Back in May, Continental Airlines sued nine pilots for getting sham divorces
. The marital splits were part of a play for pension benefits, with the “ex” collecting while the pilot keeps earning. It’s good cash if you can find it, but Continental
wasn’t thrilled at having to bear that extra cost. On Monday, a federal judge
told the airline to live with it, ruling in favor of the pilots. Regardless of the pilots’ intentions, the judge said there wasn’t anything that would let him rule in favor of the airline.
Continental is considering an appeal, which makes sense given the money involved. The airline paid between $10 million and $11 million in pension distributions to the nine pilots, with some individual payments reaching as high as $900,000. In some cases, the spouses remarried after the check cleared.
Well, $11 million … do you know how many bags of
peanuts pretzels that buys?
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: