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The frequent fliers who flew too much

Many years after selling lifetime passes for unlimited first-class travel, American Airlines began scrutinizing the costs — and the customers.

May 05, 2012|By Ken Bensinger, Los Angeles Times

Vroom landed at Heathrow that morning. As he boarded American Flight 50 from Dallas/Fort Worth to London the evening before, security officers took note of the clothes he was wearing, down to the Crocs on his feet.

Inside Heathrow, Vroom headed for the VIP lounge, where an American employee handed him a letter and said he could never again fly on the airline.

Vroom was shocked, unable to believe that his golden ticket was gone. He told the airline he had met Mukharji through a friend and, because both had attended Williams College in Massachusetts, simply offered him a ride to the U.S. as a friendly gesture.

With Mukharji insisting he had not paid for his ticket, Cade and her team began tracking down other Vroom flight companions.

In one instance, an American security agent called Sam Mulroy, a Dallas personal trainer who had been set to fly with Vroom to Europe, and told him his trip had been canceled. The agent promised a first-class ticket if he admitted to paying Vroom, according to company emails and correspondence.

When Mulroy refused, American froze his frequent flier account, offering to release it in exchange for details of payments, the documents show. Mulroy complained to American and the Transportation Department that he was being "extorted [in] an effort to punish another customer." He did not respond to requests for comment.

Weeks later, American sued Vroom in Texas state court. Vroom countersued.

In discovery, company lawyers tracked down a Dallas woman who had cut Vroom a $2,800 check to fly her son to London. An elderly couple gave him $6,000 for a trip to Paris. And bank records showed more than $100,000 in checks to Vroom written by owners of a local jewelry store who frequently flew with Vroom.

Vroom admits to getting money from some flying companions, but says it was usually for his business advice and not payments for flights. Other times people insisted on paying him, he said.

Cade wasn't done. In early 2009, the phone rang at the home of Willard May, the former bond broker who openly sold his ticket when he was forced out of work. His AAirpass, too, had been yanked.

"I never tried to deceive American," said May, noting that the Dallas Morning News in 1993 published an article quoting him and an American official about the practice.

Still, May didn't make a fuss when the call came. He'd grown tired of flying.

******

These days, Vroom busies himself substitute teaching and hosting lectures in a custom-made cinder-block home in a hip Dallas neighborhood.

His lawyers say the seat-selling accusation is moot because Vroom's contract didn't prohibit it; American didn't ban the practice until three years after Vroom bought his pass.

Rothstein also denies committing fraud, saying his contract did not ban making multiple reservations. "It sure seems like the airline was looking for an excuse to be rid of my client," said Gary Soter, Rothstein's attorney.

Last summer, an Illinois federal judge ruled that Rothstein had violated the contract by booking empty seats under phony names, including Bag Rothstein. American had years earlier acknowledged that "airport personnel have become complacent" with the practice, court records show, and Soter planned to appeal. But that case and Vroom's were thrown into limbo when American's parent company, AMR Corp., filed for Chapter 11 bankruptcy protection in November.

American spokeswoman Mary Sanderson said the canceled passes are "very isolated and represent an extremely small percentage of our overall AAirpass accounts."

"We actively analyze all of our ticketing and program policies for any improper activity," she said. "If we determine that any activity has violated our policies or is fraudulent in nature, we take the actions we deem appropriate."  

Cade investigated at least two other AAirpass holders, court records show, and concluded that both also had committed fraud. American declined to say why their passes had not been revoked.

Rothstein moved to New York in 2009 and works for a trading firm. His office is crammed with family photos and reminders of exotic locales he visited flying American. Among his possessions is a 1998 letter on company stationery from Bob Crandall, with whom Rothstein once flew on the supersonic Concorde.

"I am delighted that you've enjoyed your AAirpass investment," the executive wrote. "You can count on us to keep the company solid, and to honor the deal, far into the future."

ken.bensinger@latimes.com

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