Go Back  FlyerTalk Forums > Miles&Points > Airlines and Mileage Programs > Delta Air Lines | SkyMiles
Reload this Page >

Man Charged With Stealing 42 million DL SkyMiles

Man Charged With Stealing 42 million DL SkyMiles

Old Sep 13, 19, 1:46 pm
  #1  
Original Poster
 
Join Date: Jul 2003
Location: miami, florida
Posts: 1,183
Man Charged With Stealing 42 million DL SkyMiles

Courtesy of ABC News: Since when are SM worth 4+ cents each??

https://abcnews.go.com/US/wireStory/...ogram-65593713
sydneyracquelle is online now  
Old Sep 13, 19, 1:59 pm
  #2  
 
Join Date: Jun 2015
Location: Now: SAT. Previously: SEA, DAY/CVG
Programs: Delta PM
Posts: 5,628
Was he able to redeem his one-way J ticket to Europe with those 42 million miles before getting caught?
ATOBTTR is offline  
Old Sep 13, 19, 2:01 pm
  #3  
 
Join Date: Oct 2009
Location: New York
Programs: AA Exp / Marriott Titanium / MLife Gold / Hilton Gold / Hyatt Explorist / United Silver
Posts: 875
Originally Posted by sydneyracquelle View Post
Courtesy of ABC News: Since when are SM worth 4+ cents each??
That's what Delta is claiming? Can they buy my SkyMiles from me at 3c?



After actually reading the article, the crime seems to be that he entered SkyBonus account for non-employees... a bit extremely.

Last edited by samwise6222; Sep 13, 19 at 2:09 pm
samwise6222 is offline  
Old Sep 13, 19, 2:02 pm
  #4  
A FlyerTalk Posting Legend
 
Join Date: Sep 2009
Location: Minneapolis: DL DM charter 2.3MM
Programs: A3*Gold, SPG Plat, HyattDiamond, MarriottPP, LHW exAccess, ICI, Raffles Amb, NW PE MM, TWA Gold MM
Posts: 84,945
It was SkyBonus.
MSPeconomist is offline  
Old Sep 13, 19, 3:44 pm
  #5  
 
Join Date: Nov 2013
Location: PHX, SEA
Programs: DL Silver, Avis President's Club, Hertz President's Circle, Global Entry (Former AA Plt/Gold)
Posts: 3,437
Suspect arrested for stealing 42,000,000 Skymiles

A man was indicted by federal prosecutors this week, accused of earning more than 42 million Delta frequent-flyer miles by committing fraud.
Source: https://www.businessinsider.com/delt...odolsky-2019-9

It goes on to say that he created a Skybonus account for a business he was not associated with to earn the miles.

The airline claims the miles are worth $1.75 million, which is beyond ludicrous. The man committed fraud and theft, but we all know the real value is closer to $500k.
Gig103 is online now  
Old Sep 13, 19, 4:01 pm
  #6  
 
Join Date: Dec 2009
Location: IAD
Programs: UA Platinum; Hilton Diamond; Global Entry; TSA Pre✓
Posts: 736
Read about this elsewhere, but had to open FT for the jokes.
FlyingHighlander is offline  
Old Sep 13, 19, 4:14 pm
  #7  
A FlyerTalk Posting Legend
 
Join Date: Sep 2009
Location: Minneapolis: DL DM charter 2.3MM
Programs: A3*Gold, SPG Plat, HyattDiamond, MarriottPP, LHW exAccess, ICI, Raffles Amb, NW PE MM, TWA Gold MM
Posts: 84,945
Originally Posted by Gig103 View Post
A man was indicted by federal prosecutors this week, accused of earning more than 42 million Delta frequent-flyer miles by committing fraud.
Source: https://www.businessinsider.com/delt...odolsky-2019-9

It goes on to say that he created a Skybonus account for a business he was not associated with to earn the miles.

The airline claims the miles are worth $1.75 million, which is beyond ludicrous. The man committed fraud and theft, but we all know the real value is closer to $500k.
It's worse than that. He had a travel agency and some relative owned a fertility clinic. He created the SkyBonus account for the fertility clinic and put their SkyBonus number on all the airline tickets he sold, despite the fact that his travel agency clients were not employees (and most of them probably never heard of the fertility clinic).

