Jay Clayton, the United States Attorney for the Southern District of New York, announced that Skye Xu has been sentenced to two years in prison. U.S. District Judge Jesse M. Furman handed down the sentence due to Xu's involvement in a scheme that defrauded Polar Air Cargo Worldwide, Inc., a major cargo airline, out of over $32 million. Xu had previously admitted guilt to charges including conspiracy to commit wire fraud and money laundering.
U.S. Attorney Jay Clayton stated: "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."
From November 2020 through July 2021, Xu operated Sky X Airlines, LLC, based in California. During this period, he paid $4.4 million in kickbacks to shell companies managed by three senior executives at Polar (referred to as the "Executive Defendants"). These payments secured two valuable contracts with Polar, resulting in $46 million gross revenue and nearly $10 million net revenue for his airline by selling unused space on passenger airlines during the pandemic.
The $4.4 million paid by Xu was part of over $20 million in kickbacks received by the Executive Defendants and other co-conspirators since at least 2009 from certain customers and vendors of Polar for favorable business deals. This fraudulent activity involved a significant portion of Polar's senior management and affected many aspects of its operations over more than ten years.
Xu is the last among ten defendants charged in this case to be convicted; five have already been sentenced.
In addition to his prison term, Xu, aged 43 from West Covina, California, will undergo three years of supervised release and must forfeit $4,487,830 while making restitution to Polar amounting to $1,390,000.
Clayton commended the efforts of the Federal Bureau of Investigation and Internal Revenue Service – Criminal Investigations.
The prosecution is being handled by the Office's Complex Frauds and Cybercrime Unit with Assistant U.S. Attorneys Danielle Kudla, Kevin Mead, Qais Ghafary, and Jerry J. Fang leading the case.