Increasing scrutiny could stall rise of ecommerce platforms, as TikTok faces US ban
The Loadstar has launched a series of reports on the ecommerce sector, which has been driving growth ...
© Vchalup |
By Alex Lennane
A second executive accused of conspiracy and being part of the Polar Air Cargo fraud looks set to plead guilty.
The case centres on claims that Polar was defrauded by tens of millions of dollars over a decade.
Benjamin Wei yesterday entered a waiver of indictment, a move made before a ‘guilty’ admission, telling the court he wanted to change his plea.
Mr Wei did not work for Polar, he owned GSA Griffin Cargo and forwarder Vizion Logistics. According to the case, between 2003 and 2021, Polar used Griffin to sell its domestic cargo space.
In 2012, Polar defendants “entered into an agreement with [Mr] Wei and others to accept kickbacks in exchange for awarding Griffin – already Polar’s GSA for the Pacific north-west – a contract to represent Polar in the north-east and Texas”.
It was said: “More specifically, [Mr] Wei agreed to pay [some Polar defendants] a percentage of Griffin’s net profits derived from its contracts with Polar on approximately a monthly basis. In total, [Mr] Wei and others directed payment of at least approximately $3m from profits derived from Polar to limited liability companies controlled by [Polar defendants].”
Mr Wei is also accused of approaching Polar executives, via his company Vizion, to accept kickbacks in exchange for favourable cargo rates and preferred allocation. The kickbacks were “typically calculated based on how many kilograms of cargo the freight forwarders had shipped with Polar during a particular period”. Vizion and Able Freight, another forwarder, paid at least $1.66m in kickbacks, it is alleged.
Of the 10 accused in the case, four worked for Polar and six for GSAs or forwarders.
Mr Wei is the second defendant to change his plea: Robert Schirmer, Polar’s former senior director of customer service and capacity for the Americas, last month admitted one count of conspiring to commit wire fraud, which carries a maximum sentence of five years in prison. He must also pay a forfeiture of nearly $1m and pay Polar $9m in restitution.
The court proceedings claim executives trousered some $23m of kickbacks.
The alleged fraud was discovered when one of the forwarders, Cargo on Demand (CoD), sued Polar, in essence for ending the scheme, claiming it had been ditched as a customer by the carrier despite making large payments.
However, it didn’t work out well for CoD; not only was the case dismissed, but its executive, Patrick Lau, is now a defendant in this case. Another Griffin employee, Alvaro Lopez, accused of facilitating the payment of the kickbacks in his capacity as a salesman at Griffin, is also a named defendant.
The court has set 18 January as the deadline for the defence, with the trial date set for 28 October 2024.
Polar, owned by Atlas Air and DHL, has claimed throughout the case that it had no knowledge of the decade-long fraud at the time, begging the question of how well managed Polar was by its shareholders.
Comment on this article