I wonder how he was caught. I also wonder why the relative wasn't arrested too.

Maybe the damage number is based on what it would have cost to purchase all the award tickets and other perks that were redeemed from the SkyBonus account, perhaps at last minute walk up fares (as if a fraudulent award ticket had been cancelled at the gate and the passenger had been forced to buy a ticket or be stranded).

BTW, do SkyBonus accounts earn regular SkyMiles (RDMs)? I thought earnings were measured in SkyBonus points based on hub/nonhub and length of flight purchased and flown.

ADDED: The Business Insider article first says SkyMiles (or DL FF miles) then later in the article says that it was forty-two million SkyBonus points.

Are there any standard estimates of the value of a SkyBonus point?

The guy was apparently a very high volume (I won't say good) travel agent, but he wants to call himself a "creative director" (like in the entertainment industry). I wonder whether he was advising his clients to buy DL tickets even if they were more expensive or less convenient.

If you google and try to go to their website, you see a Virtuoso "page not found." It's supposedly a luxury travel agency that's been in business for sixty years, so one wonders when this guy bought them. Locations are East Madison Street and East Wacker Drive in downtown Chicago.
bpe likes this.

Last edited by MSPeconomist; Sep 13, 19 at 5:29 pm
MSPeconomist is offline  
Old Sep 13, 19, 4:17 pm
  #8  
 
Join Date: May 2002
Location: Arizona
Posts: 4,591
This is comical that Delta is claiming this loss. I am sure Delta hired retired law enforcement and levered those people to convince current law enforcement the value of those sky bonus program to make this a criminal when in fact is really is civil case. I guess you still can buy the sheriff just like the old old west. I am sure Skybonus points are about worth as much as sky mile peso. Another disturbing factor that everyone seems to gloss over is miles are not considered taxable benefit or income yet now Delta wants to magically make the miles worth money.
Centurion is offline  
Old Sep 13, 19, 4:23 pm
  #9  
 
Join Date: Jun 2015
Location: Now: SAT. Previously: SEA, DAY/CVG
Programs: Delta PM
Posts: 5,628
Originally Posted by Centurion View Post
This is comical that Delta is claiming this loss. I am sure Delta hired retired law enforcement and levered those people to convince current law enforcement the value of those sky bonus program to make this a criminal when in fact is really is civil case. I guess you still can buy the sheriff just like the old old west. I am sure Skybonus points are about worth as much as sky mile peso. Another disturbing factor that everyone seems to gloss over is miles are not considered taxable benefit or income yet now Delta wants to magically make the miles worth money.
Actually incorrect. The IRS has determined that miles earned through flying are not taxable, but my understanding is if you receive more than $600 worth of miles through other means (such as a sweepstakes), then it is taxable and will be reported via a 1099. How "$600 worth of miles" is determined, I am not sure.
Some more reading: https://www.thetaxadviser.com/issues...am-points.html
ATOBTTR is offline  
Old Sep 13, 19, 4:35 pm
  #10  
 
Join Date: May 2002
Location: Arizona
Posts: 4,591
I am not incorrect. <<The IRS has provided little guidance, and while the Tax Court has considered the issue, its 2014 Shankar decision1 leaves more questions than answers about the tax treatment of rewards programs>> furthermore I am trying to lift the veil of what probably really happened here. Delta hired retired law enforcement who handed a case to current law enforcement. And the majority of Flyertalk members would agree the dollar amount is comical since almost everyone on flyertalk calls Delta miles Sky Pesos

Last edited by Centurion; Sep 13, 19 at 4:42 pm
Centurion is offline  
Old Sep 13, 19, 4:50 pm
  #11  
 
Join Date: Oct 2011
Programs: DL
Posts: 27
Originally Posted by MSPeconomist View Post
I\BTW, do SkyBonus accounts earn regular SkyMiles (RDMs)? I thought earnings were measured in SkyBonus points based on hub/nonhub and length of flight purchased and flown.
.


