Vega International Travel Services, where he worked as a travel agent, to RGI International’s SkyBonus account, allowing him to “fraudulently accrue” points, the indictment said.

“Mr. Podolsky’s conduct relating to that program was not fraudulent,” his lawyer, Seth D. Kirschenbaum, said in a statement, adding that “the suggestion that Mr. Podolsky’s conduct somehow disadvantaged his clients is equally unfounded.”

He also objected to the government’s portrayal of Delta as “a victim,” claiming that the airline “actually netted millions of dollars of profits” through its relationship with Mr. Podolsky.

Delta said it was waiting for the F.B.I. to complete its investigation.

“We’re happy to see any kind of fraud indicted and continue to work with the F.B.I. and the U.S. Attorney’s Office to make sure this case is prosecuted to its fullest extent,” the airline said in an emailed statement on Friday.

Mr. Podolsky is accused of running the scheme from March 2014 to April 2015, during which time he was a managing partner and the lead travel agent at Vega International, according a news release from the office of United States Attorney Byung J. Pak.

Airlines are often being swindled through loyalty programs that provide points to frequent fliers, according to Scott Mayerowitz, executive news director at The Points Guy, which provides tips on travel.

“There are lots of ways people have abused the points system,” he said, mentioning as an example the “huge underground market of people who buy and sell the points.”

On websites like FlyerTalk.com there are forums in which travelers give one another tips on how to maximize their earning capability and how to use points most effectively.

To give a sense of how many points 42 million is, a big credit card sign-up bonus would be 100,000, according to Mr. Mayerowitz. A 50,000-point bonus is more common, he said, “and people are happy with that.”

Mr. Mayerowitz explained that while point fraud is common, the “sheer size” of the alleged scheme made Mr. Podolsky’s case “unique.”

“If I had 42 million points, I would sip champagne and have wonderful meals in the air with my family,” he said. “But I would do it without committing fraud.”



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