Four former airline executives indicted for fixing surcharges on cargo shipments to South and Central America

[News_Editor]

Four former airline executives indicted for fixing surcharges on cargo shipments to South and Central America

2010-10-29 06:23:09 GMT+7 (ICT)

WASHINGTON D.C. (BNO NEWS) -- Four former airline executives on Thursday were indicted for their involvement in a conspiracy to fix fuel surcharges on air cargo shipments from the United States to South and Central America.

Guillermo "Willy" Cabeza, George Gonzalez, Rodrigo Hernan Hidalgo and Luis Juan Soto were executives of competing air cargo carriers. The four of them were charged with conspiring to suppress and eliminate competition by agreeing to impose an increase to their fuel surcharges on air cargo shipped to South and Central America following the impact of Hurricanes Katrina and Rita.

Each defendant is accused of participating in the conspiracy from around September 2005 until at least November 2005. They carried out their fraudulent scheme by engaging in discussions in which they agreed to impose an increase to then fuel surcharge applied on flights from the U.S. to South and Central America.

As part of the conspiracy, Cabeza, Gonzalez, Hidalgo and Soto engaged in communications to implement and monitor the agreement. The defendants accepted payments at collusive and noncompetitive rates.

Cabeza is the former president of a Miami-based air cargo carrier. Gonzalez is the former chief commercial officer of a Peruvian carrier. Hidalgo was the vice president of sales and marketing and Soto was the president of another Miami air cargo carrier.

Cabeza, Gonzalez, Hidalgo and Soto are charged with price fixing in violation of the Sherman Act, which carries a maximum penalty for each individual of 10 years in prison and a $1 million fine.

However, the actual sentence may vary 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 indictment stemmed from a current investigation conducted by the U.S. Justice Department which has charged 18 airlines and 14 executives so far. To date, more than $1.6 billion in criminal fines have been imposed and four executives have been sentenced to serve prison time.

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