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Continental pilot pension scam, nine disappointed pilots
Continental Airlines is looking to cash in on pilots who cashed in on a divorce scam. The pilots used sham divorces to divert more than $10 million to their ex-spouses. Post-divorce, the exes cashed in on retirement benefits, and the fliers could stay in the sky – and keep earning.
It's really pretty simple. A couple divorces. The pilot assigns all pension benefits to the ex-spouse. Then, the recipient goes to a state court and gets an order for a lump sum. After the divorce was final long enough for the money to start rolling in, these couples "reconciled." Yep, they remarried once the scam was complete.
So far, eight of the nine pilots are gone (either by quitting or being fired). One was rehired, because he promised to repay the cash. Apparently, he didn't do so fast enough and has been named as a defendant. The spouses are being pursued, as well. Seven of the alleged scammers are men, and two are women.
If you don't want to believe that greed is responsible for the situation, you can call what these pilots did a Darwinian play to protect their cash. The average pilot on Continental is eligible for a lump sum of up to $900,000 upon retirement. But, some airlines are terminating their pension programs and turning them over to the Pension Benefit Guaranty Corp., which backstops pension plans up to an amount that's not even close to $900,000. Faced with the prospect of losing their pensions, therefore some are turning to (alleged) fraud.
In addition to the nine who got nailed, other pilots have tried and failed.
Think that's bad? Click the pictures to read about other women causing problems in the sky:
Filed under: Business, North America, United States, Airlines, News
Reader Comments (Page 1 of 1)
aj May 26th 2009 8:43AM
hopefully their fraudulent efforts didn't effect their flying ability. can't blame them from being afraid of losing their pension in todays world of people like Madoff.
vee kinard May 26th 2009 9:45AM
I'm as ethical as can be and I'm trying to figure out what's wrong with this? They are just protecting their pilot pensions. No scam. It's like divorcing so that one party who is 62 can get a reverse mortgage. Not a scam, just good business!
Nonscanable May 26th 2009 10:26AM
They are just screwing before they get screwed. Pilots should be paid generously and kept dedicated with many benefits. Without the pilots who take chances by flying planes that might or might not be serviced and maintained by substandard mechanics, there would be no airlines. The greedy people who own the airlines wouldn't take a chance with their lives for nothing, why should the pilots? If they want to under pay and take away the benefits, let the mechanics fly the planes. All employers want the same work out of employees who work for less money, and won't be happy until they get it. They already have mechanics from out of the country who can't read english. The others send their planes out of the country to cheaper mechanics. Like the old saying goes, "You get what you pay for".
bubba May 26th 2009 10:35AM
Hey, what they did is no worse than what is being done to every private industry workin person by this government and big businesses.
Stephanie May 26th 2009 2:02PM
You are correct about the Pension Benifit Gauranteed Corp. not coming close to the $900,000.00. I work for another airline. (I'm not a pilot though). I got a letter in the mail 2 years ago stating that under the PBGC plan I would get $321.00 a month once I turn 65! What am I supposed to do with that? It probably won't even pay for the gas that I put into my car. There is no retirement for me and thousands of others. I'll work until I die. Some gaurantee.
pthomp May 26th 2009 11:14AM
What these people did was and is legal and moral. They have not commited any crimes !!!! They were only protecting what is legally and constitutionally theirs. Everything they took they worked for and earned. The morons in washington do absolutly nothing to protect the working class and their pensions so they have to do it themselves. What these people did is no different than a corp. exec cashing in stock options. Execs. don't purchase options anyway. They borrow them for free to make money on them. No exec. in America EVER earned a bonus !!!! The fraud is commited by the execs and politicians. They are the ones who should be giong to jail !!!!! THEY SHOULD BE DYING !!!!!!!
John May 26th 2009 11:19AM
BUT it's ok for the airlines to scam the pilots out of their pensions????
What about all the give backs the pilots were forced (scammed) to agree to over the last 20 years????
Sounds like the pilots deserve to play the game to me.
Ann May 26th 2009 12:03PM
Good for them... I assure you that the fat man at the top will get to keep his pension, stock options, and a nice severance package, oh and lets not forget all the other unmentioned perks when he leaves even if it is only for a few years. I don't blame them because it is only a matter of time before they lose them completely. Funny our congressmen never will lose theirs even after their terms are up.
fjhs3 May 26th 2009 11:21AM
Sounds like the pilots were smarter than the lawyers...and that's a good thing!
Ron May 26th 2009 11:52AM
The methodology may appear a bit unusual , but what they did was to protect what theyhave already earned for themselves and their families.
Humphries May 26th 2009 11:59AM
Believe me the only thing mechanical a woman should be involved with is a device from a novelty store..keep them well away from aircraft..unless they are passengers. end
frank buffington May 26th 2009 12:24PM
If they were lawyers there would be no problem with this. They were just working the system and found the loop holes. The airline can make a promise of pension and back out of it and it is o.k. but if the employee does so look what happens. Good luck Contiental in finding pilots to fly your planes for 20-30 years in the future. Hope your training budget holds up .
Nikki May 26th 2009 12:25PM
I am a lawyer and this article made me wonder if I'm becoming jaded because I honestly think these pilots attempted to protect what was thiers. If looked at another way, why should divorce couples benefit while married couples lose out. If these couples really decided to divorce, this would be a non-issue. T
JOLLY ROGERS May 26th 2009 12:33PM
well, now that the shoe is on the other foot,the airlines chiefs are crying about the pilots circling their gravy trains. three cheers for the pilots,and a big fat stink bomb to the satans of the airline industries.
little by little,the CEOs of other industries in this country are taking,taking and taking all we worked for some much of our adult lives.
not fair to the blue collar workers.
and what does congress do about it ? nothing !!!
FLY THE JOLLY ROGERS !
JOLLY ROGERS May 26th 2009 12:45PM
FLY THE JOLLY ROGERS. FOR THE RECORD,T-H-E-I-R-S IS THE PROPER SPELLING.MS.PERRY MASON.
WE May 26th 2009 1:14PM
THESE PEOPLE ARE ABSURDLY OVERPAID IN THE FIRST PLACE
THROW THEM IN JAIL FOR FRAUD
joseph May 26th 2009 1:25PM
Nothing Bad with what they did. The government is screwijng worse than any madoff or pilots scheme, they are funding rotten bastard banks greedyness!!
Mike May 26th 2009 1:25PM
Hey AJ these pilots are JUST like Madoff!
Lynde May 26th 2009 1:53PM
Geez, a serious airline problem and the proverbial finger-of-blame cannot be pointed at the passengers for a change...how refreshing. I keep a micro-recorder handy just to protect myself from the holier-than-thou attitudes of the flight attendants. Losing one's retirement is indeed sad but the price for fraud is much higher.
BLUESEY May 26th 2009 1:55PM
WHAT ABOUT THE REST OF THE RETIRING AIRLINE EMPLOYEES?
GUESS IT WOULD BE DIFFERENT IF ONE OF US WAS ONE OF THEM...
NO MONEY FOR YOU.............TO BAD........SO SAD
GREEDY BOYS ALREADY CLEANED OUT ALL THE FUNDS....................
SO WHO ARE THE SCUMBALLS.................
THEY AREN'T MINORS LETS HAVE THE NAMES............