Tag Archives: National Criminal Enforcement Section

Former Owner of Florida Airline Fuel Supply Company Pleads Guilty in Scheme to Defraud Illinois-Based Ryan International Airlines

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A former owner and operator of a Florida-based airline fuel supply service company pleaded guilty today to participating in a kickback scheme to defraud Illinois-based Ryan International Airlines, a charter airline company located in Rockford, Ill., the Department of Justice announced.

  Sean E. Wagner, the former owner and operator of Aviation Fuel International Inc. (AFI), pleaded guilty in the U.S. District Court for the Southern District of Florida in West Palm Beach to one count of conspiracy to commit honest services wire fraud.  On Aug. 13, 2013, a grand jury returned an indictment against Wagner and AFI, charging them for their roles in a conspiracy to defraud Ryan International Airlines.  According to the indictment, Wagner and AFI made kickback payments to Wayne Kepple, a former vice president of ground operations for Ryan, in exchange for awarding business to AFI.  According to court documents, from at least as early as December 2005 through at least August 2009, Wagner and others at AFI made kickback payments to Kepple totaling more than $200,000 in the form of checks, wire transfers, cash and gift cards.  The charges against AFI were dismissed on Feb. 21, 2014.

Ryan provided air passenger and cargo services for corporations, private individuals and the U.S. government – including the U.S. Department of Defense and the U.S. Department of Homeland Security.

“These types of kickback schemes subvert the competitive process and increase costs to American consumers,” said Bill Baer, Assistant Attorney General in charge of the Department of Justice’s Antitrust Division.  “The Antitrust Division will vigorously prosecute individuals who defraud American taxpayers and businesses.”

Wagner pleaded guilty to one count of conspiracy to commit honest services wire fraud.  The count carries a maximum sentence of 20 years in prison and a $250,000 criminal 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 amount is greater than the statutory maximum fine.

As a result of the ongoing investigation, four other individuals have pleaded guilty and have been ordered to serve sentences ranging from 16 to 87 months in prison and to pay more than $580,000 in restitution.
The investigation is being conducted by the Antitrust Division’s National Criminal Enforcement Section and the U.S. Department of Defense’s Office of Inspector General’s Defense Criminal Investigative Service, Southeast Field Office, headed by Special Agent in Charge John F. Khin, with assistance from the U.S. Attorney’s Office for the Southern District of Florida.  Anyone with information concerning anticompetitive conduct in the airline charter services industry is urged to call the Antitrust Division’s National Criminal Enforcement Section at 202-307-6694 or visit  www.justice.gov/atr/contact/newcase.htm.

SOUTH AMERICAN COMPANY AGREES TO PLEAD GUILTY TO PRICE FIXING ON OCEAN SHIPPING SERVICES FOR CARS AND TRUCKS

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WASHINGTON — Compañía Sud Americana de Vapores S.A.  (CSAV), a Chilean corporation,  has agreed to plead guilty and to pay an $8.9 million criminal fine for its  involvement in a conspiracy to fix prices, allocate customers and rig bids of  international ocean shipping services for roll-on, roll-off cargo, such as cars  and trucks, to and from the United States and elsewhere, the Department of  Justice announced today.

According to a one-count felony charge filed today in U.S. District Court  for the District of Maryland in Baltimore, CSAV engaged in a conspiracy to  suppress and eliminate competition by allocating customers and routes, rigging  bids and fixing prices for the sale of international ocean shipping services of  roll-on, roll-off cargo to and from the United States and elsewhere, including  the Port of Baltimore.  CSAV participated  in the conspiracy from at least January 2000 to September 2012.  CSAV has also agreed to cooperate with the department’s  ongoing antitrust investigation.  The  plea agreement is subject to court approval.

Roll-on, roll-off cargo is non-containerized cargo that can be both  rolled onto and rolled off of an ocean-going vessel.  Examples of this cargo include new and used cars  and trucks, as well as construction, mining and agricultural equipment.

“Today’s charges  are the first to be filed in the Antitrust Division’s investigation into bid  rigging and price fixing of ocean shipping services,” said Bill Baer, Assistant  Attorney General in charge of the Department of Justice’s Antitrust Division.  “Because of the growth in the automobile ocean  shipping industry over the past 40 years, the conspiracy substantially affected  interstate and foreign commerce.  Prosecuting international price-fixing  conspiracies remains a top priority for the division.”

