One private jet charter operator force posted nine transactions for more than $440,000 over a span of over five weeks while another posted fraudulent charges more than three months apart
In the recent indictment against private jet charter broker Tomer (Tom) Osovitzki covering his tenure as CEO of Jetlux, the names of all of his alleged victims, including 15 different private jet charter operators and at least one National Basketball Association team were redacted.
While indictments often redact names to protect victims, they also redact names of persons or organizations that may still be under investigation and could be subject to future charges.
Was there collusion?
After publishing our report on the indictment on Aug. 27, one reader pointed out what he believes are signs of possible collusion with the companies being scammed.
To perpetrate over $2 million in fraudulent charges, Osovitzki and associates allegedly provided vendors authorization codes they made up. They then urged the merchants to use the codes to “force post” millions in charges, it is alleged.
Somewhat typically, a number of charges for private jet charters were split up, including several that were on the same day or multiple days. However, this observer pointed to what he said appeared to be a series of unusual charges.
Nine charges to one private jet operator in over 5 weeks
Aircraft Charter Company – 9 as it is referred to, processed nine forced post charges. The first was on Oct. 6, 2017, for $73,500. The next was 13 days later for $15,225. Two weeks later on Nov. 3, it processed another charge from JetLux for $67,200. There were then charges processed by Charter Operator 9 on Nov. 6, 8, 11, 13, and two final charges on the 14th for $56,800 and $67,200. Analyzing the charges processed by Aircraft Charter Company – 9 shows there were 39 days between the first and last “force post” charges.
Company 12 made only two charges, although they were more than 100 days apart. The first fraudulent charge was made Nov. 4, 2017, for $28,080 with a second forced post charge for $43,160 on Feb. 16, 2018.
While it’s not clear if there was more than one NBA team, there were 11 charges between $25,000 and $50,000, and the dates of the charges ranged from March 31, 2017, until Feb. 9, 2018, a period of over 11 months.
On the other hand, of the charter operators who processed more than one forced post charge, there was a three-day gap between the first and last charges by redacted Operator Number 3. For Operator Number 8 the gap was six days. The two charges by Company 10 were five days apart, the same as Private Jet Company 11. There was a nine-.day gap between the two charges by Private Jet Operator Number 13. There was an 11-day gap between the two charges made by Jet Company 14.
Did the private jet operators know?
Why would somebody continue to force post charges from the same person more than five weeks after getting scammed?
Part of the reason could be the answer to another question. How long does it take for a merchant to find out somebody cajoled them into processing a fraudulent charge?
The answer is it could be longer than you might think. It seems Osovitzki may have exploited weaknesses in high-tech fraud prevention systems with low-tech fakery.
The indictment alleges that Osovitzki simply made up authorization codes and when the initial transactions didn’t go through he and associates then told the merchants to use authorization codes they claimed were from the institution that issued the declined payment card. By force posting the made-up codes, the transaction went through.
One payment systems expert we talked to said part of the problem was the private jet charter operators. “The merchant should not have forced posted these transactions. They should have obtained an authorization from the issuer approving the transactions,” he told us.
While you may be used to getting alerts within minutes of suspect transactions on your payment cards, another expert said, “(Notification timing) depends on when the Issuer identified the force posted transactions and submitted a chargeback, which goes to the acquirer, who in turn would notify the merchant. The Issuer has 60 days to report the transaction as fraud and chargeback.”
In other words, it could take more than two months for one of the private jet operators to learn any of the JetLux charges were fraudulent.
It’s not clear if the operators were paid, although two charter brokers speculated they would not have made the flights unless they had received funds. It’s also possible they received chargebacks later on.
Kardashians sued by private jet charter operator
One charter operator, California-based Silver Air, sued JetLux, Kim and Khloe Kardashian in May 2018 for unpaid private jet flights, according to TMZ. Silver Air didn’t respond to a request for comment, and it could not be ascertained if those flights were connected to Osovitzki’s indictment. One report suggests the Kardashians had paid JetLux.
Other explanations for why an operator or other merchants would continue to force post charges from JetLux include that JetLux could have paid via wire to bring its account up-to-date, and then cajoled the operator to do another force post.
It’s also possible in the case of bigger companies, Osovitzki targeted different employees at the vendor for the force post transactions, or perhaps there was turnover, so while it was the same company, the contact had changed and wasn’t aware of the previous attempts at fraud investigators allege.
One of the payment system experts said he could not tell what role the vendors played in the alleged Osovitzki scheme, although he added, “If the merchant was force posting, they facilitated the activity but, it’s hard to say if they knew or they were a victim of the cardholders who committed the fraud.”
An FBI agent who signed the complaint did not return a phone call requesting comment. A person who identified himself as Yair Osovitzki, who co-signed the bail agreement for Tomer Osovitzki answered a phone number we obtained and said he would pass a message, but there was no further response. A Denver-based lawyer who was also listed on the bail agreement as representing Osovitzki did not respond to a request for comment.
For what it’s worth, Osovitzki served as CEO of CTMS, a corporate travel agency, from June 2008 until Oct. 2017. On April 1, 2015, CTMS signed a partnership with the NBA’s Sacramento Kings. On Dec. 1, 2015, it signed a three-year partnership with the Dallas Mavericks. In February 2016, CTMS Travel Group said it had inked a three-year sponsorship deal with the Miami Heat. It’s not known whether any of the three NBA teams are redacted in the indictment.
Also, not clear is who was flying on the flights Osovitzki was chartering. Two brokers said they were familiar with JetLux via customers who would cite them as providing below-market quotes. The theory being that JetLux would offer charter customers below-market prices for flights, and then pay market rates via the fraudulent force posts.