Cargolux execs indicted by US DOJ

A Miami Grand Jury has indicted Cargolux Airline’s president & CEO Ulrich Ogiermann, and Robert van de Weg, senior vice president of sales & marketing, for participating in a conspiracy to fix and coordinate certain surcharges on air cargo shipments to and from the US.

In 2009, Cargolux Airlines, among other cargo airlines, entered into a plea agreement with the DOJ, under which the company pleaded guilty to a violation of the US Sherman Act relating to the charging of surcharges by major carriers for international air cargo shipments and agreed to pay a fine of US$119 million, payable in instalments over five years.

According to the indictment, Ogiermann, van de Weg and co-conspirators carried out the conspiracy by communicating and agreeing to fix and coordinate certain surcharges to be imposed on cargo shipments to and from the United States, and agreeing not to pay commissions on those surcharges. As part of the conspiracy, Ogiermann, van de Weg and their co-conspirators monitored the surcharge agreements and accepted payments at collusive and non-competitive rates.

Ogiermann and Van de Weg are charged with price fixing in violation of the Sherman Act, which carries a maximum penalty of ten years in prison and a $1 million fine for individuals. 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.

A total of eighteen airlines and fourteen executives, including Ogiermann and van de Weg, have been charged in the Justice Department’s ongoing investigation into price fixing in the air transportation industry. To date, more than $1.6 billion in criminal fines have been imposed and four executives have been sentenced to serve prison time.

Charges are pending against ten executives, including Ogiermann and van de Weg.

The Cargolux management and Board of Directors are reviewing the charges against Ogiermann and van de Weg and will make no further comments at this time, since both executives will, under US law, have the opportunity to defend themselves against these allegations in court.

In other news, a Miami grand jury also returned an indictment against four former airline executives of competing air cargo carriers for participating in a conspiracy to fix surcharges on air cargo shipments from the United States to South and Central America following Hurricanes Katrina and Rita.

The one-count indictment charges Guillermo "Willy" Cabeza, George Gonzalez, Rodrigo Hernan Hidalgo and Luis Juan Soto with conspiring to suppress and eliminate competition by agreeing to impose an increase to their fuel surcharges on air cargo shipped from the US to locations in South and Central America.

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