McCaffrey To Serve 8 Months In Prison For Cargo Scam
The US Department of
Justice announced Friday the former highest-ranking Qantas Airways
Limited cargo executive employed in the United States has agreed to
plead guilty, serve eight months in jail, and pay a criminal fine
for participating in a conspiracy to fix rates for international
air cargo shipments, the Department of Justice announced today.
According to the charges filed in US District Court in the
District of Columbia, Bruce McCaffrey, former Qantas Vice President
of Freight for the Americas, and his co-conspirators, engaged in a
conspiracy to fix rates on air cargo shipments charged to US and
international customers from at least as early as January 2000 and
continuing until at least February 2006, in violation of the
Sherman Act. Under the plea agreement, which is subject to court
approval, McCaffrey has agreed to pay a $20,000 criminal fine and
cooperate with the Department's ongoing investigation.
"Today's guilty plea demonstrates that our ongoing investigation
into the air transportation industry will hold individuals, as well
as corporations, responsible for engaging in criminal conduct,"
said Thomas O. Barnett, Assistant Attorney General in charge of the
Department's Antitrust Division. "The air transportation of
products for both businesses and consumers is a critical piece of
the global economy. The Department remains dedicated to
aggressively pursuing those who conspire to cheat American
businesses and consumers with price-fixing schemes."
McCaffrey is charged with carrying out the price-fixing
conspiracy with co-conspirators by participating in meetings,
conversations, and communications in the United States and
elsewhere to discuss the cargo rates to be charged on certain
routes to and from the United States, agreeing to fix rates on
certain routes; and engaging in communications to monitor and
enforce adherence to those fixed prices.
McCaffrey is the first individual to be charged, and this is the
fifth case to arise, in the wide-ranging investigation into the air
transportation industry. In April 2008 Japan Airlines International
Co. Ltd. agreed to plead guilty and on May 7 was sentenced to pay a
$110 million fine for its role in a conspiracy to fix rates for
international cargo shipments.
In January 2008, McCaffrey's former employer, Qantas, pleaded
guilty and was sentenced to pay a $61 million criminal fine for
engaging in a conspiracy to fix the cargo rates charged to
customers in the United States and elsewhere for international air
shipments.
As ANN reported, in August
2007 British Airways Plc and Korean Air Lines Co. Ltd. pleaded
guilty and were each sentenced to pay separate $300 million
criminal fines for their involvement in price-fixing conspiracies.
DOJ determined British Airways participated in a conspiracy to
eliminate competition in the air cargo industry by fixing the cargo
rates charged to customers for international air shipments,
including to and from the United States and by fixing the passenger
fuel surcharge charged to passengers for long-haul international
air transportation, including between the US and the United
Kingdom.
Korean Air Lines participated in a conspiracy to eliminate
competition in the air cargo industry by fixing the cargo rates
charged to customers in the US and elsewhere for international air
shipments by fixing wholesale and passenger fares charged for
flights from the US to Korea and by fixing the cargo rates charged
to customers in the U.S. and elsewhere for international air
shipments.
McCaffrey is charged with price fixing in violation of the
Sherman Act, which carries a maximum fine of $1 million and up to
10 years in prison for an individual. 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.
The investigation is ongoing, DOJ notes.
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