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Question: Gayle Schreier, a travel agent, had access to the computer reservation system of American Airlines (American). American's frequent flyer program, called AAdvantage, allowed American's passengers who join the program to accumulate mileage credits. When enough credits were accumulated, American issued coupons that could be used to acquire free tickets for American flights. Passengers who were not members of AAdvantage could also receive mileage credits if they signed up for the program within a 24 hour claim period following their flights. Gayle devised a scheme by which she could take advantage of mileage credits that were not claimed by American's passengers. She enrolled a fictitious person, G. Johnson, in the AAdvantage program.
Then she accessed the computer system to replace the name of actual passengers who had made particular flights with that of G. Johnson. AAdvantage issued coupons to G. Johnson and sent them to G. Johnson's address, which Gayle had provided. Eventually, these coupons were exchanged for tickets and used. In no case did Gayle use mileage credits that any passenger of American had claimed. In light of the fact that she was not depriving any passenger of mileage credits, and putting aside for now the issue of whether she violated any law, did Gayle act wrongfully from an ethical point of view? Why or why not?
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Advise what tax consequences arise in respect of the payments.
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