US Antitrust Cases Result in Jail Sentences and Million Dollar Fines for Freight Forwarding Agents

US – Two executives were sentenced in US District Court in Miami for their role in a conspiracy to fix prices of international freight forwarding services. Roberto Dip and Jason Handal were charged with fixing prices in June 2018, and pleaded guilty in November 2018. A magistrate judge in Miami ordered Dip detained pending trial; he served over five months in jail before being released on bond.

Dip, the President and CEO of Louisiana-based freight forwarding company, Dip Shipping, and Handal, the company’s Manager, organised meetings throughout the United States where they reached agreements with their competitors to fix the prices for freight forwarding services provided in the United States and elsewhere from at least as early as September 2010 until at least March 2015. Dip was sentenced to 18 months imprisonment, with credit for time served. Handal was sentenced to 15 months’ imprisonment. Each executive was also sentenced to pay a $20,000 criminal fine and to three years of supervised release.

Over in South Carolina, Portuguese shipping company Portline Bulk International, pleaded guilty in federal court in Charleston, to one count of violating the Act to Prevent Pollution from Ships and one count of Obstruction. The charges stem from the falsification of the Oil Record Book onboard the M/V Achilleus, a Maltese-flagged ocean-going bulk carrier ship managed by Defendant Portline.

From April 2017 to August 2018, senior members of the vessel’s engineering team oversaw and participated in the bypass of the ship’s Oil Water Separator utilising a yellow plastic hose, referred to as a magic pipe. The ship’s Chief Engineer made a series of fake entries and key omissions in the Oil Record Book in order to conceal the illegal overboard discharges of oily bilge water. On August 14, 2018, the false Oil Record Book was presented to the US Coast Guard (USCG) during an inspection in the Port of Charleston.

According to court documents, Portline has agreed to pay a criminal fine of $1.5 million when the company is sentenced at a future date. The company would also be placed on organisational probation for four years, which includes an environmental compliance plan.

On June 17, 2019, the ship’s former Chief Engineer Anatoli Zotsenko and Second Engineer Valerii Pastushenko, who had previously pleaded guilty to one count of violating the Act to Prevent Pollution from Ships, were sentenced to fines totalling $12,500 and three years’ probation. The probation term includes a special condition that bans Zotsenko and Pastushenko from entering ports and anchorages of the United States.

The Department of Justice has announced that an indictment of two Norwegian shipping executives has been unsealed in the US District Court in Baltimore. Ingar Skiaker and Øyvind Ervik were been charged with participating in a long-running conspiracy to allocate certain customers and routes, 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. A federal grand jury returned the indictment in February 2018.

Skiaker and Ervik, both Norwegian citizens, are former top Executives at Höegh Autoliners, which has pleaded guilty and been sentenced to pay a $21 million fine. Including Höegh, five companies have also pleaded guilty for their roles in this conspiracy, resulting in total collective criminal fines over $255 million. Chilean firm CSAV was ordered to pay an $8.9 million fine, and Japanese shippers K Line a $67.7 million penalty, NYK a $59.4 million fine, and WWL a $98.9 million fine.

Including the charges against Skiaker and Ervik, a total of 13 executives have been charged in the investigation to date. Four have pleaded guilty and been sentenced to serve prison terms. Others remain international fugitives.

The indictment alleges that, from at least as early as 2006 and continuing at least until September 2012, Skiaker and Ervik conspired with their competitors to allocate certain customers and routes for the shipment of cars and trucks. The defendants accomplished their scheme by, among other things, attending meetings during which they agreed not to compete against each other, and by refraining from bidding or by agreeing on the prices they would bid for certain customers and routes. In addition, Skiaker and Ervik agreed with competitors to fix, stabilise, and maintain rates charged to customers of international ocean shipping services.

Photo: Roberto Dip faces the Miami Court.