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The Challenge of Outside Agents

The Challenge of Outside Agents. June 25, 2009 Doug Nass, ARC Field Investigations &Fraud Prevention. More problems than ever…. Why?? Fraudsters can easily hide their true identity Host agents might not vet their outside agents Can operate from anywhere in the world

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The Challenge of Outside Agents

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  1. The Challenge of Outside Agents June 25, 2009 Doug Nass, ARC Field Investigations &Fraud Prevention

  2. More problems than ever… Why?? Fraudsters can easily hide their true identity Host agents might not vet their outside agents Can operate from anywhere in the world Remote ticketing ability vs. remote booking ability All parties are presumed innocent until found guilty in a court of law. 9/25/2014 ARC PROPRIETARY AND CONFIDENTIAL. This document includes confidential information that is proprietary to Airlines Reporting Corporation (ARC). Disclosure of this document or any information contained herein to third parties is prohibited without the prior written consent of an authorized ARC officer. Obsolete versions of this document should be destroyed in a manner to prevent compromise of the information, e.g., shredding. 2

  3. Cast of Characters • Mark Sxxxxxxxger - Chxxxl Valley Travel • Luis Arxxxxxriz - Noxxxxore • Jose Mxxxxyo - Elxxe Air Company • David Gxxl – American residing in Italy All parties are presumed innocent until found guilty in a court of law. ARC PROPRIETARY AND CONFIDENTIAL. This document includes confidential information that is proprietary to Airlines Reporting Corporation (ARC). Disclosure of this document or any information contained herein to third parties is prohibited without the prior written consent of an authorized ARC officer. Obsolete versions of this document should be destroyed in a manner to prevent compromise of the information, e.g., shredding.

  4. Mark Sxxxxxxxger Info Owner of non-ARC agency Chxxxl Valley Travel, Little Rock, AR, and Acxxxs to Travel, Pasadena, CA Began brokering FF miles in late 80’s/early 90’s Outside agent for a number of ARC-accredited agencies Obtains customers through website chxxxlvalleytravel.com Associated with numerous other non-ARC agencies Gained control of an ARC agency in Feb 2009 All parties are presumed innocent until found guilty in a court of law. 9/25/2014 ARC PROPRIETARY AND CONFIDENTIAL. This document includes confidential information that is proprietary to Airlines Reporting Corporation (ARC). Disclosure of this document or any information contained herein to third parties is prohibited without the prior written consent of an authorized ARC officer. Obsolete versions of this document should be destroyed in a manner to prevent compromise of the information, e.g., shredding. 4

  5. Delta UATP Case Details Discovered through routine FIT review (next slide) Account opened in early June 2008 Center For AIDS Prevention – Steve Neely, President Former owner of Herbal Hope, Beverly Hills Account closed in early August 2008 216 tickets issued on 30 carriers for $690,000 Case opened with the FBI in Little Rock, AR All parties are presumed innocent until found guilty in a court of law. 9/25/2014 ARC PROPRIETARY AND CONFIDENTIAL. This document includes confidential information that is proprietary to Airlines Reporting Corporation (ARC). Disclosure of this document or any information contained herein to third parties is prohibited without the prior written consent of an authorized ARC officer. Obsolete versions of this document should be destroyed in a manner to prevent compromise of the information, e.g., shredding. 5

  6. Fraudulent Itinerary Ticketing Returning from the Beijing Olympics All parties are presumed innocent until found guilty in a court of law. 9/25/2014 ARC PROPRIETARY AND CONFIDENTIAL. This document includes confidential information that is proprietary to Airlines Reporting Corporation (ARC). Disclosure of this document or any information contained herein to third parties is prohibited without the prior written consent of an authorized ARC officer. Obsolete versions of this document should be destroyed in a manner to prevent compromise of the information, e.g., shredding. 6

  7. Shady AIDS Charity With a Big Web Campaign by Christopher Weaver, ProPublica - March 24, 2009 11:44 am EDT Peter Taback's first reaction to the Center for AIDS Prevention's prominent advertisement on the New York Times'Web site [2] was jealousy. Taback, communications director for the San Francisco AIDS Foundation [3], was impressed another organization had cast its reach so far. But on closer inspection, his envy shifted to outrage. Some aspects of Neely's past business dealings also raise questions. In the summer of 2005, Neely's company, World Preferred, a cellular phone retailer, dissolved, and he filed for bankruptcy in the Central District of California, claiming only $3,500 in cash and personal property, as well as two cars to his name. Court documents show he owed creditors more than $1.2 million, including $328,059 to the IRS. Five months later, an Illinois bank sued him in the same court, alleging he'd sold a Toyota Land Cruiser the bank had financed and pocketed the money instead of paying off his loans. All parties are presumed innocent until found guilty in a court of law. 9/25/2014 ARC PROPRIETARY AND CONFIDENTIAL. This document includes confidential information that is proprietary to Airlines Reporting Corporation (ARC). Disclosure of this document or any information contained herein to third parties is prohibited without the prior written consent of an authorized ARC officer. Obsolete versions of this document should be destroyed in a manner to prevent compromise of the information, e.g., shredding. 7

