Former Executive Of
Cielos Airlines Pleads Guilty To Fixing Fuel Surcharge Rates
By Mike Mitchell
December 1, 2011 - A former executive of a Peruvian
airline pleaded guilty on Wednesday for his role in a
conspiracy to fix surcharges on air cargo shipments from
the United States to South and Central America following
Hurricanes Katrina and Rita, the Department of Justice
George Gonzalez, former chief commercial officer of
Cielos Airlines, a Peruvian air cargo carrier, pleaded
guilty on Wednesday in the Southern District of Florida
to a one count charge of price fixing.
Oct. 28, 2010, Gonzalez and three other former airline
executives were charged in Miami with conspiring to
suppress and eliminate competition by agreeing to impose
an increase to their fuel surcharges on air cargo
shipped from the United States to locations in South and
indictment charged the executives with participating in the
conspiracy beginning in or around late September 2005 until at
least November 2005. Air cargo carriers transport a variety of
cargo shipments, such as heavy equipment, perishable commodities
and consumer goods, on scheduled international flights.
19, 2011, two of the other indicted former airline executives
pleaded guilty to the charge. Guillermo ?Willy? Cabeza, former
president of Arrow Air, a Miami-based air cargo carrier, and
Luis Juan Soto, former president of South Winds Cargo, a
Miami-based air cargo carrier, pleaded guilty to the charge and
are awaiting sentencing. In connection with their pleas,
Gonzalez, Cabeza and Soto have each agreed to cooperate with the
department in its investigation and to pay a criminal fine.
Cabeza and Soto pleaded guilty to price fixing in violation of
the Sherman Act, which carries a maximum $1 million fine and up
to 10 years in prison. 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.
A total of 22 airlines and 21 executives, including Gonzalez, Cabeza and Soto, have been charged in the Justice Department?s ongoing investigation into price fixing in the air transportation industry. To date, more than $1.8 billion in criminal fines have been imposed and four executives have been sentenced to serve prison time.
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