You may recall a movie titled “Catch Me If You Can” where Frank Abagnale Jr., forged checks and impersonated airline pilots to travel around the world for free.
More recently, I read about a man that had traveled around the world for free because he had redeemed 42 million Delta skymiles and even more impressive was the fact that he had accumulated these miles having never left his work desk. There’s just one problem… authorities allege that it his actions were fraudulent and illegal.
There are many different ways to earn miles…shopping portals, credit cards, and even actually flying “butt-in seat” on a specific carrier (or flying on a partner airlines and crediting the miles to another carrier). And we all know that you should attach your frequent flyer number to these methods to ensure that the miles post to your account. For example, if you have a Delta Skymiles account, not only can you earn and redeem those miles to fly on Delta but you can redeem those miles to fly on partners like Air France, KLM, Korean Air, Virgin Atlantic, and others.
But many people don’t realize that there are other ways to earn miles. For example, if you own a business, you can earn miles (as a company) that is separate from your employees. Typically, a specific airline will offer this as a corporate incentive that encourages organizations to book with them when you (or anyone from the company) travels.
In other words, Coca-Cola is based in Atlanta Georgia so it’s likely that Delta offers this incentive to Coke when their employees fly on Delta. Amazon is based in Seattle so Alaska Airlines likely offers this incentive to Amazon as a company. Facebook, is based in San Francisco so United Airlines likely offers this incentive to Facebook. Simple, right?
In the equation, the company earns miles for sticking with an airline and the employees of the company earn their own personal miles. For the companies, it’s an easy way to earn free flights, upgrades, and other perks twice as fast. There’s only one hurdle: the program is designed for actual business with actual employees and not for everyone that you know that may take a flight.
Enter Gennady Podolski.
Mr. Podolski is a travel agent. He sets up a Delta SkyBonus account. Again, setting up this account will allow a business to earn miles (as a company) while their employees earn their own separate miles. However. there is one major problem…Mr. Podolski did not make an account for his business. He made an account for a fertility clinic that he was not associated with. Then in his role as a travel advisor, he would enter the SkyBonus frequent flyer number when a client of his booked travel through his company.
It’s unclear whether his clients cared (or even took notice) that a SkyBonus frequent flyer number was attached to their reservation because they still received their miles as usual.
However, Delta did notice and wondered how a small fertility clinic had thousands of employees redeeming millions of miles…42 million miles to be exact!
Well, Delta said the points were worth $1.75 million and prosecutors have filed federal fraud charges against Mr. Podolski given that he doesn’t work for the fertility clinic, and it’s likely the clinic had no idea he had set up a SkyBonus account for them.
Personally, I think it’s fair to say that Delta’s cash valuation is a bit bloated as they value their points at 4 cent per miles. I think their points are closer to 1 cent per mile.
It’s unknown how many trips Mr. Podolski was able to extract from the 42 million miles but Delta claims he used them all. So I think it’s also fair to say that he’s traveled quite a bit (unless he booked ATL-JNB one-way in Delta One where they are charging ~500k).
If there are lessons to be learned here:
- If you own a legitimate business (large or small), set up an account so you can double those points and miles. Here are the links to the big US3 programs: American Airlines, Delta Airlines, United Airlines
- Don’t try to scam the airlines. They’re tracking you and recognize if you have “thousands” of employees.
What do you make of this situation? Where would you have gone if you had 42 million Skymiles?