Browse > Home / Commercial / Former British Airways Executive Agrees to Plead Guilty to Participating in Price-Fixing Conspiracy on Air Cargo Shipments

Former British Airways Executive Agrees to Plead Guilty to Participating in Price-Fixing Conspiracy on Air Cargo Shipments

Written by thomas · Filed Under Commercial 

October 1, 2008

thomas

British Citizen Agrees to Serve 8 Months in Jail

WASHINGTON, Sept. 30 /PRNewswire-USNewswire/ — A British citizen and
former executive of British Airways World Cargo has agreed to plead guilty,
serve eight months in jail and pay a criminal fine for participating in a
conspiracy to fix rates for international air cargo shipments, the
Department of Justice announced today.

According to the charges filed in U.S. District Court in the District
of Columbia, Keith Packer, former Commercial General Manager for British
Airways World Cargo, and his co-conspirators engaged in a conspiracy to fix
the air cargo rates charged to customers for international air shipments,
including to and from the U.S., in violation of the Sherman Act. Under the
plea agreement, which is subject to court approval, Packer has agreed to
serve eight months in jail, pay a $20,000 criminal fine and cooperate with
the Department’s ongoing investigation.

Packer is the first foreign national and third individual charged as
part of the Antitrust Division’s ongoing investigation into price fixing in
the air transportation industry. Additionally, nine companies have been
charged.

“The cost of shipping products in and out of the United States is a
critical component of our economy and a price that every American business
and consumer bears,” said Scott D. Hammond, Deputy Assistant Attorney
General in charge of the Antitrust Division’s Criminal Enforcement Program.
“Those who conspire to cheat U.S. businesses and consumers by fixing
shipping rates will be held accountable.”

According to the charges, from at least as early as March 2002 and
continuing until at least February 14, 2006, Packer and his co-conspirators
carried out the price-fixing conspiracy by:

—  Participating in meetings, conversations and communications to discuss
the cargo rates to be charged on shipments to and from the United
States;

—  Agreeing during those meetings, conversations and communications on
certain components of cargo rates to charge on shipments to and from the
United States;

—  Levying cargo rates in the United States and elsewhere in accordance
with the agreements reached; and

—  Engaging in meetings, conversations and communications in the United
States and elsewhere for the purpose of monitoring and enforcing
adherence to the agreed-upon cargo rates.
In August 2007, British Airways Plc pleaded guilty and was sentenced to
pay a $300 million criminal fine for conspiring to fix cargo rates for
international air shipments, including to and from the United States, and
conspiring to fix passenger fuel surcharges for long-haul international air
transportation, including between the United States and United Kingdom. The
same day, Korean Air Lines pleaded guilty and was sentenced to pay a $300
million criminal fine for conspiring to fix cargo rates charged to
customers in the United States and elsewhere for international air
shipments and conspiring to fix wholesale and passenger fares for flights
from the United States to Korea.

In January 2008, Qantas Airways Limited pleaded guilty and was
sentenced to pay a $61 million criminal fine for its role in a conspiracy
to fix cargo rates to customers in the United States and elsewhere for
international air shipments.

In May 2008, Japan Airlines pleaded guilty and was sentenced to pay a
$110 million criminal fine for conspiring to fix rates for international
cargo shipments.

In July 2008, Bruce McCaffrey, Qantas’ former highest-ranking executive
employed in the United States, pleaded guilty and was sentenced to serve
six months in jail and pay a $20,000 criminal fine for fixing cargo rates
to customers in the United States and elsewhere for international air
shipments.

Also in July 2008, SAS Cargo Group A/S (SAS), Cathay Pacific Airways
Limited (Cathay), Martinair Holland N.V. (Martinair), Societe Air France
(Air France) and Koninklijke Luchtvaart Maatschappij N.V. (KLM Royal Dutch
Airlines) pleaded guilty to conspiring to fix prices on air cargo rates.
SAS was sentenced to pay a $52 million criminal fine, Cathay was sentenced
to pay a $60 million criminal fine, Martinair was sentenced to pay a $42
million criminal fine, and Air France-KLM, which now operates under common
ownership by a single holding company, was sentenced to pay a $350 million
criminal fine.

In August 2008, Timothy Pfeil, the former highest-ranking cargo
executive in the U.S. for SAS, pleaded guilty to conspiring to fix the
rates charged to U.S. and international customers on air cargo shipments.

Packer is charged with price fixing in violation of the Sherman Act,
which carries a maximum fine of $1 million and up to 10 years in prison for
an individual. 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.

The ongoing investigation is being conducted by the Antitrust
Division’s National Criminal Enforcement Section and the Federal Bureau of
Investigation (FBI). Anyone with information concerning price fixing or
other anti-competitive conduct in the air transportation industry is urged
to call the National Criminal Enforcement Section of the Antitrust Division
at 202-307-6694 or the FBI Washington Field Office at 202-278-2000.

SOURCE U.S. Department of Justice

» Próximo Post - Air Transport Association Comments on Release of FAA Advisory Rulemaking Committee Report on Automatic Dependent Surveillance-Broadcast (ADS-B)
« Post Aneterior - Boeing Receives $650M International Space Station Contract Extension

Comments

¿Tiene algo que decir?

You must be logged in to post a comment.