The managing partner of a small, Chicago-based travel agency is accused of scamming Delta out of nearly $2 million worth of frequent flyer miles.
Gennady Podolsky, a 43-year-old dual Ukrainian and American citizen, was arraigned on wire-fraud charges Friday, the U.S. Attorney’s Office for the Northern District of Georgia said in a statement.
He was indicted by a federal grand jury Wednesday on 12 counts of wire fraud.
Prosecutors say Podolsky used travel agency customers’ trips to manipulate the airline’s corporate reward program.
“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,” Chris Hacker, FBI special agent in charge of the Atlanta office, said in a statement.
Under the airline’s SkyBonus program, businesses can enroll and earn points every time employees travel.
Podolsky is accused of scheming to have the travel and miles of Vega Travel customers apply to the account of a fertility center run by a relative under the guise that all of the agency customers were business flyers under Delta’s SkyBonus program, prosecutors said.
He then allegedly used those points to get such perks as free air travel.
“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,” Hacker said.
Prosecutors said the scheme ran from at least March 2014 until April 2015. Podolsky is accused of defrauding Delta Air Lines out of more than 42 million SkyBonus points.
Nick Lotito, one of Podolsky’s attorneys, said in a statement to NBC News that his client is a “well-respected and highly-skilled travel advisor who has served a loyal clientele for many years” and that “Mr. Podolsky’s conduct was not fraudulent.”
“Indeed, while the Government says Delta is a victim, the evidence at trial will show Delta actually netted millions of dollars of profits from its relationship with Mr. Podolsky,” said Lotito.
Podolsky was Vega Travel’s managing partner and lead travel agent. Many of the company’s clients were living abroad and were of Russian or European descent, prosecutors said.
Delta is headquartered in Atlanta. An email contact for Vega Travel could not immediately be found Friday night. Its website appeared to be down.
Podolsky surrendered to FBI agents outside the federal courthouse in Atlanta on Thursday and was arrested, and he posted a $50,000 bond and was released, according to court records.
In a statement to NBC News, Delta said the airline is “happy to see any kind of fraud indicted” and that it will continue to work with the FBI and the U.S. Attorney’s Office “to make sure this case is prosecuted to its fullest extent.”