American Airlines $160K Gift Card & Ticketing Scam

American Airlines had a system vulnerability that allowed you to buy a gift card that you used to purchase an airline ticket, and then refund the gift card purchase back to the credit card while using the airline ticket.

Mr. William Joseph “Billy” Schwarze implied to his friends & family that he was running an elite travel agency who purchased tickets from Mr. Schwarze. He bought tickets worth more than $160K using this fraudulent method.

You can access AA here.

Here’s an excerpt from the St. Louis Post-Dispatch:

William Joseph “Billy” Schwarze, 27, told people that he was affiliated with a travel agency and was planning to open his own travel business, prosecutors said. He referred to himself online as a travel agent who had “elite airline and hotel statuses,” and he claimed to log “about 200,000 flight miles a year. My background allows me to optimize airline and hotel customer experience programs to build exceptional travel value for you,” his plea records quoted him as saying.

In reality, Schwarze was exploiting a glitch in American’s computer systems. From January 2016 through October 2018, Schwarze bought gift cards online using his personal credit cards, then used those gift cards to buy airline tickets for family, friends and associates to travel across the globe, Assistant U.S. Attorney Hal Goldsmith said in court.

Here’s the plea agreement:

Download (PDF, 1.74MB)

Wire fraud charge:

Download (PDF, 788KB)


If “Billy” had only purchased a ticket or two, this might have gone unnoticed by American Airlines. When you get into hundreds of thousands, the discrepancy will eventually show up in reports, and some will investigate.

I guess that you could call this “travel hacking” that came with a felony charge. What do you think that the sentence should be when it is announced in mid-December?

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