Why a Man Was Charged with Stealing 42 Million Delta Points – Valued at $1.75 Million

While many might say the real crime is that Delta miles are being valued at over 4 cents per mile, there was actually an indictment last week of a man that prosecutors say stole 42 million miles from Delta. How did he do that?

Stealing 42 Million Delta Points – How Did He Do It?

What is Delta Skybonus Points and How to Earn Them

Link: Skybonus Rewards

Delta, like other airlines, actually has a way for businesses to double dip on travel. While the flyer is the one that actually earns the miles flown (or the value of the ticket flown these days), businesses can also get something for their travel dollars through business programs.

The Delta Skybonus program used to be really good for even very small businesses to earn more on business travel (until they made new requirements like having a minimum of 5 travelers). I had earned a good little chunk back in the day that I was able to use for some free tickets – which was a nice way to save miles for other trips and still have something for when regular tickets were really expensive.

The Theft of 42,000,000 Skybonus Points

According to David Slotnick over at Business Insider, Gennady Podolsky (a managing partner at a travel agency) registered a company that he had no personal connection with for Delta Skybonus. From there, he would assign that Skybonus number to the reservations that his travel agency booked. For all the travelers, they never would have noticed since they could still put their own Skymiles number on the reservation and it would not interfere with the Skybonus number and account.

That meant he was racking up an insane amount of points – 42 million in all. The rules stated that you were only allowed to put the Skybonus number on reservations of people traveling for that business and on business. So, he violated the terms of that but had apparently crossed that line into fraud (likely due to the massive value of the points).

What Can You Get with Skybonus Points?

As far as the redemptions, it costs 700,000 Skybonus points for a roundtrip business class award between the US and Australia. If you want enhanced availability, that jumps to 1.1 million points. This means that the accused could have redeemed for 60 roundtrip business class tickets to Australia! When Delta can sell those for $10,000 a pop, you can see some serious money there!

Delta Skybonus Points Are Worth How Much???

This is an important distinction – Skybonus accrues points while flying with Delta Skymiles earns miles. Normally, no one in their right mind would think that Delta miles are worth 4 cents each – and they would be right! Part of the head scratcher is how Delta arrived at even that valuation for Skybonus points. It costs a lot more to redeem those points for normal awards but my guess is Delta is tying it to the cost of earning the points in the first place (since there is a separate earning chart for Skybonus).

Another interesting part about the article is that it says he had redeemed those points. At least he knew enough about devaluations to spend them rather than save them! 🙂 But, I am a bit curious to know if he actually booked tickets with them and sold those tickets to clients – that may add to the fraud charge as well.

Takeaways? Delta has a high valuation of their own award currencies and they take it very seriously when you abuse their programs to this level.

Featured image courtesy of Chris Parypa Photography | Shutterstock