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Justice News

Department of Justice
U.S. Attorney’s Office
Northern District of Georgia

FOR IMMEDIATE RELEASE
Friday, September 13, 2019

Managing partner of Chicago travel agency indicted for carrying out $1.75m fraud on Delta's Skybonus program

ATLANTA - Gennady Podolsky, a dual Ukrainian and American citizen, and managing partner of Vega International Travel Services, Inc., has been arraigned for wire fraud. 

“Podolsky used his knowledge of the travel industry to take advantage of his travel agency clients,” said U.S. Attorney Byung J. “BJay” Pak.  “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.”

“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”, said Chris Hacker, Special Agent in Charge of FBI Atlanta.  “The FBI will do everything in its power to protect companies and to stop anyone who participates in this corrupt behavior.”  

According to U.S. Attorney Pak, the charges, and other information presented in court:  Vega International Travel Services, Inc. (“Vega Travel”) was a small, full-service travel agency located in Chicago, Illinois, that catered to clients of Russian and Eastern European descent who were living abroad. 

Podolsky was Vega Travel’s managing partner and lead travel agent.  Delta Air Lines, based in Atlanta, Georgia, operates a frequent-flyer program for individuals called SkyMiles, and a similar program for businesses called SkyBonus, that allows individuals and businesses to earn points for free travel and other valuable perks.  Enrolled businesses can earn points under the SkyBonus program at the same time the traveling passengers earned points under the SkyMiles program.

A business enrolled in the SkyBonus program accrues points whenever its employees travel on Delta and a SkyBonus account identification number is entered electronically at the time of booking.  For an enrolled business to accrue SkyBonus points under the terms of the program, the traveling passenger must have been an actual employee of that business.  Enrolled businesses could redeem accrued SkyBonus points for flight reward certificates, ticket upgrades, and other valuable benefits.

According to the indictment, beginning in March 2014 until April 2015, Podolsky allegedly devised and executed a scheme to defraud Delta through the fraudulent accrual and redemption of over 42 million SkyBonus points, causing a loss to Delta of over $1.75 million dollars.  As part of the scheme, Podolsky caused a SkyBonus account to be registered in the name of a fertility center owned and operated by a family member of the president of Vega Travel. 

When Vega Travel booked its customers for air travel on Delta, Podolsky caused the SkyBonus account number for the fertility center to be associated with those customers’ tickets, even though those customers were not employees of that company or any similar entity.  By doing so, Podolsky caused SkyBonus points to accrue fraudulently in the fertility center’s account for passengers who were not employees of that company.  Podolsky then caused the SkyBonus points that had fraudulently accrued to be redeemed by requesting, receiving, and utilizing reward certificates for free air travel and other valuable benefits.

Gennady Podolsky, 43, of Kiev, Ukraine, was arraigned before U.S. Magistrate Judge Russell G. Vineyard on twelve counts of wire fraud.  Podolsky was indicted by a federal grand jury on September 11, 2019.

Members of the public are reminded that the indictment only contains charges.  The defendant is presumed innocent of the charges and it will be the government’s burden to prove the defendant’s guilt beyond a reasonable doubt at trial.

This case is being investigated by the Federal Bureau of Investigation.  Assistant U.S. Attorneys John S. Ghose and Bernita Malloy are prosecuting the case.

For further information please contact the U.S. Attorney’s Public Affairs Office at USAGAN.PressEmails@usdoj.gov or (404) 581-6016.  The Internet address for the U.S. Attorney’s Office for the Northern District of Georgia is http://www.justice.gov/usao-ndga.

Topic(s): 
Financial Fraud
Updated September 13, 2019