News / Final defendant in Polar Air Cargo case pleads guilty before trial begins

Photo: Polar Air Cargo

The final defendant in the Polar Air Cargo corruption case changed his plea to guilty, just days before his trial was due to begin. 

Skye Xu’s company, Sky X Airlines, was contracted by Polar Air Cargo between September 2020 and July 2021, at the height of the pandemic. Sky X offered Polar capacity on charter flights that Mr Xu had secured with passenger aircraft.

But Mr Xu paid kickbacks to Polar executives in order to seal a favourable deal.  

According to documents filed by the US government, Atlas Air – Polar’s 51% shareholder – paid some $46m to Sky X Airlines for capacity. Sky X then paid some $4.3m to four companies, all of which were controlled by Polar executives or family members. 

Some $1.5m each went to COO Lars Winkelbauer and Abilash Kurien, VP marketing, revenue management and network planning, while global senior sales director Frankie Filimaua got $582,000, all via third companies. The government case included a further $850,000, paid to Michael Wang at a company named Banya – although it is unclear what his role was in relation to Polar. 

Other vendors found to have paid kickbacks include forwarder Cargo on Demand, which paid $1.16m to Polar executives, Ultimate Logistics ($8.1m) and Vizion Logistics ($1.5m). Vendors paying ‘commissions’ in the case included truckers, handlers and GSAs. 

Mr Xu is the last of the 12 defendants to plead guilty, but up until last week was still fighting his corner before the trial on Monday.  He has now admitted wire fraud and money laundering. 

His companies Xchange Logistics and Sky X Airlines are not affected by the criminal charges against Mr Xu, and are thought to remain fully operational. 

Mr Winkelbauer, who appeared to be the ringleader of the scheme, received a four-year sentence, while Carlton Llewellyn, former VP operations, system performance and quality for Polar, who played a “mid-level role” in the corruption, got six months in prison and six months’ home detention. Patrick Lau, from forwarder Cargo on Demand, received 18 months’ imprisonment. 

The majority of the sentencing for the remaining executives will take place next year. 

Thomas Betenia, formerly of Lufthansa Cargo and who joined Polar as VP sales & marketing Americas in 2008, was also accused, but is believed to have committed suicide some six months after other executives at Polar Air discovered documents relating to the companies being paid kickbacks, and their ownership. Mr Betenia benefited from the fraud to the tune of about $3.3m, according to court documents. 

One airline executive who had worked with the Polar team told The Loadstar when the corruption was revealed that the case “seriously floored me. But it does clear up why there was that massive clearout at Polar. I tried to understand but no one spoke at all. Very shocking”. 

“But the most shocking to me is that one of the leaders of this appears to be someone I knew very well  – I worked with him and had many beers. I can’t believe it.”