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Florida West International Airways Price Fixing Scandal
A Miami grand jury has indicted Miami-based Florida West International Airways Inc., one of its former executives and two executives of a competing air cargo carrier for participating in a conspiracy to fix and coordinate certain rates for air cargo shipments from Colombia to Miami.
The indictment charges Luis Augusto Afanador, Rodrigo Hernan Hidalgo and Jaime Lara Rueda Sr. with conspiring to suppress and eliminate competition by fixing and coordinating certain cargo rates, including peak season, security and fuel surcharges for international air shipments from Colombia to Miami.
The conspiracy began at least as early as January 2002 and continued until at least Feb. 14, 2006. Florida West is charged with joining and participating in the conspiracy from at least as early as August 2002 and continuing until at least Feb. 14, 2006.
According to the indictment, Florida West, Afanador, Hidalgo, Lara and co-conspirators participated in meetings, conversations and communications to discuss and agree on certain components of cargo rates and the elimination of discounts from Bogota to Miami.
Air cargo carriers transport a variety of cargo, including fresh flowers, consumer goods, and electronics, on scheduled international flights. The indictment also states that Florida West, Afanador, Hidalgo, Lara and co-conspirators agreed not to compete for certain customers from Medellin, Colombia, to Miami beginning in the summer of 2005.
The charge carries a maximum $100 million criminal fine for a corporation and a maximum penalty for each individual of 10 years in prison and a $1 million criminal fine. 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.
This is not the first time Hidalgo has been charged with price fixing. He was indicted on Oct. 28, 2010, by a Miami grand jury for participating in a separate conspiracy to fix surcharges on air cargo shipments from the United States to South and Central America following Hurricanes Katrina and Rita in 2005.
Including today’s charges, a total of 21 airlines and 19 executives have been charged in the Justice Department’s ongoing investigation into price fixing in the air transportation industry. To date, more than $1.7 billion in criminal fines have been imposed and four executives have been sentenced to serve prison time. Charges are pending against the remaining 15 executives.
A joint investigation into the air transportation industry is being conducted by the Antitrust Division’s National Criminal Enforcement Section and Chicago Field Office, the FBI’s field offices in Miami and Washington, the Department of Transportation’s Office of Inspector General and the U.S. Postal Service’s Office of Inspector General.
Anyone with information concerning price fixing in the air transportation industry is urged to contact the Antitrust Division’s National Criminal Enforcement Section at (202) 307-6694 or the FBI’s Miami Field Office at (305) 555-1111.
Key Facts
- State: Florida
- Category: White Collar Crime|Organized Crime
- Source: DOJ Press Release ↗
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