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.
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.
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?
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