Charlotte-based shipping company Horizon Lines will plead guilty and pay a $45 million fine for its role in a conspiracy to fix prices, the Department of Justice said.
A one-count felony charge, filed Thursday in U.S. District Court for the District of Puerto Rico, accuses Horizon Lines of participating in a scheme to fix rates and surcharges to transport freight over water between the continental U.S. and Puerto Rico from at least as early as May 2002 until at least April 2008, DOJ said.
According to the charge, Horizon Lines and others carried out the conspiracy by agreeing to allocate customers of Puerto Rico freight services and to fix the fees to be charged to purchasers of water transportation of freight.
Under the terms of the plea agreement, which are subject to court approval, Horizon Lines will plead guilty to price-fixing in violation of the Sherman Act. Such a violation carries a maximum fine of $100 million for corporations, DOJ said. The $45 million fine will be paid over five years.
Five former executives will serve prison time for their roles in the conspiracy, DOJ said. On Oct. 20, 2008, three former Horizon Lines executives — R. Kevin Gill, Gregory Glova and Gabriel Serra — and another former shipping executive, Peter Baci, pleaded guilty to a wide-ranging conspiracy to rig bids, fix prices and allocate customers, according to the DOJ, adding that Alexander Chisholm has also pleaded guilty to obstructing the investigation of the conspiracy.
Also Thursday, in a separate announcement, Horizon Lines said its board of directors has named Alex Mandl as chairman and Stephen Fraser as interim president and CEO to succeed Chairman, President and CEO Charles Raymond, who is retiring.