The Attorney’s Office of the Southern District of New York has arrested nine individuals accusing them of having defrauded Polar Air Cargo from 2009 until at least mid-July 2021 and costing the carrier at least USD 52 million. Four of them, Lars Winkelbauer, Abilash Kurien, Carlton Llewellyn, and Robert Schirmer, were senior executives of Polar Air. The others, Skye Xu, Benjamin Wei, Alvaro Lopez, Fabiola Cino, Orlando Wong, and Patrick Lau, owned and operated various Polar vendors and customers.
Nine of the ten defendants have now been arrested on the spot with Winkelbauer pending extradition from Thailand and Skye Xu remaining at large.
U.S. Attorney Damian Williams said: “As alleged, the 10 defendants charged conducted a widespread scheme that tainted nearly every aspect of Polar Air Cargo Worldwide’s operations, and that cost the company an estimated USD 52 million in losses. The defendants showed a blatant disregard for the integrity of their companies in favor of lining their own pockets. Their pervasive fraud has ended, and each defendant now faces substantial prison time for their alleged crimes.”
FBI Assistant Director, Michael J. Driscoll added to this: “For more than a decade, the defendants allegedly utilized a complex set of schemes at the expense of Polar Air to line their own pockets. The indictments today serve as a reminder to any unscrupulous actors attempting complex frauds – the FBI will hold you accountable in the criminal justice system.”
Large network of scammers
The fraud they perpetrated - which involved a substantial portion of Polar’s senior management and at least 10 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.
Polar’s business involved numerous outside vendors and customers. The DHL affiliate relied heavily on third-party, general sales agents (GSAs) in the United States to sell the transport capacity on its planes. In turn, the GSAs hired by Polar often sold available cargo space to freight forwarding vendors, which had been hired by downstream customers to coordinate transportation logistics for large quantities of goods. Polar also contracted with ground handling vendors to load and unload cargo, and with trucking vendors to transport cargo from domestic locations to the appropriate airports.
Tainted operations throughout
In addition, Polar contracted with other partners for a variety of business reasons, including to secure capacity on airline routes not served by Polar’s own fleet. The scheme to defraud Polar touched on each aspect of these operations, claims the Attorney’s Office of New York’s Southern District.
Unbeknownst to Polar, the Executive Defendants utilized their positions within Polar to secure, among other things, favorable contracts, valuable cargo space, favorable shipping rates, and enrollment in various incentive programs for the Vendor Defendants and their entities. In return, the Vendor Defendants paid the Executive Defendants kickbacks in various forms, including, for example, in payments calculated per kilo of cargo shipped with Polar or as a percentage of the revenue earned as a result of a vendor’s relationship with Polar.
Two of the suspects, Abilash Kurien and Robert Schirmer, worked for Lufthansa Cargo for some time before switching to Polar. There, Mr. Kurien had already attracted the attention of the company's management with windy deals, so he got fired. "I never thought that Robert Schirmer, the former LH Cargo Terminal Manager at JFK Airport, would become a criminal if the accusations against him were substantiated. He always did his job correctly and there was never any cause for complaints or criticism," recalls a former high-ranking executive of the carrier when approached by CargoForwarder Global.
Mafia-like communication strategies
To conceal the kickbacks and conflicted ownership interests from Polar, and thereby to continue the fraud scheme, Winkelbauer, Kurien, Llewellyn, and Schirmer often directed the kickbacks and ownership distributions be paid to limited liability companies with non-descript names that they, in fact, controlled. Additionally, the Executive Defendants communicated amongst themselves and with the Vendor Defendants about the scheme primarily using personal email accounts, while the Vendor Defendants conducted official Polar business with the Executive Defendants primarily using their professional email accounts.
… innocent until proven guilty
In the Summer of 2021, Polar discovered documentary evidence of the conflicted ownership arrangements and kickback agreements. Shortly thereafter, Polar terminated the employment of Winkelbauer, Kurien, Llewellyn, and Schirmer, and reported the conduct to law enforcement authorities. Polar has continued to cooperate with law enforcement authorities through the investigation.
The case is being prosecuted by the Office’s Complex Frauds and Cybercrime Unit. The charges contained in the Indictment are merely accusations, and the defendants are presumed innocent unless and until proven guilty.
In 2006, DHL became a 49% shareholder of Polar Air Cargo. Currently, the freight carrier operates a fleet of 18 large cargo aircraft: six B747-8F, four B767-300ERF, and eight B777F.
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