According to the  charge, CSAV and its co-conspirators carried out the conspiracy by, among other  things, agreeing – during meetings and communications – on prices, allocating  customers, agreeing to refrain from bidding against one another and exchanging  customer pricing information.  The  department said the companies then charged fees in accordance with those  agreements for international ocean shipping services for certain roll-on,  roll-off cargo to and from the United States and elsewhere at collusive and  non-competitive prices.

CSAV is charged with price fixing in violation of the Sherman Act,  which carries a maximum penalty of a $100 million criminal fine for  corporations.  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.

Today’s charge is the result of an ongoing federal antitrust  investigation into price fixing, bid rigging, and other anticompetitive conduct  in the international ocean shipping industry, which is being conducted by the  Antitrust Division’s National Criminal Enforcement Section and the FBI’s  Baltimore Field Office, along with assistance from the U.S. Customs and Border  Protection, Office of Internal Affairs, Washington Field Office/Special  Investigations Unit.   Anyone with information in connection with  this investigation is urged to call the Antitrust Division’s National Criminal  Enforcement Section at 202-307-6694, visit www.justice.gov/atr/contact/newcase.html,  or call the FBI’s Baltimore Field Office at 410-265-8080.

Former Employee of Florida Airline Fuel Supply Company Pleads Guilty to Obstructing Federal Investigation

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A former employee of a Florida-based airline fuel supply service company pleaded guilty today to obstructing an investigation into fraud and anticompetitive conduct in the airline charter services industry, the Department of Justice announced.

Craig Perez, a former employee of Aviation Fuel International Inc. (AFI), pleaded guilty to a felony charge filed today in U.S. District Court for the Western District of Missouri in Kansas City.  The charge against Perez stems from the U.S. Department of Defense’s Office of the Inspector General’s Defense Criminal Investigative Service (DCIS)’s investigation into kickback payments made by AFI and its employees to Wayne Kepple, the former vice president of ground operations for Ryan International Airlines.

Ryan provided air passenger and cargo services for corporations, private individuals and the U.S. government, including the U.S. Department of Defense, the U.S. Department of Homeland Security and the U.S. Marshals Service.

According to court documents, Perez worked for AFI from June 2007 until March 2008 and was vice president of services.  During that time, Kepple received kickback payments from AFI on aviation fuel, services and equipment sold by AFI to Ryan.  In November 2011, a federal agent with DCIS contacted Perez to interview him in relation to its investigation of AFI.  After speaking with the federal agent, and with full knowledge of the purpose of the interview, Perez knowingly destroyed relevant files from his laptop computer relating to his employment at AFI with the intent to impede, obstruct and influence the investigation of AFI and his involvement in that conduct.

“The Antitrust Division will hold accountable those who attempt to conceal their illegal actions and obstruct a government investigation ,” said Bill Baer, Assistant Attorney General in charge of the Department of Justice’s Antitrust Division.  “Destroying evidence in an attempt to undermine a federal investigation is a crime the division takes very seriously.”

Perez is charged with obstruction of justice, which carries a maximum penalty of 20 years in prison and a $250,000 criminal fine for individuals.  He has agreed to cooperate in the ongoing investigation.

Today’s plea is the fifth to arise out of the Antitrust Division’s ongoing investigation into fraud and anticompetitive conduct in the airline charter services industry.  The other four individuals have been ordered to serve sentences ranging from 16 to 87 months in prison and to pay more than $580,000 in restitution.  A sixth individual, Sean Wagner, the owner and operator of AFI, and AFI itself were indicted on Aug. 13, 2013.

The investigation is being conducted by the Antitrust Division’s National Criminal Enforcement Section and the U.S. Department of Defense’s Office of Inspector General’s Defense Criminal Investigative Service, headed by Special Agent in Charge John F. Khin.  Anyone with information concerning anticompetitive conduct in the airline charter services industry is urged to call the Antitrust Division’s National Criminal Enforcement Section at 202-307-6694 or visit www.justice.gov/atr/contact/newcase.htm.

Former Denso Corp. Executive Agrees to Plead Guilty to Obstructing Automotive Parts Investigation

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A former executive of Japan-based Denso Corp. has agreed to plead guilty to obstruction of justice charges in connection with the Antitrust Division’s investigation into a conspiracy to fix the prices of heater control panels installed in cars sold in the United States and elsewhere, the Department of Justice announced today.  The executive has also agreed to serve one year and one day in a U.S. prison.

