Two Cargolux officials have agreed to serve 13 months in jail for coordinating surcharges on airfreight shipments to and from the United States in the U.S. Department of Justice’s ongoing investigation into price-fixing.
Former Cargolux CEO Ulrich Ogiermann and Senior Vice President of Sales and Marketing Robert Van de Weg each entered into a plea agreement with the DOJ, with Ogiermann acknowledging participation in the airfreight cartel from as early as October 2001 until at least February 2006; Van de Weg conceded to coordinating prices from as early as December 2003 until at least February 2006. In addition to their prison sentences, both men have been ordered to pay $20,000 in retribution and cooperate with the DOJ’s ongoing investigation.
In a press release, representatives for the Luxembourg-based carrier addressed the scandal and reiterated their remorse. “While expressing its regret for the executives personally, Cargolux acknowledges their decision to plead guilty as a way to finally bring this matter to a controlled close both for them and the company,” the press release stated.
“The charges against Ogiermann and Van de Weg relate to conduct they undertook on behalf of the company and do not allege that they derived any personal benefit from the activities in question,” it continued.
Mark Rosman, who headed up the initial investigation into price-fixing in early 2006 as the former assistant chief of national criminal enforcement of the DOJ’s Antitrust Division, told Air Cargo World that Ogiermann’s and Van de Weg’s 13-month incarcerations appear favorable for both sides.
“For the DOJ, they settle what would likely have been a tough trial,” Rosman said. “For the defendants, they get some certainty in a situation where they could have been acquitted, but could also have spent years in jail had they been convicted.”
Although Rosman admits that the Cargolux executives might get off early for good behavior, he’s confident that they’ll serve a significant portion of the term. “You’re still probably looking at a year,” Rosman told Air Cargo World.
So far, the DOJ has indicted 22 airlines and 21 executives with price-fixing in the airfreight industry. Four additional airline officials are currently serving prison sentences, and more than $1.8 billion in criminal fines have been levied.