$52M Scheme: Highland Mills Resident Among 10 Charged By Feds

Ten people have been charged in connection with a massive scheme to defraud a leading cargo airline based in New York of tens of millions of dollars in revenue and the services of its employees, federal authorities announced. The 10 charged are:

Connecticut resident Abilash Kurien, age 45, of Wilton in Fairfield County;
Hudson Valley resident Carlton Llewellyn, age 55, of Highland Mills in Orange County;
Long Island resident Robert Schirmer, age 58, of Port Jefferson Station;
Queens resident Patrick Lau, 43, of Flushing;
Lars Winkelbauer, age 47, of Bangkok, Thailand;
Skye Xu, age 40, of West Covina, California;
Benjamin Wei, age 58, of San Marino, California;
Alvaro Lopez, age 50, of Aventura, Florida;
Fabiola Cino, age 45, of Aventura, Florida;
Orlando Wong, 60, of Manhattan Beach, California.

Nine of the 10 were arrested on Wednesday, April 12. Xu remains at large said prosecutors from the Department of Justice.

“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 £52 million in losses,” said US Attorney for the Southern District of New York Damian Williams. “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 favor of lining their own pockets. ” Their pervasive fraud ends today, and each defendant now faces substantial prison time for their alleged crimes.” Polar Air Cargo Worldwide’s headquarters is in Harrison in Westchester County.

As alleged in the Indictment: From around 2009 to July 2021, the 10 participated in a massive scheme to defraud Polar. Winkelbauer, Kurien, Llewellyn, and Schirmer were senior executives of Polar.

Xu, Wei, Lopez, Cino, Wong, and Lau owned and operated various Polar vendors and customers. 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 favorable 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.

Polar’s business involved numerous outside vendors and customers. Polar relied heavily on third-party, general sales agents in the United States to sell cargo space on its planes. In turn, the GSAs hired by Polar often sold available cargo space to freight forwarding vendors, which had been hired by downstream customers to coordinate transportation logistics for large quantities of goods.

Polar also contracted with ground handling vendors to load and unload cargo and with trucking vendors to transport cargo from domestic locations to the appropriate airports. In addition, Polar contracted with other partners for a variety of business reasons, including securing cargo space on airline routes not serviced by Polar flights. The scheme to defraud Polar touched on each aspect of these operations.

To conceal the kickbacks and conflicted ownership interests from Polar, and to continue the fraud scheme, Winkelbauer, Kurien, Llewellyn, and Schirmer often directed the kickbacks and ownership distributions be paid to limited liability companies with non-descript names that they, in fact, controlled. As a result of the scheme, the executive defendants, along with two co-conspirators who also worked as senior executives at Polar, received unlawful payments, either directly or through various limited liability companies they controlled, in excess of approximately £23 million in kickback payments or disbursements received as a result of their ownership of conflicted companies. Additionally, a financial analysis conducted at Polar’s direction estimates that, as a result of the fraudulent scheme, Polar suffered at least approximately £52 million in losses between in or about 2009 and in or about July 2021.

In the Summer of 2021, Polar discovered documentary evidence of the conflicted ownership arrangements and kickback agreements. Shortly thereafter, Polar terminated the employment of Winkelbauer, Kurien, Llewellyn, and Schirmer and reported the conduct to law enforcement authorities. Polar has continued to cooperate with law enforcement authorities through the investigation.

All 10 have been charged with:

One count of conspiracy to commit wire fraud and honest services wire fraud, which carries a maximum sentence of 20 years in prison;
One count of wire fraud, which carries a maximum sentence of 20 years in prison;
One count of conspiracy to commit money laundering, which carries a maximum sentence of 20 years in prison.

Winkelbauer, Kurien, Llewellyn, and Schirmer are also charged with:

One count of honest services wire fraud, which carries a maximum sentence of 20 years in prison.

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