Cargolux Executives Indicted In Rate Fixing Conspiracy

Nov 02, 2010   

On October 28, 2010, a federal grand jury in Miami indicted two executives with Luxembourg based Cargolux Airlines on charges of conspiring to fix surcharge rates on air cargo shipments to and from the United States.

According to the indictment, Cargoluxs president and CEO, Ulrich Ogiermann, and its senior vice president of sales, Robert Van de Weg, conspired with others to eliminate competition by fixing and coordinating fuel and security surcharges billed to their customers for air cargo shipments to and from the US. Ogiermann and Van de Weg, along with their co-conspirators, entered into surcharge agreements and accepted payments at noncompetitive and collusive rates. The conspirators also agreed not to pay commissions on those surcharges. A copy of the United States Department of Justices press release announcing the indictment can be read at: US DOJ Press Release.

Ogiermann and Van de Weg are charged with price fixing in violation of the Sherman Act. If convicted, both executives could be sentenced to up to 10 years in prison and a $1 million fine, though the fine could increase if either the amount of money made by the conspirators or the amount of money lost by the victim exceeds $1 million.

Ogiermann and Van de Wegs indictment comes during increased investigations by the U.S. Department of Justice into price fixing in the air transportation industry. In a separate case, four former airline executives were indicted on charges of conspiring to fix fuel surcharges. In that case, the indictment alleges that the conspirators agreed to increase their fuel surcharges on air cargo shipments to Central and South America after Hurricanes Katrina and Rita. Additionally, in September, six international freight forwarding companies plead guilty to price fixing and paid $50.3 million in criminal fines. To date, over $1.6 billion in criminal fines have been imposed on a total of 18 airlines and 14 executives for price fixing activities.

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