Two of three former co-owners of a Bountiful travel agency charged with defrauding customers and airlines in a frequent-flier mileage scheme have pleaded guilty and been sentenced to jail. The third owner has also pleaded guilty and will be sentenced in January.
The three co-owned Elite Travel, a Bountiful travel agency that opened in early 1991. The agency placed ads in national publications and began purchasing frequent-flier mileage vouchers.According to court records, the agency turned in the vouchers for tickets, which it then sold to new customers.
According to investigators from the Utah attorney general's office, buying frequent-flier miles is not illegal. But most airlines have restrictions on selling or bartering the vouchers and restrict their transfer to relatives.
According to investigators, purchasers of tickets through Elite were instructed by agency employees to tell the airline they were relatives of the persons from whom the agency had purchased the vouchers.
And, according to court records, agency employees used false identification cards while trading the vouchers for tickets.
Investigators from the state attorney general's office charged agency co-owners Roger J. Davis of Farmington, Ruth W. Ashton of Lewiston, Cache County, and Van Cleverly of Salt Lake City in November with multiple counts of communications and theft charges.
The scheme over the course of a year bilked airlines out of nearly $750,000, according to investigators.
The theft charges stem from several incidents in which customers purchased tickets from the agency, but the airlines, suspecting fraud, refused to honor the tickets and the customers were not reimbursed.
The agency went out of business in August 1992, before the state began its investigation.
Cleverly pleaded guilty in 2nd District Court to a single second-degree felony charge of communications fraud and is serving a one-to-15-year prison term, according to court records.
Ashton pleaded guilty last week to one count each of communications fraud and theft and was sentenced to concurrent six-month jail terms by Judge Jon Memmott. The judge fined her $2,300 and ordered her to pay $14,000 in restitution.
Davis, according to court records, has also pleaded guilty to fraud and theft charges and will be sentenced Jan. 11.