Former Polar Air Cargo Executive Sentenced to 2 Years in Prison for $32 Million Defrauding Scheme

Strategic Insights -

The United States Attorney for the Southern District of New York, Jay Clayton, announced that Skye Xu was sentenced to two years in prison for his part in a scheme to defraud Polar Air Cargo Worldwide, Inc. of more than $32 million in revenue. Xu previously pled guilty to conspiracy to commit wire fraud and honest services wire fraud, wire fraud, and conspiracy to commit money laundering. During the COVID-19 pandemic, Xu paid approximately $4.4 million in kickbacks to Polar executives to obtain lucrative business from the airline.

Key Takeaways:

  • Skye Xu was sentenced to two years in prison for his part in a scheme to defraud Polar Air Cargo Worldwide, Inc. of more than $32 million in revenue.
  • Xu paid approximately $4.4 million in kickbacks to Polar executives to obtain highly lucrative business from the airline.
  • The scheme involved a substantial portion of Polar's senior management and at least ten customers and vendors of Polar.
  • Xu was the last of 10 defendants charged in this case to be convicted, with five of the 10 charged defendants previously sentenced.
  • The case involved pervasive corruption of Polar's business, touching nearly every aspect of the company's operations, for over a decade.
  • In addition to the prison term, Xu was sentenced to three years of supervised release, ordered to forfeit $4,487,830, and to make restitution to Polar in the amount of $1,390,000.
  • U.S. Attorney Jay Clayton praised the outstanding work of the Federal Bureau of Investigation and the Internal Revenue Service -- Criminal Investigations.
  • The case is being prosecuted by the Office's Complex Frauds and Cybercrime Unit, with Assistant U.S. Attorneys Danielle Kudla, Kevin Mead, Qais Ghafary, and Jerry J. Fang in charge of the prosecution.

Statistics:

  • Skye Xu paid approximately $4.4 million in kickbacks to Polar executives.
  • The scheme earned Xu and his cargo airline approximately $46 million in gross revenue and nearly $10 million in net revenue based on the sales of unused space on passenger airlines to transport cargo during the COVID-19 pandemic.
  • The approximately $4.4 million in kickbacks were part of more than $20 million in kickbacks and other financial benefits that the Executive Defendants and other co-conspirators received from certain Polar customers and vendors from at least 2009 to at least 2021.
  • Xu was sentenced to three years of supervised release.
  • Xu was ordered to forfeit $4,487,830 and to make restitution to Polar in the amount of $1,390,000.

Sources:

  • Office of United States Attorneys
  • Office of United States Attorneys Jay Clayton
  • Polar Air Cargo Worldwide, Inc.
  • Federal Bureau of Investigation
  • Internal Revenue Service -- Criminal Investigations
  • Contify.com