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Sea Star Pleads Guilty to Price-Fixing Conspiracy in Coastal Freight Services Industry

Tuesday, November 22, 2011
Alexandra Kay | Bloomberg LawPress Release, U.S. Federal Trade Commission, Florida-Based Sea Star Line LLC Agrees to Plead Guilty and its Former President is Indicted for Price Fixing on Coastal Freight Services Between the Continental United States and Puerto Rico The U.S. Federal Trade Commission recently announced that Sea Star Line LLC agreed to plead guilty to charges that it conspired to fix prices in the coastal water freight transportation industry. Under the plea agreement, which is subject to court approval, Sea Star agreed to pay a $14.2 million criminal fine. Sea Star's former president, Frank Peake, was also indicted by a federal grand jury for his role in the conspiracy. Sea Star transports cargo shipments on scheduled ocean voyages between the continental United States and Puerto Rico. According to the charges, Sea Star conspired to fix rates and surcharges for water transportation of freight between the continental United States and Puerto Rico from May 2002 until at least April 2008. Peake was charged with participating in the conspiracy from at least late 2004 until April 2008. The charges arose from an ongoing federal antitrust investigation into price fixing, bid rigging, and other anticompetitive behavior in the coastal water freight transportation industry. In connection with the investigation, on April 30, 2011, Horizon Lines LLC was sentenced to pay a $15 million criminal fine. Five former shipping executives from Sea Star and Horizon Lines have also been sentenced to pay a total of nearly $85,000 in criminal fines and to serve more than 11 years in prison, collectively. Under Section 1 of the Sherman Act, 15 U.S.C. § 1, the price-fixing conspiracy charges for a corporation carry a maximum penalty of $100 million, while the penalty for an individual can be up to $1 million and 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, if either amount exceeds the statutory fine. DisclaimerThis document and any discussions set forth herein are for informational purposes only, and should not be construed as legal advice, which has to be addressed to particular facts and circumstances involved in any given situation. Review or use of the document and any discussions does not create an attorney-client relationship with the author or publisher. To the extent that this document may contain suggested provisions, they will require modification to suit a particular transaction, jurisdiction or situation. Please consult with an attorney with the appropriate level of experience if you have any questions. Any tax information contained in the document or discussions is not intended to be used, and cannot be used, for purposes of avoiding penalties imposed under the United States Internal Revenue Code. Any opinions expressed are those of the author. The Bureau of National Affairs, Inc. and its affiliated entities do not take responsibility for the content in this document or discussions and do not make any representation or warranty as to their completeness or accuracy.©2014 The Bureau of National Affairs, Inc. All rights reserved. Bloomberg Law Reports ® is a registered trademark and service mark of The Bureau of National Affairs, Inc.

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