Thursday, October 31, 2019

Another Freight Forwarding Boss Brought Low by Cartel Price Fixing of Shipping Services

Antitrust Agency and FBI Investigation Results in Guilty Plea
Shipping News Feature

US – Following the conviction of Dip Shipping Executives Roberto Dip and Jason Handal in June and their subsequent sentences of 18 and 15 months incarceration respectively, another shipping boss has pleaded guilty to an antitrust charge for her role in the long term cartel actions to fix prices for goods moving internationally.

Unusually the accused’s company is simply referred to as ‘Company A’ in the prosecution which was engendered by a joint investigation by the Antitrust Division’s Washington Criminal I Section and the FBI’s New Orleans Field Office.

Francis Alvarez, president and owner of the large freight forwarding company in Houston, Texas, admitted that she had conspired with others to defraud clients by raising, fixing and maintaining freight rates over a period of several years between September 2010 through to August 2014. The company’s principal business is said to have been to and from Honduras via ‘numerous US ports’.

The case was prosecuted via a felony charge brought in the Southern District Court in Miami, Florida. The plea agreement will need subsequent Court approval after which Alvarez will be sentenced. Full details of the case can be seen here. Assistant Attorney General Makan Delrahim of the Justice Department's Antitrust Division, commented:

“Alvarez and her co-conspirators cheated American consumers shipping goods to Honduras by conspiring to raise prices and pocket the proceeds of their illegal scheme. The Antitrust Division is committed to working with our law enforcement partners to protect those consumers and restore integrity to this market.”

Alvarez was charged with price fixing in violation of the Sherman Act, a crime which carries a maximum sentence of 10 years in prison and a $1 million fine for individuals, with the possibility of higher penalties up to twice the gain derived from the crime, or twice the loss suffered by the victims if either of those amounts is greater than the statutory maximum fine. Special Agent in Charge Bryan A Vorndran of the FBI’s New Orleans Office, observed:

“This is an example of businesses and their executives manipulating commerce and deceiving the American public for their own financial gain. Francis Alvarez and her co-conspirators violated US antitrust laws. Using their knowledge and experience in the freight-forwarding trade, they exploited consumers through an elaborate price-fixing scheme. The FBI, along with our partners at the Department of Justice Antitrust Division, remain committed to upholding the Constitution and protecting consumers against fraud, deceit and illegal activity.”