Skye Xu Sentenced to Two Years in Polar Air Cargo Fraud Case

The Polar Air Cargo fraud case has reached its final sentencing among 10 defendants: Skye Xu received a two-year prison term for paying about $4.4 million in kickbacks to secure Polar business. The contracts generated roughly $46 million in gross revenue for Xu’s Sky X Airlines, which sold unused space on passenger flights to move cargo during the COVID-19 pandemic.

Xu was also sentenced to three years of supervised release, ordered to forfeit more than $4.4 million and directed to pay Polar $1.39 million in restitution. The sentence was announced May 15 by the US Attorney’s Office for the Southern District of New York.

Contracts and kickbacks

From about November 2020 through July 2021, Xu operated Sky X Airlines, a California-based cargo airline. Court evidence showed that he paid about $4.4 million to shell companies controlled by three senior Polar executives. Polar did not know about the payments, which were made in exchange for two lucrative business contracts.

The contracts involved selling unused capacity on passenger airlines for cargo transport. At the height of the pandemic, passenger schedules and available cargo space were changing sharply. In this case, the arrangement produced about $46 million in gross revenue and nearly $10 million in net revenue for Xu and Sky X, according to the attorney’s office.

The scale of the revenue helps explain the commercial stakes of the scheme: access to Polar business gave Xu a route to sell capacity across passenger airlines, while the executives allegedly concealed their financial interests through shell companies. The source does not specify the routes, shipment types or individual contract terms, so the reported figures describe the overall business generated by the two agreements.

Xu initially pleaded not guilty and was scheduled to stand trial on Oct. 28 last year. He later pleaded guilty to conspiracy to commit wire fraud and honest services wire fraud, wire fraud, and conspiracy to commit money laundering.

Broader payments described in the case

The $4.4 million tied to Xu’s payments was part of a larger pattern described in the case. From at least 2009 through at least 2021, Polar executives and other co-conspirators received more than $20 million in kickbacks and other financial benefits from certain Polar customers and vendors. Those payments were exchanged for favorable business arrangements with the cargo carrier, according to the attorney’s office.

That longer period places Xu’s nine-month arrangement within a wider set of alleged transactions involving Polar business relationships. The account does not break down the total by customer, vendor or year, or identify the value of the other arrangements. It does say that payments went to executives through shell companies, a mechanism that concealed the kickbacks from Polar.

In remarks about Xu’s sentence, Jay Clayton, then the US attorney for the Southern District of New York, said Xu paid approximately $4.4 million to Polar executives during the pandemic to obtain lucrative business. Clayton said the executives used shell companies to conceal the payments and described the consequences as reaching beyond Polar’s own finances. He added that the sentence should serve as a reminder that commercial bribery has no place in the United States.

Sentencing and company context

Xu was the last of the 10 defendants charged in the scheme to be sentenced. Five had already received sentences, including former Polar chief operating officer Lars Winkelbauer, who was sentenced to four years in prison in May last year. The source does not provide sentencing details for the other defendants.

The case arrives as Polar’s ownership structure is set to change. In February, Atlas Air Worldwide and DHL said they would close their joint venture, Polar, after 17 years, describing it as no longer a strategic business interest. They did not confirm a closure date.

Polar senior vice president and chief management officer Kersti Krepp said last April that the business had moved on from the fraud case and had put a strong company culture in place. The announced joint venture closure adds a separate change for the carrier’s operations, though no link between the closure and Xu’s case was reported.

For cargo customers and vendors, the case’s operational lesson is specific: contracts and capacity arrangements can carry significant value, and undisclosed payments to decision-makers can compromise how those opportunities are awarded. The sentence closes the proceedings against the 10 defendants described in the case, while the timing of Polar’s planned closure remains unconfirmed.