Part one of a three-part series on this topic.
It started on a Friday afternoon in a snow storm that closed the airports. With little to do, the dozen or so employees of All About Travel were shooting the breeze when a certain name came up—and agency owner Karen Schroedermeier pulled up his website to check him out. Imagine her surprise when she saw a posting there from one of her own agents, saying how great it was to be working for a certain guy at a certain host agency (whose lawyer has advised us not use its name, as this "could cause real and significant harm to his reputation in the travel community").
It’s an old story, and every agent with whom TMR has spoken in the past couple of days has added a tale about an employee who diverted agency bookings and rebooked them under an independent-contractor number.
None that we know of took it as far as Schroedermeier, though, who had the police waiting when Melissa Kaye Sutton returned to the office from vacation on November 23, 2015. “I terminated her on the spot, and the investigation went to the State Attorney, who charged her with two counts of Grand Theft, Grand Theft by deception and Grand Theft by diverting services.” She was subsequently released on a $2,525 bond.
In all, says Schroedermeier, Sutton diverted bookings from 39 clients, worth about $250,000, and rebooked them through Travel Troops, causing All About Travel to lose $25,000 in commissions, between July and September of 2015. (Schumacher has not been charged with any crime.)
On February 22, 2017, “the above-mentioned Defendant pleaded guilty to Grand Theft,” a Class 4 felony, say the court papers from the Minnehaha County Office of the State’s Attorney, in the case of the State of South Dakota vs. Melissa Kaye Sutton. The Defendant “did obtain property of another, namely, All About Travel, Inc., by deception, in that the Defendant failed to correct a false impression which she previously created or reinforced, or which she knew to be influencing another to whom she stood in a fiduciary or confidential relationship…against the peace and dignity of the State of South Dakota.”
Sutton has agreed to full restitution of $25,271.43, payable as $8,000 down and then $350 a month for the next five years or so, Schroedermeier said. (She also noted that she has E&O insurance, but it does not cover this. She has since learned that insurance coverage is available.) Meanwhile, Sutton’s Facebook page on Friday listed her as “owner/operator of Toes in the Sand Travel,” an agency that has its own Facebook page and website, with no reference to All About Travel.
A troubling issue in the industry
The Sutton case is unique in the extent of the theft involved, and the fact that the agency owner followed through and prosecuted. That was a hard decision, Schroedermeier said, that followed a long weekend of soul searching. “It’s a hard thing to have to do, but there was never a question for me about going forward. I got my mind around it that first weekend, and I know I am doing it for what I feel are the right reasons. It’s important to me and to all my employees. When you have something like that happen in the small environment of a travel agency, it’s very hurtful.”
And while she feels some sympathy for Sutton even now, “I want to make sure people know this is what can happen to them, that it is being punished, that it’s very serious. It’s not a $100 fine; she is facing jail time and has a felony on her record.”
Schroedermeier told TMR that what surprises her most is that “when I’m around other owners and talk about this, I haven’t found one person who has pressed charges, though I’d say probably 30 people have told me they had a similar situation. I just hope no one else has to go through what I have gone through, it’s all a very new and difficult experience for me.”
Indeed, Sandy Anderson, owner of Riverdale Travel Leaders in Coon Rapids, MN, still regrets not pressing charges when the same thing happened to her many years ago. She did call the police when she discovered an agent had rebooked about $50,000 worth of business as an independent contractor through a host agency, but in the end Anderson let it go and moved on. Now, she says, “it’s a really large problem in Minnesota and South Dakota. It’s exciting that there are so many new people and new types of agencies, but these agents are young and not very experienced.”
At Travel Quest in Albertville, MN, CEO Bonnie Lee also “totally feels her pain. It’s so hard for agents who want to go out on their own, the waters get so muddy about whose clients are whom.”
When she caught an agent booking a customer through a host agency while actually sitting in the office, Lee let that one slide, too. “She said she wanted to be an independent agent and earn 100% of the commission and I said no and that was it. But looking back 10 years out I do wish I had said, ‘Hey let’s sit down and see if we can hash this out and make it work for both of us. Let’s have a clear agreement about the boundaries.’ Maybe that would have been a better scenario for both of us. I know I certainly would have felt better if I had tried.”
TMR reached out to Sutton for a comment; she said, “I certainly want my side of the story to be told – because as we all know there are two sides to everything. My lawyer has advised me not to discuss the situation until after May 16th when my legal matters should all be resolved.”
Travel Troops had no comment.
Stay tuned as this story continues, with more details and some interesting lessons learned on how to protect your agency. Or your reputation.
If you have a story to share, please email Cheryl at email@example.com, on or off the record.