Sea Star Line LLC to Pay $14.2M Fine for Fixing Coastal Freight Prices
The Justice Department has announced that Sea Star Line LLC, based in Florida, has agreed to plead guilty and to pay a $14.2 million criminal fine for its role in a conspiracy to fix prices in the coastal water freight transportation industry. Additionally, Frank Peake, the former president of Sea Star Line was indicted for his role in the same conspiracy.
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Conspired to Fix Rates & Surcharges for Freight Between U.S. & Puerto Rico
Sea Star Line transports a variety of cargo shipments, such as heavy equipment, perishable food items, medicines and consumer goods, on scheduled ocean voyages between the continental U.S. and Puerto Rico. Sea Star Line allegedly engaged in a conspiracy to fix rates and surcharges for water transportation of freight between the continental U.S. and Puerto Rico from as early as May 2002, until at least April 2008. In the same district, Peake allegedly participated in the conspiracy from at least as early as late 2005, until at least April 2008.
Sold Freight Services at Collusive, Noncompetitive Rates
According to the court documents, Sea Star Line, Peake and co-conspirators carried out the conspiracy by agreeing during meetings and communications to allocate customers of Puerto Rico freight services and to rig bids and fix the rates and surcharges to be charged to purchasers of water transportation of freight between the continental U.S. and Puerto Rico. The Justice Department said that Sea Star Line, Peake and co-conspirators also engaged in meetings for the purpose of monitoring and enforcing adherence to the agreed-upon rates and sold Puerto Rico freight services at collusive and noncompetitive rates.
Horizon Lines Sentenced to Pay $15M in April 2011 in Same Investigation
In addition to these charges and as a result of this investigation, in April 2011 Horizon Lines LLC was sentenced to pay a $15 million criminal fine, and five former shipping executives from both Sea Star Line and Horizon Lines have been sentenced to pay a total of nearly $85,000 in criminal fines and to serve more than 11 years in prison, collectively.
(See ITT's Online Archives 11022522 for summary of Horizon Lines' agreeing to plead guilty and to pay a $45 million criminal fine. of a federal court reducing Horizon Line's fine for price fixing to $15 million.
See ITT's Online Archives 11051614 for summary of a federal court reducing Horizon Lines' fine from $45 million to $15 million.)