Wow: Southwest Employee Sold $1.9 Million In Fraudulent Vouchers

Wow: Southwest Employee Sold $1.9 Million In Fraudulent Vouchers

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A former Southwest Airlines employee has been indicted for allegedly creating and then selling nearly $1.9 million worth of travel vouchers. The details of this are fascinating.

Southwest employee created and sold travel vouchers

The United States Attorney’s Office for the Northern District of Illinois has arrested two people in connection with a scheme involving Southwest Airlines vouchers. Specifically, 36-year-old DaJuan Martin of Bolingbrook, Illinois, has been charged with 12 counts of wire fraud, while 46-year-old Ned Brooks has been charged with four counts of wire fraud. Each count of wire fraud is punishable with up to 20 years in jail.

From November 2018 until June 2022, Martin worked as a customer service agent at Chicago Midway Airport (MDW) for Southwest. It seems that the first three or so years of his employment went pretty smoothly, and then he got greedy. Between February and June of 2022, he’s accused of creating and selling travel vouchers worth $1,875,900.

How could this be possible? Southwest employees have the ability to issue travel vouchers known as “Southwest LUV vouchers,” which are ordinarily issued when passengers have an unfavorable travel experience.

Martin would use fictitious customer names to generate these vouchers without Southwest’s knowledge or approval. He then sold the vouchers below market value to Brooks and others, in exchange for cash. It’s not known exactly how much under “market value” he sold these vouchers for, and how much cash he generated.

The 12 counts of wire fraud focus on 12 different times that money was wired in relation to vouchers worth anywhere from $200 to $500 each.

This scheme involves nearly $1.9 million in vouchers

My gosh, that’s quite some volume…

Just to crunch some numbers here, this fraud reportedly happened over the course of roughly four months, from February until June of 2022. If you generated $1,875,900 worth of vouchers over the course of 120 days, that comes out to around $15,600 worth of vouchers each day.

That would be 78 $200 vouchers per day, or 31 $500 vouchers per day. And that assumes you’re not taking any days off (presumably he wasn’t working seven days per week, in which case it’s even more worth of vouchers each day).

I realize this stuff is probably only audited every so often, which is how Martin got caught. But seriously, did he even have any time to work, with the amount of time spent on this scheme? You’d think there would be some system in place to prevent this. Then again, Southwest doesn’t exactly have great IT, and presumably this wasn’t an issue until now. Maybe that will change going forward.

This guy must have been busy for several months!

Bottom line

Two people have been charged with wire fraud, in relation to a Southwest Airlines voucher scheme. A Southwest customer service agent is accused of generating nearly $1.9 million worth of vouchers over the course of four months. These are intended for customer service recovery, but he instead generated them using fake names, and then sold them at a discount off face value.

He’s now charged with 12 counts of wire fraud, each of which is punishable with up to 20 years in jail. The person who was largely buying these vouchers off of him has also been charged with four counts of wire fraud.

What do you make of this Southwest scheme?

Conversations (14)
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  1. Lady Esther Anderson Guest

    If you keep your hands clean and remember to ask yourself, what would Judge Judy do ? You would know not to engage in that fraud and your life would remain scandal and trouble free. Good Luck and see you sitting in court waiting for the consequences to be handed down. You'll win or lose by how you decide to CHOOSE. So choose to do the right thing and rest in your own bed at home in comfort. Not in a jail or prison cell after your wrongdoings.

  2. Lady Esther Anderson Guest

    If you keep your hands clean and remember to ask yourself, what would Judge Judy do ? You would know not to engage in that fraud and your life would remain scandal and trouble free. GOOD Luck and see you sitting in court waiting for the consequencesto be handed down.

  3. Marco Guest

    You call them fraudsters, I call them digital entrepreneurs

  4. Lisa A Hurdle Guest

    Good crime doesn't pay one of my close brother says men are stupid that's a good job know hell think bout was it worth that greed and lust with mess you up everytime

    1. Bandmeeting Guest

      This gave me a headache.

