Three indicted in airlines ticket case

Jace Radke

Thursday, Jan. 29, 2004 | 8:56 a.m.

Three people have been charged with defrauding travel agencies and commercial airlines by using false upgrade codes to acquire first-class or business-class tickets at reduced rates and then selling the tickets at inflated prices.

Las Vegans Greg Carter, 48, Susan Carter, 53, and her daughter Jaime Abarghoie, 25, are each charged with one count of conspiracy, 15 counts of wire fraud and four counts of money laundering in connection with the alleged scheme that resulted in more than $1.76 million in losses to travel agencies and airlines.

The defendants used the false codes to obtain upgraded tickets "at a fare at or near coach," according to the indictment. "Defendants then sold the upgraded tickets to unsuspecting customers for a price far in excess of the fare for which they obtained the ticket from the major air carriers."

The scheme allegedly enabled the defendants to collect the price difference between the reduced fare from the entry of a false upgrade code and what they sold the tickets to customers for. The defendants advertised the tickets as discounted from normal first- or business-class prices, but still marked them up from what they fraudulently paid for them, according to the 18-page federal indictment released Wednesday.

The Carters and Abarghoie are scheduled to make an initial appearance before a federal magistrate on Feb. 18. If convicted, each defendant could face up to five years in prison and a $250,000 fine on the conspiracy count, up to 20 years in prison and a $1 million fine on the wire fraud counts and up to 20 years in prison and a $500,000 fine on the money laundering charges.

The indictment charges that the defendants issued the fraudulent tickets through travel agencies approved by the Airline Reporting Corporation, and that they allegedly lied to travel agents saying that they represented people who possessed legitimate upgrade certificates.

The indictment also contains forfeiture allegations to recover the $1.76 million in losses alleged to have been caused by the scheme. A 1994 Rolls Royce sedan, a 1996 Mercedes Benz sedan, and property and more than $95,000 in cash seized from a Bank of America account and a safe deposit box are among the items that could be forfeited if the three are convicted.

The case is being investigated by the FBI and the Secret Service and is being prosecuted by Assistant U.S. Attorney Steven Myhre.