A one-count felony charge was filed today in U.S. District Court for the Eastern District of Michigan in Detroit against Kazuaki Fujitani, a former director of Denso Corp. in Japan.  According to the charge, Fujitani, who was general manager of the Toyota Sales Division at the time of the offense, deleted numerous e-mails and electronic documents in February and March 2010 upon learning that the FBI had executed a search warrant on Denso’s U.S. subsidiary.  The deleted documents contained communications between Denso and one or more of its competitors regarding requests for price quotation made by Toyota for heater control panels for the Toyota Avalon.  The plea agreement is subject to court approval.

“Today’s charge demonstrates the Antitrust Division’s commitment to protecting the integrity of grand jury investigations,” said Brent Snyder, Deputy Assistant Attorney General of the Antitrust Division’s criminal enforcement program.  “The division will vigorously prosecute individuals who destroy evidence in an attempt to conceal their participation in illegal conspiracies.”

In March 2012, Denso pleaded guilty and was sentenced to pay a $78 million criminal fine for its role in conspiracies to fix the prices of heater control panels and electronic control units.

Including Fujitani, 29 individuals have been charged in the department’s ongoing investigation into price fixing and bid rigging in the auto parts industry.  Additionally, 26 companies have pleaded guilty or agreed to plead guilty and have agreed to pay a total of over $2.25 billion in fines.

Fujitani is charged with obstruction of justice, which carries a maximum penalty of 20 years in prison and a criminal fine of $250,000 for individuals.

Today’s charge arose from an ongoing federal antitrust investigation into price fixing, bid rigging and other anticompetitive conduct in the automotive parts industry, which is being conducted by each of the Antitrust Division’s criminal enforcement sections and the FBI.  Today’s charge was brought by the National Criminal Enforcement Section and the San Francisco Office of the Antitrust Division, with the assistance of the Detroit Field Office of the FBI.  Anyone with information on price fixing, bid rigging and other anticompetitive conduct related to other products in the automotive parts industry should contact the Antitrust Division’s Citizen Complaint Center at 1-888-647-3258, visit  www.justice.gov/atr/contact/newcase.html, or call the Detroit Field Office of the FBI at 313-965-2323.

AISAN INDUSTRY CO. LTD. AGREES TO PLEAD GUILTY TO PRICE FIXING ON AUTOMOBILE PARTS INSTALLED IN U.S. CARS

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WASHINGTON — Aisan Industry Co. Ltd., an Obu, Japan-based company, has agreed to  plead guilty and to pay a criminal fine of $6.86 million for its role in a  price-fixing conspiracy involving electronic  throttle bodies sold in the United States and elsewhere, the Department of  Justice announced today.

According to a one-count felony charge filed  today in U.S. District Court for the Eastern District of Michigan in Detroit, Aisan engaged in a  conspiracy to rig bids for, and to fix, stabilize and maintain the prices of  electronic throttle bodies sold to Nissan Motor Co. Ltd. and certain of its  subsidiaries in the United States and elsewhere.  In addition to the criminal fine, Aisan has also agreed to  cooperate with the department’s ongoing auto parts investigations. The plea agreement is  subject to court approval.
“The Antitrust Division will continue to hold companies accountable for  anticompetitive conduct that impacts the automobile industry in the United  States,” said Brent Snyder, Deputy Assistant Attorney General of the Antitrust  Division’s criminal enforcement program.  “To date, 25 companies have been charged as  part of the Antitrust Division’s ongoing auto parts investigation.”

According to the charges, Aisan and its co-conspirators carried out the price-fixing conspiracy  through meetings and conversations in which they discussed and agreed upon bids  and price quotations for electronic throttle bodies.  Aisan’s  involvement in the conspiracy to fix prices of electronic  throttle bodies lasted from at least as early as October 2003 until at  least February 2010.

Aisan manufactures and sells automotive electronic throttle bodies,  which are part of the air intake system in an engine that controls the amount  of air flowing into an engine’s combustion chamber.  By controlling air flow within an engine, the  electronic throttle body controls engine speed.

Including Aisan, 25 corporations have pleaded guilty or agreed to plead  guilty in the department’s investigation into price fixing and bid rigging in  the auto parts industry.  The companies  have agreed to pay a total of more than $1.8 billion in fines.  Additionally, 28 individuals have been charged.