  8. Sxxxxxxxger’s Customer Base Hollywood crowd Traditional and Risqué Thoroughbred horseracing community Jockeys, trainers, owners Leader of Northern Irish political party Sinn Fein Business travelers looking for bargains via the internet All parties are presumed innocent until found guilty in a court of law. 9/25/2014 ARC PROPRIETARY AND CONFIDENTIAL. This document includes confidential information that is proprietary to Airlines Reporting Corporation (ARC). Disclosure of this document or any information contained herein to third parties is prohibited without the prior written consent of an authorized ARC officer. Obsolete versions of this document should be destroyed in a manner to prevent compromise of the information, e.g., shredding. 8

  9. Questions in Search of Answers Is the Center For AIDS Prevention opened by Steve Neely legitimate? How did Sxxxxxxxger gain control of the DL UATP account? What is the relationship between Neely and Sxxxxxxxger? Was Neely to receive a % of the total amount charged on the account? How was Sxxxxxxxger to pay Neely for use of the account? Can Sxxxxxxxger prove that he paid Neely for use of the account? How did passengers pay Sxxxxxxxger? All parties are presumed innocent until found guilty in a court of law. 9/25/2014 ARC PROPRIETARY AND CONFIDENTIAL. This document includes confidential information that is proprietary to Airlines Reporting Corporation (ARC). Disclosure of this document or any information contained herein to third parties is prohibited without the prior written consent of an authorized ARC officer. Obsolete versions of this document should be destroyed in a manner to prevent compromise of the information, e.g., shredding. 9

  10. Luis Arxxxxxriz Non-ARC agencies: Noxxxxore: West New York, NJ (most recent) Nxxe Travel Service: West New York, NJ Acxxxxrvices, West Union City, NJ Others too numerous to list Long association with other non-ARC agents All parties are presumed innocent until found guilty in a court of law. 9/25/2014 ARC PROPRIETARY AND CONFIDENTIAL. This document includes confidential information that is proprietary to Airlines Reporting Corporation (ARC). Disclosure of this document or any information contained herein to third parties is prohibited without the prior written consent of an authorized ARC officer. Obsolete versions of this document should be destroyed in a manner to prevent compromise of the information, e.g., shredding. 10

  11. Credit card and check “problems” On a “cash-only” basis with some consolidators FIT Airline interline billing schemes Luis Arxxxxxriz All parties are presumed innocent until found guilty in a court of law. 9/25/2014 ARC PROPRIETARY AND CONFIDENTIAL. This document includes confidential information that is proprietary to Airlines Reporting Corporation (ARC). Disclosure of this document or any information contained herein to third parties is prohibited without the prior written consent of an authorized ARC officer. Obsolete versions of this document should be destroyed in a manner to prevent compromise of the information, e.g., shredding. 11

  12. Reservations made by Arxxxxxriz All parties are presumed innocent until found guilty in a court of law. 9/25/2014 ARC PROPRIETARY AND CONFIDENTIAL. This document includes confidential information that is proprietary to Airlines Reporting Corporation (ARC). Disclosure of this document or any information contained herein to third parties is prohibited without the prior written consent of an authorized ARC officer. Obsolete versions of this document should be destroyed in a manner to prevent compromise of the information, e.g., shredding. 12

  13. Jose Mxxxxyo – Elxxe Air Company AKA “Joseph” Mxxxxyo Cranford & Westfield, NJ area UPS store used as address for the Cranford location House address used for the Westfield location Website: airlinesbrokers.com “Purchased” St. Augustine Travel, St. Augustine, FL in January 2009 Owner of record placed agency up for sale via internet No Change of Ownership paper submitted to ARC. All parties are presumed innocent until found guilty in a court of law. 9/25/2014 ARC PROPRIETARY AND CONFIDENTIAL. This document includes confidential information that is proprietary to Airlines Reporting Corporation (ARC). Disclosure of this document or any information contained herein to third parties is prohibited without the prior written consent of an authorized ARC officer. Obsolete versions of this document should be destroyed in a manner to prevent compromise of the information, e.g., shredding. 13

  14. FIT review in mid-Feb 2009 revealed that something was amiss at St. Augustine Travel Initially it was thought that Luis Arxxxxxxriz was involved Debit Memos for: CC chargebacks for airline tickets CC chargebacks for TASF’s FIT Jose Mxxxxyo – Elxxe Air Company All parties are presumed innocent until found guilty in a court of law. 9/25/2014 ARC PROPRIETARY AND CONFIDENTIAL. This document includes confidential information that is proprietary to Airlines Reporting Corporation (ARC). Disclosure of this document or any information contained herein to third parties is prohibited without the prior written consent of an authorized ARC officer. Obsolete versions of this document should be destroyed in a manner to prevent compromise of the information, e.g., shredding. 14

