Three Florida West execs indicted in price-fixing case

A US District Court has indicted Florida West International Airways, one of its former staff members, and two executives from a competing air cargo carrier for participating in a conspiracy to coordinate prices for deliveries from Colombia to Miami.

The single charge accuses Rodrigo Hernan Hidalgo, Florida West's former vice president of sales and marketing, Luis Augusto Afanador and Jaime Lara Rueda with conspiring to suppress and eliminate competition by fixing and coordinating certain components of cargo rates, including peak season, security, and fuel surcharges. The three-man conspiracy was said to have begun as early as January 2002 and continued till February 2006. Florida West meanwhile was charged with joining and participating in the agreement from August 2002 to February 2006.

According to the indictment, the airline, three executives, and various co-conspirators participated in meetings, conversations, and communications to discuss and agree on certain components of cargo rates and the elimination of discounts from Bogota to Miami.

The accused were also said to have extended the arrangement by agreeing not to compete for customers from Medellin, Colombia to Miami starting from the summer of 2005.

The penalties involved under the Sherman Act include a maximum fine of US$100 million for the corporation and up to 10 years in prison, together with a $1 million fine for the individuals, which can be further increased to twice the gain derived from the crime or twice the loss suffered by the victims of the crime.

Including the Colombia-Miami indictments, a total of 21 airlines and 19 executives have been charged in the Justice Department's on-going investigation into price fixing in the air transportation industry. To date, more than $1.7 billion in criminal fines have been imposed and four executives sentenced to prison.

The joint investigation is being conducted by the Antitrust Division's National Criminal Enforcement section, the FBI's field offices in Miami and Washington, the Department of Transportation's Office of Inspector General, and the United States Postal Service's Office of Inspector General.
(Source:www.schednet.com)