Nearly a year and a half ago travel agent Gennady Podolsky was indicted over alleged improper use of Delta’s small business SkyBonus program. The government accused him of earning 42 million SkyBonus points for his customers’ travel. The Department of Justice sent out a press release about the case – and wound up bargaining down to a misdemeanor and no jail time.

The story initially received substantial media coverage. Delta was quoted as thrilled to see the government enforcing its program rules using criminal law. At the time Podolsky’s lawyers suggested there was no fraud, that “Delta actually netted millions of dollars of profits from its relationship” and no clients were disadvantaged, either.

I didn’t cover the story at the time because, in full disclosure, I was engaged by the defense in the matter. I might have been called to testify. I can report, though, that the matter has been fully resolved. Mr. Podolsky’s attorneys share that their client pled guilty to a single misdemeanor to avoid trial.

Attorneys Seth D. Kirschenbaum and Nicholas A. Lotito today announce the resolution of the federal criminal case against their client, Gennady Podolsky.

Mr. Podolsky received a sentence of 12 months on probation for a single misdemeanor count on the recommendation of the government. Mr. Podolsky agreed to pay Delta $1 million in restitution. United States District Judge Steve Jones agreed this was an appropriate disposition of the case. Judge Jones also signed an Order presented by the government dismissing all 12 felony charges that had previously been brought against Mr. Podolsky.

Gennady Podolsky, a prominent international travel advisor, was charged in September, 2019 by the United States Attorney for the Northern District of Georgia in Atlanta, Georgia with multiple felonies relating to allegations that he fraudulently obtained points in a Delta Air Lines corporate loyalty program known as the SkyBonus Program. Atlanta is the home of Delta Air Lines.

Mr. Podolsky expressed remorse for his conduct. During the nearly six years that have passed since this activity ended in April, 2015, Mr. Podolsky has conducted himself in exemplary fashion.

We emphasize that Mr. Podolsky was not accused of acting in a manner that worked to the disadvantage of any of his clients. Service to his clients has always been, and continues to be, his single most important professional goal. For the past twenty-five years, Gennady Podolsky has faithfully served his loyal clientele of international travelers. He now looks forward to continuing to serve his clients as a travel advisor and putting this matter behind him.

I’ve served as an expert witness in a federal trial about SkyBonus points in the past (and in other sorts of cases as well). I don’t like to see airlines turning commercial disputes over to the government to handle through criminal law.

In this case it seemed clients benefited from the agent’s knowledge, and Delta earned business they wouldn’t otherwise have received. It’s up to Delta whether they want that business of course, but in my personal view the criminal justice system shouldn’t have become involved. Ultimately prosecutors, looking closely at the facts, agreed that jail time wasn’t an appropriate outcome here either. I was sorry to see Mr. Podolsky go through what he did.