Aisan is charged with price fixing in violation of the Sherman Act,  which carries a maximum penalty of a $100 million criminal fine for  corporations.  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.

Today’s prosecution arose from an ongoing federal antitrust  investigation into price fixing, bid rigging and other anticompetitive conduct  in the automotive parts industry, which is being conducted by each of the  Antitrust Division’s criminal enforcement sections and the FBI.  Today’s charges were brought by the San  Francisco Office of the Antitrust Division with assistance provided by the  National Criminal Enforcement Section of the Antitrust Division, the Detroit  Field Office of the FBI, and the FBI headquarters’ National Criminal Enforcement Section.  Anyone with information concerning  this investigation should contact the Antitrust Division’s Citizen Complaint  Center at 1-888-647-3258, visit www.justice.gov/atr/contact/newcase.html  or call the Detroit Field Office of the FBI at  313-965-2323.

FORMER PRESIDENT AND VICE PRESIDENT OF DIAMOND ELECTRIC AGREE TO PLEAD GUILTY TO PARTICIPATING IN AUTO PARTS PRICE-FIXING CONSPIRACY

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WASHINGTON — The former president and vice president of Osaka,  Japan-based Diamond Electric Mfg. Co. Ltd. have agreed to plead guilty for  their participation in a global conspiracy to fix prices of ignition coils  installed in cars sold in the United States and elsewhere, the Department of Justice  announced today.  Ignition coils are part  of a car’s fuel ignition system and release electric energy suddenly to ignite  a fuel mixture.

Separate  felony charges were filed today in U.S. District Court for the Eastern District  of Michigan in Detroit against Shigehiko Ikenaga and Tatsuo Ikenaga.  According to court documents, from at least as  early as July 2003 until at least February 2010, the former executives participated  in a conspiracy to rig bids for, and to fix, stabilize and maintain the prices  of ignition coils sold to automotive manufacturers for installation in vehicles  manufactured in the United States and elsewhere.  The automotive manufacturers included Ford  Motor Co., Toyota Motor Corp. and Fuji Heavy Industries Ltd. – more commonly  known by its brand name, Subaru – and certain of their subsidiaries.

Shigehiko  Ikenaga, president of Diamond Electric during the relevant period, agreed to  serve 16 months in a U.S. prison.  Tatsuo  Ikenaga, Diamond Electric’s managing director, and then vice president  beginning in 2008, agreed to serve 13 months in a U.S. prison.  Tatsuo Ikenaga also simultaneously served as president  of Diamond Electric’s U.S. subsidiary during the relevant period.  Additionally, the former executives have each  agreed to pay a $5,000 criminal fine and to cooperate with the department’s  ongoing investigation.  Each of the  Ikenaga’s plea agreements is subject to court approval.  On Sept. 10, 2013, Diamond Electric pleaded  guilty for its involvement in the conspiracy and was fined $19 million.

“The two former executives charged  today once again demonstrate the Antitrust Division’s vigorous commitment to  hold individuals accountable for engaging in anticompetitive conduct,” said  Brent Snyder, Deputy Assistant Attorney General for the Antitrust Division’s  criminal enforcement program.  “The division’s  ongoing investigation has resulted in more than two dozen executives serving  prison time for their participation in illegal, auto parts conspiracies.”

Diamond  Electric is a manufacturer of ignition coils and was engaged in the sale of  ignition coils in the United States and elsewhere. According to the charges, the  Diamond Electric executives and their co-conspirators carried out the  conspiracy by, among other things, agreeing during meetings and communications  to coordinate bids submitted to automobile manufacturers.

Each  executive is charged with price fixing and bid rigging in violation of the  Sherman Act, which carries a maximum penalty of 10 years in prison and a $1  million criminal fine for individuals.  The  maximum fine for an individual 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.

Including  today’s charges, 28 individuals and 24 companies have been charged in the  government’s ongoing investigation into price fixing and bid rigging in the  auto parts industry.

