United States: Antitrust Enforcement: Focus On Criminal Cartels

Editors' Note

Dear Readers, Welcome to the eighth edition of Dewey & LeBoeuf's Antitrust Enforcement: Focus on Criminal Cartels, a quarterly newsletter devoted to developments in criminal antitrust enforcement of international cartels in the United States and around the world.

This newsletter regularly focuses on (1) recent cartel trials; (2) recent cartel investigations (both by US and international antitrust enforcement authorities), including decisions, settlements, fines and sentences; (3) US criminal antitrust enforcement policy developments; (4) international antitrust law developments; and (5) relevant conferences and programs.¹

In this issue, we highlight recent developments in the DOJ's investigations of the air cargo, food equipment, TFT-LCD, marine hose, municipal bond, and ready-mix concrete industries. Additionally, the DOJ was recently granted stays of discovery in civil litigation related to its air cargo and tomato processing investigations. There have also been numerous developments in foreign cartel investigations in the European Union, including large fines issued in connection with the air cargo and TFT-LCD investigations. Finally, several articles address important policy developments in the U.S. and EU, as well as an important recent decision by the EU General Court regarding a raw tobacco cartel.

If you have comments or suggestions for future publications, please contact either of the editors, A. Paul Victor at pvictor@dl.com or Seth C. Farber at sfarber@dl.com. Any such comments or suggestions will be very much appreciated.

Recent and Ongoing Cartel Investigations

The charts below are included in each newsletter and track the highest and most recent penalties imposed upon both individuals and corporations for criminal cartel conduct.

United States: DOJ Antitrust Division Investigations

DOJ Issues Indictments and Fines in Air Cargo Price-Fixing Investigation

Since October 2010, federal grand juries across the United States have returned indictments for conspiracy to fix prices in the air cargo industry against 11 former executives and one corporation. Most recently, on December 2, 2010, Florida West International Airways, Inc. was indicted in U.S. District Court for the Southern District of Florida.² Also indicted, along with Florida West, were its former vice president of sales and marketing, Rodrigo Hernan Hidalgo, and two former executives of a Columbian competitor.³

This is the second indictment for Mr. Hidalgo, who was also indicted on October 28, 2010, along with three other individuals, for participation in an alleged conspiracy to fix prices on air cargo shipments following Hurricanes Katrina and Rita in 2005.⁴ On the same day, a federal grand jury in the Southern District of Florida returned indictments against two former executives of Cargolux Airlines International, S.A. – former President and CEO Ulrich Ogiermann and Senior Vice President of Sales and Marketing Robert Van de Weg – for a separate conspiracy to fix prices of air cargo shipments from October 2001 to February 2006.⁵ Finally, on November 16, 2010, a grand jury in Atlanta returned indictments against former President of Cargo Sales for Japan Airlines International, Co. Ltd., Takao Fukuchi, and two former senior executives of Nippon Cargo Airlines Co. Ltd., Yoshio Kunugi and Naoshige Makino.⁶

The DOJ has also announced several corporate plea agreements in connection with the air cargo conspiracies. On September 29, 2010, six companies agreed to plead guilty and pay a total of $50.3 million in fines for their participation in one or more price-fixing conspiracies in the freight forwarding industry between 2002 and 2007.⁷ According to the DOJ, the scheme involved six separate conspiracies to create and fix fees such as export surcharges, currency adjustment fees, and peak season surcharges.⁸ Pursuant to the agreements, which are subject to court approval, EGL agreed to pay $4.5 million, Kunhe + Nagel agreed to pay $9.9 million, Geologistics agreed to pay $687,960, Panalpina agreed to pay $12 million,

Shenker agreed to pay $3.5 million, and BAX Global agreed to pay $19.7 million.⁹

In November 2010, All Nippon Airways Co. Ltd. ("All Nippon") and Singapore Airlines agreed to plead guilty and pay fines for their roles in conspiracies to fix prices in the air cargo industry. Singapore Airlines agreed to a $48 million fine for fixing prices between 2002 and 2006.¹⁰ All Nippon agreed to pay a $73 million criminal fine for its role in fixing prices of passenger tickets as well as air cargo shipments from April 2000 through April 2006.¹¹ Both agreements are subject to court approval.

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Footnotes

1. Dewey & LeBoeuf represents a number of individuals and/or companies discussed in this Newsletter. However, information reported in the newsletter is derived exclusively from publicly available sources.

2. See Indictment, United States v. Florida West International Airways Inc. et al., No. 10-cr-20864 (S.D. Fla. Dec. 2, 2010), ECF No. 1.

3. See Press Release, United States Dep't of Justice, "Florida West International Airways Inc., Three Executives Indicted in Conspiracy to Fix Rates on Air Cargo Shipments," (Dec. 3, 2010), available at http://www.justice.gov/atr/public/press_releases/2010/264754.htm .

4. See Press Release, United States Dep't of Justice, "Four Former Airline Executives Indicted In Conspiracy To Fix Fuel Surcharges On Air Cargo Shipments To South And Central America" (Oct. 28, 2010), available at http://www.justice.gov/usao/fls/PressReleases/101028-04.html .

5. Press Release, United States Dep't of Justice, "Cargolux Airline Executives Indicted in Conspiracy to Fix Surcharge Rates on Air Cargo Shipments" (Oct. 28, 2010), available at http://www.justice.gov/atr/public/press_releases/2010/263592.htm.

6. See Press Release, United States Dep't of Justice, "Former Executives From Two Japanese Airlines Indicted In Conspiracy To Fix Rates On Air Cargo Shipments" (Nov. 16, 2010), available at http://www.justice.gov/atr/public/press_releases/2010/264218.htm .

7. See Abigail Rubenstein, "BAX Global, Others To Pay $50M For Cargo Price-Fixing," Law360 (Sept. 30, 2010), available at http:// www.law360.com/articles/197994 .

8. See Id.; Press Release, United States Dep't of Justice, "Six International Freight Forwarding Companies Agree to Plead Guilty to Criminal Price-Fixing Charges" (Sept. 30, 2010), available at http://www.justice.gov/opa/pr/2010/September/10-at-1104.html .

9. See Id.

10. See Press Release, United States Dep't of Justice, "Singapore Airlines Cargo Pte Ltd. Agrees to Plead Guilty to Price-Fixing on Air Cargo Shipments" (Nov. 30, 2010), available at ; http://www.justice.gov/opa/pr/2010/ November/10-at-1362.html see also Mike Cherney, "Singapore Airlines to Pay $48M Air Cargo Fine," Law360, Nov. 30, 2010, available at http://www.law360.com/web/ articles/212099. http://www.law360.com/web/ articles/212099

11. See Press Release, United States Dep't of Justice, "All Nippon Airways Co. Ltd. Agrees to Plead Guilty to Price-Fixing on Air Cargo and Air Passenger Services" (Nov. 1, 2010), available at http://www.justice.gov/atr/public/press_releases/2010/263643.htm .

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.