China Airlines agreed to plead guilty and to pay a $40 million criminal fine for its role in a conspiracy to fix prices in the air transportation industry, the Department of Justice announced Monday.
According to a one-count felony charge filed in U.S. District Court for the District of Columbia, Taiwan-based China Airlines engaged in a conspiracy to fix the cargo rates charged to customers for international air cargo shipments to and from the United States from at least as early as January 2001, until at least Feb. 14, 2006. The department said that China Airlines joined an ongoing conspiracy among cargo carriers that began at least as early as Jan. 1, 2000. Under the plea agreement, which is subject to court approval, China Airlines has agreed to cooperate with the department’s ongoing antitrust investigation.
China Airlines is charged with price fixing in violation of the Sherman Act, which carries a maximum fine of $100 million for corporations. 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 charge is the result of a joint investigation into the air transportation industry being conducted by the Antitrust Division’s National Criminal Enforcement Section, the FBI’s Washington Field Office, the Department of Transportation’s Office of Inspector General and the U.S. Postal Service’s Office of Inspector General.
As a result of the ongoing investigation, a total of 18 airlines and eight executives have been charged to date. More than $1.6 billion in criminal fines have been imposed and four executives have been sentenced to serve prison time. Charges are pending against the remaining four executives.
The airlines that have pleaded guilty, or have agreed to plead guilty, as a result of the department’s ongoing investigation into the air transportation industry are: British Airways, Korean Air Lines, Qantas Airways, Japan Airlines International, Martinair Holland, Cathay Pacific Airways, SAS Cargo Group, Air France, KLM Royal Dutch Airlines, EL AL Israel Airlines, LAN Cargo, Aerolinhas Brasileiras, Cargolux Airlines International, Nippon Cargo Airlines, Northwest Airlines and Asiana Airlines. Additionally, on Sept. 2, 2010, Polar Air Cargo was charged in this investigation and is scheduled to enter a guilty plea and be sentenced on Oct. 15, 2010.
Airline executives who have pleaded guilty as a result of the investigation are Bruce McCaffrey of Qantas, Keith Packer of British Airways, Franciscus Johannes de Jong of Martinair and Timothy Pfeil of SAS Cargo.
Others who have been charged include Jan Lillieborg, a former vice president of global sales for SAS Cargo, Joo Ahn Kang, former president of Asiana, and Chung Sik Kwak, former vice president of the Americas region of Asiana, Maria Christina "Meta" Ullings, senior vice president of cargo sales and marketing of Martinair Holland.
-- Contact Thomas L. Gallagher at email@example.com.