Today’s charges  arose from an ongoing federal antitrust investigation into price fixing, bid  rigging and other anticompetitive conduct in the automotive parts industry,  which is being conducted by each of the Antitrust Division’s criminal  enforcement sections and the FBI.  Today’s pleas are the result of the National  Criminal Enforcement Section with the assistance of the Detroit Field Office of  the FBI.  Anyone with information on  price fixing, bid rigging and other anticompetitive conduct related to other  products in the automotive parts industry should contact the Antitrust  Division’s Citizen Complaint Center at 1-888-647-3258, visit www.justice.gov/atr/contact/newcase.html,  or call the Detroit Field Office of the FBI at 313-965-2323.

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THREE TAKATA CORP. EXECUTIVES AGREE TO PLEAD GUILTY TO PARTICIPATING IN GLOBAL SEATBELT PRICE FIXING CONSPIRACY

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WASHINGTON — Three high-level executives of Tokyo-based Takata Corp. have  agreed to plead guilty for their participation in a conspiracy to fix prices of  seatbelts installed in cars sold in the United States, the Department of  Justice announced today.  The executives  have also agreed to serve time in a U.S. prison.

According to the one-count felony  charges filed separately against each of the executives today in the U.S.  District Court for the Eastern District of Michigan in Detroit, Yasuhiko Ueno, Saburo  Imamiya and Yoshinobu Fujino participated in a conspiracy to rig bids for, and  to fix, stabilize and maintain the prices of seatbelts sold to Toyota Motor  Corp., Honda Motor Co. Ltd., Nissan Motor Co. Ltd., Fuji Heavy Industries Inc.  – more commonly known by its brand name, Subaru – and Mazda Motor Corp. in the  United States and elsewhere.  The three  executives have agreed to serve prison sentences ranging from 14 to 19 months,  and to cooperate with the department’s ongoing investigation.

Ueno was  employed by Takata’s Auburn Hills, Mich.-based U.S. subsidiary, TK Holdings  Inc., in the United States as senior vice president for sales for Japanese manufacturers  from at least January 2006 through December 2007.  From early 2008 through June 2009, Ueno was  employed by Takata in Japan as deputy division director of the customer  relations division, and as director of the customer relations division from  June 2009 through at least February 2011.  According to the charge, Ueno’s involvement in  the conspiracy lasted from at least as early as January 2006 until at least  February 2011.  Ueno has agreed to serve 19  months in prison and to pay a $20,000 criminal fine.

Imamiya was  employed by Takata in Japan as general manager for Toyota sales from at least  January 2008 to July 2009, and as director of the customer relations division from  July 2009 through at least February 2011.  According to the charge, Imamiya’s involvement  in the conspiracy lasted from at least as early as January 2008 until at least  February 2011.  Imamiya has agreed to  serve 16 months in prison and to pay a $20,000 criminal fine.

Fujino was  employed by Takata in Japan as the manager of the Toyota group within the  customer relations division from at least January 2004 through June 2005, and  as the manager of the Mazda group within the customer relations division from  June 2005 through the end of 2007.  From  the beginning of 2008 through at least February 2011, Fujino was employed by TK  Holdings in the United States as assistant vice president for sales for Japanese  manufacturers.  According to the charge,  Fujino’s involvement in the conspiracy lasted from at least as early as January  2004 until at least February 2011.  Fujino  has agreed to serve 14 months in prison and to pay a $20,000 criminal fine.

Takata  Corp. is a manufacturer of automotive occupant safety systems, including  seatbelts.  Seatbelts are safety strap restraints designed to secure an  occupant in position in a vehicle in the event of an accident, and may be sold  bundled with related parts according to the needs of the automobile  manufacturer.  According to the  charges, the Takata executives and their co-conspirators carried out the  conspiracy by, among other things, agreeing during meetings and communications  to coordinate bids submitted to the automobile manufacturers.

On Sept. 26, 2013, Gary Walker, an  executive of TK Holdings Inc., agreed to plead guilty and serve a sentence of  14 months in prison for his involvement in the same conspiracy.  On Oct. 9, 2013, Takata Corp. agreed to plead  guilty for its involvement in the conspiracy and to pay a criminal fine of  $71.3 million.

Each of the  executives is charged with price fixing in violation of the Sherman Act, which  carries a maximum penalty of 10 years in prison and a $1 million criminal fine for  individuals.  The maximum fine for an  individual 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.

Including today’s charges, 24  individuals have been charged in the department’s investigation into price  fixing and bid rigging in the auto parts industry.  Additionally, 21 corporations have been  charged.

