Delta Air Lines employee from Minnesota accused of $22 million fraud
A Delta Air Lines supervisor in Minnesota has been indicted on charges that he approved $22 million in phony invoices over nine years, all submitted by a co-conspirator in California.
According to a grand jury indictment in Atlanta, Paul Anderson of Apple Valley in 2004 began a plan to defraud what was then Northwest Airlines -- and continued to do so long after Northwest merged with Delta in 2009.
"The longevity and scope of the scheme to defraud Delta is simply astonishing," U.S. Attorney Sally Quillian Yates said in a statement Friday.
Anderson, 57, is charged with conspiring with Michael Yedor of Los Angeles, who submitted scores of phony invoices under the corporate name "Airborne Voice and Data Communication Services."
The pair was indicted June 10, and the indictment was unsealed June 21, after the FBI arrested Yedor on his 72-foot yacht in San Diego.
Attempts to reach Anderson were unsuccessful Monday.
Anderson, a 35-year Northwest/Delta veteran, was the supervisor of Northwest's communications group, which installed and maintained radio communications for the airlines' control and crisis centers. After the airlines' 2009 merger, he remained the supervisor of the Twin Cities communications group.
Northwest was based in Eagan; Delta is in Atlanta.
According to the indictment, Anderson and Yedor used invoices "requesting payment from Northwest for goods and services purportedly provided by Airborne, when in fact, as both Anderson and Yedor knew, Airborne was not providing any goods or services" to the airline.
After Anderson approved the invoices, he submitted them for processing and payment, and then checks were mailed to an account in Los Angeles, the indictment said.
"A portion of the funds fraudulently obtained from the airlines ... were routinely transferred or 'kicked-back' to Anderson," the indictment said, without providing specific figures.
The indictment spells out scores of payments that Delta issued -- 24 separate checks in 2012 alone, with individuals checks ranging in size from $20,000 to more than $182,000.
Anderson and Yedor were indicted on one count of conspiracy to commit mail fraud, along with 96 counts of mail fraud. Prosecutors say Delta is "fully cooperating with the investigation."
Prosecutors are asking that, if convicted, Anderson and Yedor forfeit property they obtained in the scheme, including Yedor's yacht, and property in Los Angeles.
Attached to the indictment was a list of Beverly Hills luxury merchants where some of the proceeds were allegedly spent, including $98,000 at Cartier jewelers, $61,000 at Chanel #2, $27,000 at Hermes and $10,000 at Gucci.