You really don't need a friend to do this. You can open your own sole proprietorship and sign up with a credit card clearing house. You can do MC and Visa transactions for less than 2%. The credit card charges go directly to your business bank account; you can write yourself a check from your business account, deposit it into your personal account, then write a personal check to the credit card company.

So there's a whole lot of money going through your business account, but you're not claiming any revenue on your tax return. So what? Banks don't report deposit and checking activity to the IRS, so you don't have to report all deposts as revenue. If the IRS audits you and sees a bunch of money going in and out, it's pretty easy to explain. There's no money laundering, because you're just recirculating the money every few days and the money's easy to follow. Fraud? Sure, as far as the airline is concerned - but the IRS won't care that you're defrauding the airline out of frequent flyer miles; they're only concerned with defrauding the government.

Will the airline know? Probably not - there are more people than you would realize that charge hundreds of thousands of dollars a month on their mileage-earning credit cards. Look at OzFlyer - over 35 million miles on his Diners.

Is it worth it? If you think you miles are worth a lot more than $0.02/mile and you can use a lot of miles, then it just may be.