Kansas City, Mo. Federal authorities in Kansas City moved Friday to strike at the heart of a nationwide illicit travel industry.
Prosecutors here announced indictments against more than three dozen defendants — including one former reality TV show contestant — who allegedly created an illegal black market in deeply discounted airline tickets by purchasing them with stolen identities.
The schemes, which operated from December 2001 until March 2010, charged as little as $75 for tickets that were worth many times that amount, prosecutors alleged.
U.S. Attorney Beth Phillips estimated the total loss to airlines, banks, merchants and credit card holders at more than $20 million.
“What began as a local law enforcement investigation ultimately exposed an extensive nationwide black market for airline tickets,” Phillips said.
Here’s how prosecutors alleged that it worked:
Customers of the scheme would call what authorities described as a “black market travel agent” or the agent’s broker and order airline tickets. Using stolen credit card information, the black market agent then would book the seats in the customer’s name, often over the Internet.
The agents would book flights close to the departure dates to ensure that airlines, credit card companies or identity theft victims would not detect the fraudulent purchases, according to court records.
“As a result, a passenger could often complete his or her trip before the credit or debit card was detected as being compromised,” prosecutors noted in court records.
The scheme’s customers then would pay the agent up to $250 per ticket, while the identity theft victim would receive the bill for the real cost of the travel, often thousands of dollars.
How much the victims actually ended up paying depended on their individual agreements with their credit or debit card issuer, Phillips said.
Word of mouth
She said the various conspiracies generally depended on brokers to round up buyers for the black-market airline tickets.
“Any advertising was minimal,” Phillips said. “This mostly was spread through word of mouth.”
Charges contained in the indictment generally included credit card fraud and identity theft.
In announcing charges against 38 men and women, prosecutors alleged conspirators sometimes purchased the stolen identities from sources in Bangladesh and Vietnam.
Conspirators also obtained identities from their work at hotels in Overland Park, Kan.; Long Beach, Calif.; and the Atlanta area, court records alleged. The hotels weren’t identified. Other conspirators purportedly harvested private credit card information from their jobs at credit card customer service call centers.
The event that triggered the investigation came in November 2005 when two Missouri women, Sabrina Bowers, 29, of Kansas City and Deidre Turner, 27, of Peculiar allegedly stole a laptop from an Overland Park home.
Overland Park and Shawnee police later seized mail and credit card numbers, one of which had allegedly been used to purchase a number of airline tickets.
The case soon expanded from coast to coast. Other defendants lived in Georgia, Florida, New York, Illinois, California, Indiana, Pennsylvania and Michigan. Authorities alleged that the thousands of victims they preyed on lived in more than 40 cities in more than half the states of the union, Washington, D.C., and Saskatchewan, Canada.
In August 2009, federal agents began questioning customers of the alleged scheme about their travel paid for with stolen credit card information.
In one instance, alleged black market agent Edwon Simmons of Chicago advised his customer, Monique Calhoun of Los Angeles to either ignore the postal inspector’s call or lie, telling the agent that she had purchased the ticket with a money order on an online classified ad site.
Both Simmons, 34, and Calhoun, 23, also face single counts of making a false statement to a federal agent.
In 2006, Calhoun was a contestant on “America’s Next Top Model” but was eliminated after missing a photo shoot. A program executive later told TV Guide magazine that producers counseled Calhoun after several of the other models expressed concern about their physical safety around her.
Calhoun had not yet been arrested as of Friday.