The current prosecution arose from an ongoing federal antitrust investigation into price fixing, bid rigging and other anticompetitive conduct in the automotive parts industry, which is being conducted by each of the Antitrust Division’s criminal enforcement sections and the FBI.  Today’s charges were brought by the National Criminal Enforcement Section, with the assistance of the Detroit, Michigan, Field Office of the FBI.  Anyone with information concerning the focus of this investigation should contact the Antitrust Division’s Citizen Complaint Center at 1-888-647-3258, visit www.justice.gov/atr/contact/newcase.html, or call the Detroit Field Office of the FBI at 313-965-2323.

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FLORIDA AIRLINE FUEL SUPPLY COMPANY AND ITS OWNER INDICTED FOR ROLE IN SCHEME TO DEFRAUD ILLINOIS-BASED RYAN INTERNATIONAL AIRLINES

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WASHINGTON — A Florida-based airline fuel supply service company and its former owner and operator were indicted yesterday on charges of participating in a scheme to defraud Illinois-based Ryan International Airlines, the Department of Justice announced.

A federal grand jury in the U.S. District Court for the Southern District of Florida in West Palm Beach, Fla., returned an indictment against Sean E. Wagner and his company Aviation Fuel International Inc. (AFI), an airline fuel supply company.  The indictment alleges that Wagner and AFI participated in a conspiracy to defraud Ryan, a charter airline company based in Rockford, Ill., by making kickback payments to Wayne Kepple, a former vice president of ground operations for Ryan, in exchange for awarding business to AFI. Wagner was arrested on July 19, 2013, in Weston, Fla., on a one-count criminal complaint in connection with these charges.

Ryan provided air passenger and cargo services for corporations, private individuals and the U.S. government – including the U.S. Department of Defense and the U.S. Department of Homeland Security.

The indictment alleges, among other things, that from at least as early as December 2005 through at least August 2009, Wagner, AFI and others made kickback payments totaling more than $200,000, in the form of checks, wire transfers, cash and gift cards, to Kepple while working at Ryan.

“The conspirators traded contracts for kickbacks and took affirmative steps to hide their illegal scheme, including wiring payments to personal bank accounts and making secret cash payments,” said Bill Baer, Assistant Attorney General in charge of the Department of Justice’s Antitrust Division.  “The division will continue to aggressively prosecute companies and individuals that seek to defraud the government and U.S. taxpayers by thwarting the competitive process.”

Wagner and AFI are charged with one count of conspiracy to commit wire fraud and honest services fraud, as well as two counts of wire fraud and two counts of mail fraud.  Each count carries a maximum sentence of 20 years in prison and a $250,000 criminal fine for individuals and a $500,000 criminal fine for corporations.  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 amount is greater than the statutory maximum fine.

As a result of this ongoing investigation, four individuals have pleaded guilty to date. Three of the individuals have been ordered to serve sentences ranging from 16 to 24 months in prison and to pay more than $220,000 in restitution.  The fourth individual, Kepple, pleaded guilty and is currently awaiting sentencing.

The charges are the result of an investigation being conducted by the Antitrust Division’s National Criminal Enforcement Section and the U.S. Department of Defense’s Office of Inspector General with assistance from the U.S. Attorney’s Office for the Southern District of Florida.

FORMER OWNER OF TWO FLORIDA AIRLINE FUEL SUPPLY COMPANIES CHARGED FOR ROLE IN SCHEME TO DEFRAUD ILLINOIS-BASED RYAN INTERNATIONAL AIRLINES

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WASHINGTON — A former owner and operator of two Florida-based  airline fuel supply service companies made his initial appearance today in the U.S.  District Court for the Southern District of Florida in West Palm Beach on  charges of participating in a scheme to defraud Illinois-based Ryan International Airlines, the Department of Justice announced.

Sean E. Wagner was arrested on  July 19, 2013, in Weston, Fla., on a one-count criminal complaint to commit  wire fraud and honest services fraud relating to a scheme to defraud Ryan, a charter  airline company based in Rockford, Ill.  At today’s hearing, the department said that Wagner  was arrested after there were indications that he was a flight risk.

