United States of America v. Skye Xu

New York, New York criminal defense lawyer represented the Defendant charged with Paying Millions In Kickbacks

Cargo Airline Operator Sentenced To Two Years In Prison For Paying Millions In Kickbacks In Large-Scale Scheme To Defraud Cargo Airline

SKYE XU was sentenced to two years in prison by U.S. District Judge Jesse M. Furman 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. XU previously pled guilty to conspiracy to commit wire fraud and honest services wire fraud, wire fraud, and conspiracy to commit money laundering.



U.S. Attorney Jay Clayton said: "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. 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 in or about November 2020 through in or about July 2021, 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 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 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. The fraud that XU and his coconspirators perpetrated—which involved a substantial portion of Polar's senior management and at least ten customers and vendors of Polar—led to pervasive corruption of Polar's business, touching nearly every aspect of the company's operations, for over a decade.



XU was the last of 10 defendants charged in this case to be convicted. Five of the 10 charged defendants have previously been sentenced.