Defendant Skye Xu, 43, of West Covina, California, was sentenced to two years in prison for his part in a scheme to defraud Polar Air Cargo Worldwide, Inc. (“Polar”), a leading cargo airline, of more than $32 million dollars in revenue.
U.S. Attorney Jay Clayton announced the sentencing, stating that during the COVID-19 pandemic, Skye Xu paid approximately $4.4 million in kickbacks to Polar executives to obtain highly lucrative business from Polar. The Polar executives concealed the kickbacks from Polar using shell companies.
Corruption of this type has costs that extend way beyond Polar’s or any one company’s bottom line, Clayton said. Today’s sentence should be a reminder that commercial bribery has no place in America.
According to the charging documents and other public filings and statements made in public court proceedings, from at least November 2020 through July 2021, Skye Xu operated Sky X Airlines, LLC, a cargo airline company based in California. During those nine months, and without Polar’s knowledge, Xu paid approximately $4.4 million in kickbacks to shell companies controlled by three senior executives of Polar (the “Executive Defendants”) in exchange for two lucrative business contracts with Polar.
These fraudulently obtained contracts earned Skye 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 that Skye Xu paid to the Executive Defendants in a nine-month span was 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 in exchange for ensuring that those vendors and customers received favorable business arrangements with Polar.
In addition to the prison term, Skye Xu was sentenced to three years of supervised release. He was also ordered to forfeit $4,487,830 and to make restitution to Polar in the amount of $1,390,000.
The case is being prosecuted by the Office’s Complex Frauds and Cybercrime Unit. Assistant U.S. Attorneys Danielle Kudla, Kevin Mead, Qais Ghafary, and Jerry J. Fang are in charge of the prosecution.
Mr. Clayton praised the outstanding work of the Federal Bureau of Investigation and the Internal Revenue Service – Criminal Investigations.
Key Facts
- State: New York
- Category: White Collar Crime
- Source: DOJ Press Release â†â€â€
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