Ten people have been charged with a decade-long, multi-million dollar scheme to defraud Polar Air Cargo Worldwide, Inc. (Polar).
The US Department of Justice (DoJ) said senior Executives of Polar "engaged in criminal conduct that led to pervasive corruption of nearly every aspect of the company's operations."
US$52 million in losses cited
"As alleged, the 10 defendants charged today conducted a widespread scheme that tainted nearly every aspect of Polar Air Cargo Worldwide's operations and that cost the company an estimated US$52 million in losses," said U.S. Attorney Damian Williams, in a statement released on April 12.
Williams added that the defendants — all of whom were either employed in high-level positions by Polar or were vendors reliant on business arrangements with Polar — "allegedly showed a blatant disregard for the integrity of their companies in favour of lining their own pockets."
"Their pervasive fraud ends today, and each defendant now faces substantial prison time for their alleged crimes," the U.S. attorney added.
The United States Attorney for the Southern District of New York, the Federal Bureau of Investigation (FBI) and the Internal Revenue Service (IRS) have cooperated to charge the 10 individuals with fraud.
Atlas Air Worldwide Holdings, the parent company of Polar, is based in New York.
The indictment alleged that from at least in or about 2009 through or about July 2021, the defendants — which have all been named by the DoJ — participated in a "massive scheme to defraud Polar."
It added that the executive defendants agreed to accept millions of dollars in kickbacks from the vendor defendants and also reaped substantial financial benefits as a result of their secret ownership interests in certain Polar vendors, in exchange for ensuring that those vendors received favourable business arrangements with Polar.
"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," the statement further said.
The scheme to defraud Polar touched on each aspect of these operations and corrupted Polar's relationships with GSAs, freight forwarders, and other vendors, including those providing ground handling and trucking services.
Nine arrested, and one remains at large
Michael J. Driscoll, FBI assistant director, said 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," he added.
IRS-CI Special Agent in Charge Thomas Fattorusso, for his part, said: "Today's charges are the opening salvo against a decade-long scam by a small group of Polar's executives and others that allegedly tainted every aspect of its business operations."
"These arrests and charges today will hopefully begin the process of righting the alleged wrongs of those charged and put the company on a path to integrity, which its hardworking employees and legitimate customers deserve," Fattorusso added.
The US DoJ noted that eight of the 10 defendants are presenting in federal court. The ninth has been arrested in Thailand and is pending extradition to the US, while the tenth remains at large.
