Former Polar Air Cargo COO sentenced to 4 years in prison

A former high-ranking executive at Polar Air Cargo was sentenced on Thursday to four years in prison for participating in a scheme to defraud the company of nearly $33 million in revenue over more than a decade, the Department of Justice announced.

Lars Winkelbauer, who was chief operating officer for three years until July 2021 and held various leadership roles at DHL and Polar Air Cargo over a 16-year period, was the biggest fish for prosecutors in a conspiracy that involved nine people. He was arrested in Thailand and extradited to the United States.

“Lars Winkelbauer abused his high-level position at Polar for over a decade, extracting millions of dollars in kickbacks for himself and causing tens of millions of dollars of harm to the company. The substantial sentence imposed today sends an important message: corporate corruption doesn’t pay,” said Damian Williams, the U.S. attorney for the Southern District of New York, in a statement.

Winkelbauer, 48, previously pleaded guilty to conspiracy to commit wire fraud and money laundering. In addition to the prison term, he was sentenced to three years of supervised release, ordered to forfeit $6.7 million and make restitution to Polar Air Cargo for $32.9 million.

The government originally said Polar’s loss was about $52 million, but arrived at a more conservative estimate after discussion with counsel for various defendants charged in the indictment.

Winkelbauer and two other senior executives were charged with accepting kickbacks from a small group of customers and vendors in exchange for favorable contracts, priority cargo loading, favorable shipping rates and enrollment in incentive programs.

The Polar executives also allegedly concealed ownership positions in certain service providers and received ownership distributions based, in large part, on revenue derived from contracts with Polar — contracts that had been secured and, often, renewed largely due to the recommendations of the executives. They pocketed about $23 million in kickback payments or disbursements as a result of their conflicted ownership, according to court documents.

Winkelbauer personally received kickbacks connected to about a dozen vendors or customers totaling more than $6 million. The government said he also attempted to conceal the kickback payments through a sophisticated money laundering scheme, including via falsified invoices and the use of shell companies in China.

Polar Air Cargo is a joint venture between all-cargo airline Atlas Air and parcel delivery giant DHL Express. Atlas Air operates the aircraft. Most of the space is reserved for DHL, which determines the flight network. Atlas markets the rest of the capacity to freight forwarders. The airline has a fleet of eight large Boeing cargo jets, four 747-8s and four 777s, according to aircraft database Planespotters.net. That is down from 15 a year ago.

The only other defendant who has been sentenced in this case is Patrick Lau, who was sentenced to 18 months in prison. He headed freight forwarder Cargo on Demand.

Carlton Llewellyn, 55, a former Polar vice president in charge of operations systems performance and quality, pleaded guilty in January to one count of wire fraud. The count carries a maximum sentence of five years in prison. He also agreed to forfeit $348,000 and repay Polar nearly $306,000. He is scheduled to be sentenced on June 25.

Robert Schirmer, senior director of customer service for the Americas at Polar, pleaded guilty in October. As part of the deal, Schirmer agreed to forfeit more than $938,000 in stolen gains and repay Polar $9.3 million. He is scheduled to be sentenced on July 18.

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Former Polar Air Cargo COO sentenced to 4 years in prison

Fraud conspiracy cost airline $33 million

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Eric Kulisch