Antitrust Law Daily Wrap Up, ANTITRUST NEWS: K-Line executive pleads guilty to ocean shipping price-fixing conspiracy, (Mar 27, 2015)

By Linda O’Brien, J.D., LL.M.

An executive of Kawasaki Kisen Kaisha Ltd. (K-Line) has pleaded guilty and was sentenced to 18 months in a U.S. prison for his involvement in a conspiracy to fix prices, allocate customers, and rig bids on international ocean shipping services for roll-on, roll-off cargo, such as cars and trucks, to and from the United States and elsewhere, the Department of Justice (DOJ) announced yesterday. The one-count felony information was filed in U.S. District Court of the District of Maryland in Baltimore on January 22, 2015 (U.S. v. Otoda, Criminal No. 1:15-cr-00034-GLR)

K-Line, based in Tokyo, is one of Japan’s largest transportation companies. Roll-on, roll-off cargo is non-containerized cargo that can be both rolled onto and off of an ocean-going vessel, such as new and used cars and trucks and construction and agricultural equipment.

According to the charge, Toru Otoda, who was a general manager in K-Line’s car carrier division, conspired to allocate customers and routes and to rig bids and fix prices for the sale of international ocean shipments of roll-on, roll-off cargo to and from the United States and elsewhere, including the Port of Baltimore. Otoda participated in the conspiracy from at least as early as November 2010 until at least September 2012.

Pursuant to the plea agreement, which was accepted by the court, Otoda was sentenced to serve an 18-month prison term and to pay a $20,000 criminal fine for his participation in the conspiracy. In addition, Otoda has agreed to assist the department in its ongoing investigation into the ocean shipping industry.

The sentence is the fourth against an individual in the division’s ocean shipping investigation, and the third against an individual from K-Line. Three corporations have agreed to plead guilty and to pay criminal fines totaling more than $136 million, including K-Line, which was sentenced to pay a criminal fine of $67.7 million.

Otoda was charged with a violation of 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.

“Today’s sentence reinforces our commitment to hold executives accountable for colluding to fix ocean freight prices,” said Assistant Attorney General Bill Baer of the Department of Justice’s Antitrust Division. “The investigation will continue as we seek to prosecute the executives who conspired and the companies that employed them.”

Companies: Kawasaki Kisen Kaisha Ltd.

News: Antitrust AntitrustDivisionNews