  5. Robert Fahr Guest

    I imagine if a pax committed far fewer acts of skiplagging, the software would work just perfectly.

  6. David Diamond

    The employee thought you just needed to commit fraud on a large sum and he'd get a slap on the wrist if he got caught. He failed to understand it's not about the sum involved, it's about being a executive. Only a white collar criminal can potentially get away with defrauding millions (or hundreds of millions), and only if you aren't scamming other rich people.

  7. Greg Guest

    I'm glad the airlines got screwed. They deserve far worse for the level service they don't provide. CEOs should be getting 20 years.

  8. GKK Guest

    United (then Continental) had a somewhat similar, but less sophisticated fraud perpetrated against it about 10-15 years ago. The agent (Victoria Scardigno) went to federal prison for a few years for orchestrating it.

  9. Exit Row Seat Guest

    Usually, these things start with the employee making an innocent mistake (wrong name or ticket # or boarding ID), but not detected by a supervisor whose sole focus is turn around time and flight delays. Then the employee gets in a bind (rent, car note, helping a relative), and things get out of hand. Volume grows and the money keeps rolling in.

    The detection is either another employee who calls the company Hot Line...

    Usually, these things start with the employee making an innocent mistake (wrong name or ticket # or boarding ID), but not detected by a supervisor whose sole focus is turn around time and flight delays. Then the employee gets in a bind (rent, car note, helping a relative), and things get out of hand. Volume grows and the money keeps rolling in.

    The detection is either another employee who calls the company Hot Line or someone complains on the phone, "I spent good money to purchase this voucher, why won't you honor it" to a phone rep. The rep calls a supervisor who calls the fraud department. A scrub is made of all the vouchers issued and the employee is confronted in an office by the fraud department. Police are called and the DA is consulted.

    Either controls were in place but no one was watching; or none existed in the first place. The supervisor will be reprimanded, as well as the airport manager, and maybe a VP as well. Lots of finger pointing and lots of egg on everyone's face. Someone's career is dinged and someone else ends up with a criminal record. Not a happy place!!

    1. Bagoly Guest

      First paragraph applies all the way up to several of the nine-figure trading scandals.
      What would be fascinating to know with those is how many start the same, but by luck they do make money, and close out.

  10. Marshall evans Guest

    We should build a underground hi speed rail system betwixt major cities with trains leaving every hour

  11. Icarus Guest

    Southwest clearly has a crappy audit system. The issuing of any documents should be in conjunction with a booking, so they obviously have no control system in place.

    Then there are the customers who purchased tickets using fraudulent documents who are as guilty as they know what they were doing.

    Assume any unused documents will be cancelled.

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Exit Row Seat Guest

Usually, these things start with the employee making an innocent mistake (wrong name or ticket # or boarding ID), but not detected by a supervisor whose sole focus is turn around time and flight delays. Then the employee gets in a bind (rent, car note, helping a relative), and things get out of hand. Volume grows and the money keeps rolling in. The detection is either another employee who calls the company Hot Line or someone complains on the phone, "I spent good money to purchase this voucher, why won't you honor it" to a phone rep. The rep calls a supervisor who calls the fraud department. A scrub is made of all the vouchers issued and the employee is confronted in an office by the fraud department. Police are called and the DA is consulted. Either controls were in place but no one was watching; or none existed in the first place. The supervisor will be reprimanded, as well as the airport manager, and maybe a VP as well. Lots of finger pointing and lots of egg on everyone's face. Someone's career is dinged and someone else ends up with a criminal record. Not a happy place!!

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Never In Doubt Guest

Sir, this is a Wendy’s.

3
Icarus Guest

Southwest clearly has a crappy audit system. The issuing of any documents should be in conjunction with a booking, so they obviously have no control system in place. Then there are the customers who purchased tickets using fraudulent documents who are as guilty as they know what they were doing. Assume any unused documents will be cancelled.

2
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