U.S. v. Klouse (5th Cir. (Tex.) Dec. 15, 2006). An American Airlines employee fraudulently used the company’s Travel Authorization Certificates to have tickets for 88 flights issued for friends and family members. The employee pleaded guilty to use of unauthorized access devices in violation of 18 U.S.C. sec. 1029(a)(2).
On appeal, the employee challenged the portion of her sentence requiring restitution in the amount of $166,603, which was the market value of the fraudulent airline tickets (using the lowest applicable fare). She argued that the figure should be based on American’s internal (apparently lower) valuation of the certificates for tax and insurance purposes. The court held that certain comments in the Sentencing Guidelines supported the market value loss calculation.
This opinion is important because it gives airlines ammunition against discount and upgrade certificate brokers and others who practice certificate fraud against airlines. Not only does it confirm that certificate fraud constitutes unauthorized access device use, but it also confirms that airlines can obtain restitution in criminal cases, and damages in civil cases, based on the market value of the fraudulent tickets.