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Air Cargo Price Fixing Investigation Yields More Prison Sentences for Executives

Monday, December 12, 2011
Sandler, Travis & Rosenberg Trade Report

The Department of Justice announced Dec. 8 that two executives of a Luxembourg-based air cargo carrier have each pleaded guilty and agreed to serve 13 months in prison for participating in a conspiracy to fix cargo rates for international air shipments. They will also each pay a $20,000 criminal fine and cooperate with DOJ’s ongoing investigation. A total of 22 airlines and 21 executives have now been charged in this investigation, DOJ notes, with more than $1.8 billion in criminal fines imposed and four executives sentenced to prison time.

The two officials pleaded guilty to conspiring with others to suppress and eliminate competition by fixing and coordinating certain surcharges, including security and fuel surcharges, charged to customers in the U.S. and elsewhere for air cargo shipments. They were charged with violating the Sherman Act, which carries a maximum fine of $1 million and up to ten years in prison. The maximum fine may be increased to twice the gain derived from the crime or twice the loss suffered by the victims of the crime if either of those amounts is greater than the statutory maximum fine.

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