The  criminal complaint alleges that Wagner participated in a conspiracy to defraud  Ryan by making kickback payments to Wayne Kepple, the former vice president of  ground operations for Ryan in charge of contracting with providers of goods and  services on behalf of the company.  In  exchange, Kepple awarded business to Wagner’s fuel supply service companies. According  to the criminal complaint, from at least as early as December 2005 through at  least August 2009, Wagner, his companies, and others made kickback payments  totaling more than $200,000, in the form of checks, wire transfers, gift cards and  cash, to Kepple while working at Ryan.

Ryan provided air passenger and  cargo services for corporations, private individuals, and the U.S. government,  including the U.S. Department of Defense, the U.S. Department of Homeland Security and the U.S. Marshals Service.

“The Antitrust Division will take  enforcement action against those who subvert the competitive process by trading  contracts for kickbacks, especially where the U.S. government is being  victimized,” said Bill Baer, Assistant Attorney General in charge of the  Department of Justice’s Antitrust Division. “The Antitrust Division will hold  accountable those who seek to defraud the government and U.S. taxpayers.”

Wagner is  charged with one count of conspiracy to commit wire fraud and honest services  fraud, which carries a maximum sentence of 20 years in prison and a $250,000  criminal 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 amount is greater than the statutory maximum fine.

As a result  of this ongoing investigation, four individuals have pleaded guilty to date. Three  of the individuals have been ordered to serve sentences ranging from 16 to 24  months in prison and to pay more than $220,000 in restitution. The fourth  individual, Wayne Kepple, pleaded guilty and is awaiting sentencing.

This charge  is the result of an investigation being conducted by the Antitrust Division’s  National Criminal Enforcement Section and the U.S. Department of Defense’s  Office of Inspector General, with assistance from the U.S. Attorney’s Office  for the Southern District of Florida.

Two Japanese Freight Forwarding Companies Agree To Plead Guilty To Criminal Price-Fixing Charges

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Companies Agree to Pay a Total of $18.9 Million in Criminal Fines

WASHINGTON — Two Japanese air freight forwarding companies have agreed to plead guilty and to pay criminal fines totaling $18.9 million for their roles in a conspiracy to fix certain fees in connection with the provision of air freight forwarding services for air cargo shipments from Japan to the United States, the Department of Justice announced today. “K” Line Logistics Ltd. has agreed to pay a $3,507,246 criminal fine and Yusen Logistics Co. Ltd. has agreed to pay a $15,428,207 criminal fine.

Including today’s charges, as a result of this investigation, 16 companies have either pleaded guilty or agreed to plead guilty and have agreed to pay criminal fines totaling more than $120 million.

“Consumers were forced to pay higher prices on the goods they buy every day as a result of the noncompetitive and collusive service fees charged by these companies,” said Bill Baer, Assistant Attorney General in charge of the Department of Justice’s Antitrust Division. “Prosecuting these kinds of global, price-fixing conspiracies continues to be a top priority of the Antitrust Division.”

Freight forwarders manage the domestic and international delivery of cargo for customers by receiving, packaging, preparing and warehousing cargo freight, arranging for cargo shipment through transportation providers such as air carriers, preparing shipment documentation and providing related ancillary services.

According to charges filed separately today in the U.S. District Court for the District of Columbia, “K” Line Logistics and Yusen Logistics engaged in a conspiracy to fix and to impose certain freight forwarding service fees, including fuel surcharges and various security fees, charged to customers for services provided in connection with air freight forwarding shipments of cargo shipped by air from Japan to the United States from about September 2002 until at least November 2007.

According to the charges, the companies carried out the conspiracy by, among other things, agreeing during meetings and discussions to coordinate and impose certain freight forwarding service fees and charges on customers purchasing freight forwarding services for cargo shipped by air from Japan to the United States. The department said the companies levied freight forwarding service fees in accordance with the agreements reached and engaged in meetings and discussions for the purpose of monitoring and enforcing adherence to the agreed-upon freight forwarding service fees.

Each company is charged with price fixing in violation of the Sherman Act, which carries a maximum $100 million fine for corporations. 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.

Today’s charges are the result of a joint investigation being conducted by the Antitrust Division’s National Criminal Enforcement Section, the FBI’s Washington Field Office and the Department of Commerce’s Office of Inspector General. Anyone with information concerning the price fixing or other anticompetitive conduct in the freight forwarding industry is urged to call the Antitrust Division’s National Criminal Enforcement Section at 202-307-6694 or visit www.justice.gov/atr/contract/newcase.htm or call the FBI’s Washington Field Office at 202-278-2000.