One flyer from the St. Louis area who found a way to travel for free has plead guilty to one count of wire fraud. William Joseph “Billy” Schwarze admitted in court to using a loophole in American Airlines’ computer system to take over $160,000 in free travel.
A flyer from the St. Louis area is facing federal probation and restitution, after pleading guilty to one count of wire fraud against. The St. Louis Post-Dispatch reports 27-year-old William Joseph “Billy” Schwarze entered his plea in court, admitting that he used a glitch with gift cards to travel for free.
Gift Card Scam Involved Buying, Then Refunding Tickets
According to attorneys working on the case, Schwarze would buy American Airlines gift cards between January 2016 and October 2018 using his personal credit cards, then purchase airfare with the airline. Either immediately before or shortly after a flight, he would then apply for a refund, which was supposed to go to the non-refundable gift cards. However, the computer system allowed him to receive a refund directly to his credit card, offsetting the purchase.
Schwarze advertised his services as if he were a travel agent, telling people that he would travel over 200,000 air miles per year and held elite status with hotels and airlines. He would then book flights for others, charging a combined total of $20,000 for his services. But instead of legitimately paying for flights, he would use the computer glitch to book flights and get refunds, allowing him to directly pocket the money.
Since discovering the glitch, American says they have updated their systems to prevent the same thing happening again. Prosecutors say Schwarze stole $160,000 from the airline.
Under the plea agreement, Schwarze will be ordered to repay around $180,000 in restitution to his victims. Instead of jail time, attorneys for both sides say they will recommend probation instead.
Gift Card Scam Latest Airline-Related Crime Prosecuted
The guilty plea is the latest victory for U.S. district attorneys fighting against airline fraud. Earlier in September 2020, a former airline employee plead guilty to conspiracy to commit wire fraud, after lawyers say he would obtain fake airline IDs for people to fly for free using non-revenue space.
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