  15. Pax Stopped at LAX by NZ Pax paid NZ at LAX $4,500 to travel LAX-AKL-WLG. All parties are presumed innocent until found guilty in a court of law. 9/25/2014 ARC PROPRIETARY AND CONFIDENTIAL. This document includes confidential information that is proprietary to Airlines Reporting Corporation (ARC). Disclosure of this document or any information contained herein to third parties is prohibited without the prior written consent of an authorized ARC officer. Obsolete versions of this document should be destroyed in a manner to prevent compromise of the information, e.g., shredding. 15

  16. Investigation Leads Name and credit card searches via LEWS identified other agencies thatdealt with Mxxxxyo All parties are presumed innocent until found guilty in a court of law. 9/25/2014 ARC PROPRIETARY AND CONFIDENTIAL. This document includes confidential information that is proprietary to Airlines Reporting Corporation (ARC). Disclosure of this document or any information contained herein to third parties is prohibited without the prior written consent of an authorized ARC officer. Obsolete versions of this document should be destroyed in a manner to prevent compromise of the information, e.g., shredding. 16

  17. David Gxxl AKA Davis Jerome Moxxxr American living in Northern Italy (next slide) Signs up as an outside sales agent with host agencies in the U.S. Uses compromised credit cards to issue tickets remotely Tickets for students to travel intra-Europe or between US and Europe Website: centuryxxxxxxworld.com Promised free airline tickets for 700 U.S. college students to help campaign for Obama All parties are presumed innocent until found guilty in a court of law. 9/25/2014 ARC PROPRIETARY AND CONFIDENTIAL. This document includes confidential information that is proprietary to Airlines Reporting Corporation (ARC). Disclosure of this document or any information contained herein to third parties is prohibited without the prior written consent of an authorized ARC officer. Obsolete versions of this document should be destroyed in a manner to prevent compromise of the information, e.g., shredding. 17

  18. American Residing in Italy David Gxxl All parties are presumed innocent until found guilty in a court of law. 9/25/2014 ARC PROPRIETARY AND CONFIDENTIAL. This document includes confidential information that is proprietary to Airlines Reporting Corporation (ARC). Disclosure of this document or any information contained herein to third parties is prohibited without the prior written consent of an authorized ARC officer. Obsolete versions of this document should be destroyed in a manner to prevent compromise of the information, e.g., shredding. 18

  19. Outside Sales Agent Identified 7 victim travel agencies via pax name and credit card searches: Advantage Travel & Incentives 24520322 93 tickets = $167,422 Priority Travel Services 24547471 43 tickets = $17,820 A Small World Travel 52647836 50 tickets = $39,384 Passageways Travel Service 2373566 14 tickets = $14,037 All parties are presumed innocent until found guilty in a court of law. 9/25/2014 ARC PROPRIETARY AND CONFIDENTIAL. This document includes confidential information that is proprietary to Airlines Reporting Corporation (ARC). Disclosure of this document or any information contained herein to third parties is prohibited without the prior written consent of an authorized ARC officer. Obsolete versions of this document should be destroyed in a manner to prevent compromise of the information, e.g., shredding. 19

  20. Outside Sales Agent • Identified 7 victim travel agencies via pax names and credit card searches (continued) • Dan Howell Travel 36631825 • 63 tickets = $99,439 • Iobst Travel Service 39710020 • 76 tickets = $175,902 • USA Gateway 45668571 • 6 tickets = $5,512 • Totals: 345 = $519,516 All parties are presumed innocent until found guilty in a court of law. 9/25/2014 ARC PROPRIETARY AND CONFIDENTIAL. This document includes confidential information that is proprietary to Airlines Reporting Corporation (ARC). Disclosure of this document or any information contained herein to third parties is prohibited without the prior written consent of an authorized ARC officer. Obsolete versions of this document should be destroyed in a manner to prevent compromise of the information, e.g., shredding. 20

  21. Further Details “Phishing” schemes to gain passwords and system log-ins Owners/managers locked out of GDS’s Often occurs over the weekend Contacted law enforcement in Minnesota and Colorado to pursue this case, but… All parties are presumed innocent until found guilty in a court of law. 9/25/2014 ARC PROPRIETARY AND CONFIDENTIAL. This document includes confidential information that is proprietary to Airlines Reporting Corporation (ARC). Disclosure of this document or any information contained herein to third parties is prohibited without the prior written consent of an authorized ARC officer. Obsolete versions of this document should be destroyed in a manner to prevent compromise of the information, e.g., shredding. 21

  22. What is being done about this…?? By ARC… Numerous messages to travel agents Encourage Host agents to sign up only VTC agents By Carriers… Monitor the GDS activity of known offenders Debit memos can send a strong message to Host agents Intercept passengers for interview – just a “friendly” chat All parties are presumed innocent until found guilty in a court of law. 9/25/2014 ARC PROPRIETARY AND CONFIDENTIAL. This document includes confidential information that is proprietary to Airlines Reporting Corporation (ARC). Disclosure of this document or any information contained herein to third parties is prohibited without the prior written consent of an authorized ARC officer. Obsolete versions of this document should be destroyed in a manner to prevent compromise of the information, e.g., shredding. 22

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