A travel agency owner defrauded agents out of hundreds of thousands of dollars in commission payments and used the money to fund lavish foreign trips.
The travel agency owner, based in the US state of Minnesota, has pleaded guilty to a scheme to defraud travel agents out of more than US$400,000 in commission payments, acting US Attorney W. Anders Folk announced. The owner used the proceeds to fund his personal travel to Australia, the Caribbean, Mexico, Alaska, and multiple European countries.
According to court documents, Matthew Harold Schumacher, 45, was owner and operator of Travel Troops, LLC, and Vacation Agent Nation, LLP, which were host travel agencies based in Waseca, Minnesota. Through his businesses, Schumacher purported to provide host travel services to independent travel agents throughout the United States in exchange for a monthly fee.
Schumacher represented that his host travel business was a reliable and profitable means for his fee-paying travel agents to receive higher commission rates from travel industry suppliers, such as airlines, resorts, and cruise companies, than if the individual travel agents booked their customers’ travel arrangements.
Pursuant to service agreements that Schumacher entered into with travel agents, Schumacher claimed to receive and collect on behalf of travel agents commission payments from travel industry suppliers and to distribute those commission payments to the various travel agents who booked the travel and earned the commissions.
According to court documents, Schumacher defrauded at least 36 travel agents by misappropriating for his own personal use and benefit at least approximately US$484,000 in commission payments owed to them from travel suppliers.
According to court documents, Schumacher tried to retain his travel agents’ money and to lull them into a false sense of security by, among other things, providing the travel agents with partial payments and by giving them materially false and fraudulent information.
Schumacher misappropriated travel agents’ commission payments for his own personal use and benefit by, among other things, depositing at least approximately US $160,000 to a personal account, funding of at least approximately $150,000 for his own travel expenses, including travel to Australia, the Caribbean, Mexico, Alaska, and multiple European countries and withdrawing at least approximately US$33,000 in cash.
The court documents say Schumacher bought approximately US$3117 of electronics at Best Buy, as well as making payments for personal expenses, such as retail purchases, restaurant bills, car payments, credit card bills, StubHub ticket purchases, and loan payments.
This case is the result of an investigation conducted by the FBI.
Assistant US Attorney Matthew S. Ebert is prosecuting the case.
Edited by Peter Needham
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