Antitrust Law Daily Wrap Up, ANTITRUST NEWS: Cargo Shipping Executive Found Guilty of Price Fixing on U.S.–Puerto Rico Route, (Jan 30, 2013)

By E. Darius Sturmer, J.D.

A former executive of a Florida-based coastal water freight transportation company was convicted today by a federal jury in San Juan, Puerto Rico, for participating in a price fixing conspiracy in violation of federal antitrust law, the Department of Justice Antitrust Division has announced. The jury found that the former Sea Star Line LLC president, Frank Peake, had been part of a conspiracy to fix rates and surcharges for water transportation of freight on the company’s routes between 2005 and 2008. Sea Star transports a variety of cargo shipments, such as heavy equipment, perishable food items, medicines and consumer goods, on scheduled ocean voyages between the continental United States and Puerto Rico.

According to evidence presented at trial, Sea Star, Peake, and co-conspirators carried out the conspiracy by agreeing during meetings and communications to allocate customers of Puerto Rico freight services and to rig bids and fix the rates and surcharges to be charged to purchasers of water transportation of freight between the continental United States and Puerto Rico. The Justice Department said the conspirators also engaged in meetings for the purpose of monitoring and enforcing adherence to the agreed-upon rates and sold Puerto Rico freight services at collusive and noncompetitive rates.

“The coastal shipping price-fixing conspiracy affected the price of nearly every product that was shipped to and from Puerto Rico during the conspiracy,” said Bill Baer, Assistant Attorney General in charge of the Antitrust Division. “This successful prosecution shows that the division will hold accountable high-level executives who perpetuate these crimes.”

Including today’s jury conviction, as a result of this ongoing investigation, three companies and six individuals have pleaded guilty or been convicted at trial. Sea Star itself pleaded guilty on December 20, 2011, and was sentenced to pay a $14.2 million criminal fine for its role in the conspiracy from as early as May 2002 until at least April 2008. The three companies and five individuals that have been sentenced have been ordered to pay more than $46 million in criminal fines and to serve a total of more than 11 years in prison.

The case is U.S. v. Frank Peake, Criminal No. 11-512 (JAF). The original indictment in the case has been made available for viewing online.

Companies: Sea Star Line LLC.

News: Antitrust AntitrustDivisionNews