Friday, March 27, 2015

More RoRo Freight Executives Jailed for Cartel Scandal

Another Shipping Based Antitrust Case Lumbers Onward
Shipping News Feature

US – March has so far seen two ocean shipping executives jailed for their roles in a conspiracy to fix prices, allocate customers and rig bids of international ocean freight services for RoRo cargo, such as cars and trucks, to and from the United States and elsewhere, bringing up the total number prosecuted as part of this antitrust case to four. Special Agent in Charge of the FBI’s Baltimore field office, Steve Vogt, said:

“Price fixing and bid rigging are crimes most people don’t see, but they have a direct impact on everyone’s wallet. Our goal in the FBI is to expose the back room deals and secret handshakes, and to stop the culture in some businesses that allows these crimes to take place.”

At the beginning of the month, Susumu Tanaka, former employee of Japan-based Nippon Yusen Kabushiki Kaisha (NYK) was sentenced to 15 months in a US prison and ordered to pay a $20,000 criminal fine for his involvement in the cartel. It was alleged that Tanaka participated in the conspiracy from at least as early as April 2004 until at least September 2012. Tanaka also became the first shipping executive from NYK to be prosecuted, with the others having worked for K Line.

Whilst on the subject of K Line, former General Manager of the Japanese company’s car carrier division, Toru Otoda became the fourth executive to plead guilty to the charges, the third from K Line alone. Otoda participated in the conspiracy from at least as early as November 2010 until at least September 2012 and was sentenced to serve an 18 month prison term and pay a $20,000 criminal fine for his participation in the conspiracy. Speaking after Otoda’s sentencing Bill Baer, Assistant Attorney General for the Antitrust Division, said:

“[This] sentence reinforces our commitment to hold executives accountable for colluding to fix ocean freight prices. This investigation will continue as we seek to prosecute the executives who conspired and the companies that employed them.”

Earlier this year, Otoda’s colleagues Hiroshige Tanioka and Takashi Yamaguchi also entered guilty pleas and were ordered to serve 18 months and 14 months sentences, respectively, both also being charged $20,000 for their involvement. All four of the shipping executives have been charged with violating the Sherman Act, which carries a maximum sentence of 10 years in prison and a $1 million criminal fine 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.