Yes. The traveller gets the SM and the company gets the SB. Before they changed the rules I had a SB account for my company and earned both. Unfortunately I do not have 5 employees so no more SB for me; unless our planned merger goes through in which case we will.
jlc1978 is offline  
Old Sep 13, 19, 4:52 pm
  #12  
FlyerTalk Evangelist
 
Join Date: Nov 2009
Location: Back home in the REAL Washington (SEA); still working occasionally in the other Washington (DCA area)
Programs: DL PM 1.3MM; AS MVPG 75K
Posts: 13,311
Originally Posted by MSPeconomist View Post
...Are there any standard estimates of the value of a SkyBonus point?
redemptions for US48/Alaska/Canada RTs are 90K for coach, 175k for C+, and 250K for F (excluding TCONs which are 280K for F/D1); redemptions for Hawaii are 170K for coach, 350K for C+, and 435K for F/D1
jrl767 is online now  
Old Sep 13, 19, 4:59 pm
  #13  
 
Join Date: May 2002
Location: Arizona
Posts: 4,591
A real news organization would dig into how this case was handed off to law enforcement. I assure you Delta hired retired law enforcement for their Delta private business that handed it over to a buddy who is not retired. Thats whats wrong here and not one lazy news organization will dig into the details. This is a civil matter that a big corporation has made criminal because they can buy off law enforcement.
Colin, mecabq, SEA777GUY and 3 others like this.
Centurion is offline  
Old Sep 13, 19, 5:06 pm
  #14  
bpe
 
Join Date: Mar 2011
Location: Japan
Programs: AS, UA
Posts: 818
Originally Posted by Gig103 View Post
A man was indicted by federal prosecutors this week, accused of earning more than 42 million Delta frequent-flyer miles by committing fraud.
Source: https://www.businessinsider.com/delt...odolsky-2019-9

It goes on to say that he created a Skybonus account for a business he was not associated with to earn the miles.

The airline claims the miles are worth $1.75 million, which is beyond ludicrous. The man committed fraud and theft, but we all know the real value is closer to $500k.
Originally Posted by MSPeconomist View Post
Maybe the damage number is based on what it would have cost to purchase all the award tickets and other perks that were redeemed from the SkyBonus account, perhaps at last minute walk up fares (as if a fraudulent award ticket had been cancelled at the gate and the passenger had been forced to buy a ticket or be stranded).
The news articles all say $1.75 million worth of miles, but according to one of them, the actual indictment says "causing a loss to Delta of over $1.75 million dollars". I feel like this number is plausible and that Delta's lawyers would be smart enough to not put an exact dollar value on miles.
jerseytom likes this.
bpe is offline  
Old Sep 13, 19, 5:09 pm
  #15  
A FlyerTalk Posting Legend
 
Join Date: Sep 2009
Location: Minneapolis: DL DM charter 2.3MM
Programs: A3*Gold, SPG Plat, HyattDiamond, MarriottPP, LHW exAccess, ICI, Raffles Amb, NW PE MM, TWA Gold MM
Posts: 84,945
It looks like their website is down, but you can still see their Facebook stuff, with pretty pictures on posts going as far back as 2015. They seem to emphasize the expected mix of luxury curated trips, including safaris, polar bears, spas, etc. with a heavy emphasis on their Virtuoso connection (which seems to be dead). More recently Eastern Europe seems to be stressed. The few reviews are all good, but no one mentions plane tickets.

It's curious that there's a post from about August 2017 announcing a new piece of software to enable other travel agents to provide *plane tickets* through Vega while the outside travel agent makes the hotel reservation and other arrangements. Vega seems to be offering a commission to participating outside travel agents.

For those who use SkyBonus, is it obvious that a plane ticket, itinerary, or boarding pass has a SkyBonus number attached? I assume that SkyBonus award tickets would look like award tickets, so that if someone were a DL FFer, they might notice if this travel agent is selling SkyBonus award tickets as if they were normal revenue tickets, or do these things book into regular inventory classes? I'm speculating, but it doesn't seem to make sense that this travel agent could have given $1,750,000 worth of DL plane tickets to friends and family. That might be about 150 TATL/TPAC RTs in D1 at over $10,000 each on average.
MSPeconomist is offline  

Thread Tools
Search this Thread