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DOJ charges 10 with fraud in global air freight kickback scheme

aircargonews.net

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Re: DOJ charges 10 with fraud in global air freight kickback scheme

#41

Post by tyingq »

tedivm wrote: post #10
A_D_E_P_T wrote: post #6

The article doesn't make it clear what the crime actually was. I got curious, so I dug up some more details: https://archive.ph/gvYFE And the indictment is here: https://www.justice.gov/usao-sdny/press-release/file/1579271... Long story short, the indicted executives had fly-by-night LLCs that they used to accept payments from Polar Freight clients for preferential service. (Or for access to Polar Freight's shipping…

"Paying the consulting fee" is just another way of saying "bribing people". The vendor got value out of that bribe, which is why they were willing to pay it.

Maybe? There are many companies and consultants that take payment from you and then negotiate across different shippers, mortgage companies, insurance companies, car dealerships, and so on. It's plausible someone could have paid a middleman and not known there were bribes involved.

Re: DOJ charges 10 with fraud in global air freight kickback scheme

#42

Post by SoftTalker »

tyingq wrote: post #41
tedivm wrote: post #10

Earlier quoted context omitted.

"Paying the consulting fee" is just another way of saying "bribing people". The vendor got value out of that bribe, which is why they were willing to pay it.

Maybe? There are many companies and consultants that take payment from you and then negotiate across different shippers, mortgage companies, insurance companies, car dealerships, and so on. It's plausible someone could have paid a middleman and not known there were bribes involved.

Presumably the investigators determined that the people paying the "consultants" knew full well what was going on and were complicit in the scam.

But I'm sure their lawyers will try to claim that they were just duped.

Re: DOJ charges 10 with fraud in global air freight kickback scheme

#43

Post by jacquesm »

slavboj wrote: post #12
pc86 wrote: post #8

Earlier quoted context omitted.

> The kicker is that some poor bastard was indicted for paying the "consulting" fee! I mean the system works best if people on both sides of the equation are punished, right?

It aligns incentives on both sides to keep the scheme secret.

If you want to keep something secret don't send invoices.

Re: DOJ charges 10 with fraud in global air freight kickback scheme

#44

Post by jacquesm »

Wowfunhappy wrote: post #37
doryWalnut wrote: post #7

Earlier quoted context omitted.

[flagged]

It should be noted that this isn't normal! He may get away with it because he's a supreme court justice, our supreme court sucks right now, and our constitution provides insufficient checks on the supreme court's power. But there's a reason Pro Publica did an exposé.

> He may get away with it because he's a supreme court justice

That would be a massive blow against the system.

Re: DOJ charges 10 with fraud in global air freight kickback scheme

#45

Post by skybrian »

idopmstuff wrote: post #2

From what I've heard about a lot of global freight contracting, it seems like there's a lot of favoritism - with ocean freight, for example, when ships are packed, you're not getting your shipments onto them unless you have good relationships with the carriers/brokers/other folks in the chain who can make it happen for you. I suppose blatantly taking kickbacks crosses the line, but it definitely seems like an industr…

Customers want to pay more for better service. Seems like this will eventually be rationalized and done officially and impersonally, like paying more for overnight package delivery?

Re: DOJ charges 10 with fraud in global air freight kickback scheme

#46

Post by Wowfunhappy »

jacquesm wrote: post #44
Wowfunhappy wrote: post #37

Earlier quoted context omitted.

It should be noted that this isn't normal! He may get away with it because he's a supreme court justice, our supreme court sucks right now, and our constitution provides insufficient checks on the supreme court's power. But there's a reason Pro Publica did an exposé.

> He may get away with it because he's a supreme court justice That would be a massive blow against the system.

I agree!

Re: DOJ charges 10 with fraud in global air freight kickback scheme

#47

Post by fastball »

babyshake wrote: post #18
PragmaticPulp wrote: post #9

Earlier quoted context omitted.

> The kicker is that some poor bastard was indicted for paying the "consulting" fee! Can you point me to where I can read more about that? I'm assuming the indicted person knew exactly what he was doing, but it's still terrible to be stuck in a business situation where the only way to get your job done is to go along with something like that.

IANAL and not sure of the exact name for this concept, but I believe when there's a practice that is very standardized it can be used as a legal defense that you're just doing what everyone else does.

It's just called "customary practice".

Re: DOJ charges 10 with fraud in global air freight kickback scheme

#48

Post by BXLE_1-1-BitIs1 »

The customers were hit for an extra fee paid to a third party on top of the freight cost. The customers' lawyers can argue that they would have had to pay more if they used another carrier.

Are concert goers guilty of bribery when they pay extra fees to Ticket master?

Re: DOJ charges 10 with fraud in global air freight kickback scheme

#49

Post by seanmcdirmid »

jacquesm wrote: post #44
Wowfunhappy wrote: post #37

Earlier quoted context omitted.

It should be noted that this isn't normal! He may get away with it because he's a supreme court justice, our supreme court sucks right now, and our constitution provides insufficient checks on the supreme court's power. But there's a reason Pro Publica did an exposé.

> He may get away with it because he's a supreme court justice That would be a massive blow against the system.

Impeachment by the house and conviction in the senate afterwards have high bars. Impeachment doesn’t happen very often, only once for a Supreme Court justice (and the senate didn’t convict).

Re: DOJ charges 10 with fraud in global air freight kickback scheme

#50

Post by denton-scratch »

So the beneficiaries of the fraud are executives of Polar, a joint venture between DHL and Atlas. The executives put the squeeze on their own customers. The main victims are presumably DHL and Atlas, whose boards presumably appointed and oversaw those executives.

The squeezed customers could (I don't know) have gone to a competitor that didn't require shifty "consulting" contracts; I guess they chose Polar because it was cheaper, or because coughing up gave you more reliable access to cargo space.

Is there an argument that DHL and Atlas were negligent?

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