Transportation Industry Investigation Results in Charges for Two Executives and $38 Million Fine of Airline Carrier
On August 26, a Brooklyn, New York, federal Grand Jury returned an indictment charging Joo Ahn Kang and Chung Sik Kwak, each a former vice president of the Americas of Asiana, with conspiring with others to suppress and eliminate competition by fixing fares for passenger transportation services from certain airports in the United States to Korea between January 2000 and February 2006. Mr. Kang and Mr. Kwak, each a citizen and resident of Korea, along with co-conspirators, allegedly carried out the conspiracy by communicating and agreeing on the price of one or more components of the fares charged to passengers who purchased economy class tickets for flights between the United States and Korea.
In a separate case, on August 27, 2010, in United States District Court, Washington, D.C., Northwest Airlines LLC, through Northwest Airlines Cargo, which is no longer in operation, pled guilty to conspiring to fix the cargo rates charged to customers in the United States and elsewhere for international air cargo shipments from at least July 2004 until at least February 2006. The company carried out the conspiracy by agreeing during meetings, conversations and communications on certain components of cargo rates for shipments on routes between the United States and Japan and by levying cargo rates in accordance with the agreements reached. The company was ordered to pay a $38 million criminal fine.
A total of 16 airlines and four executives have pleaded guilty or have agreed to plead guilty in the Justice Department's ongoing air transportation industry price fixing investigation. To date, fines of more than $1.6 billion resulted from this investigation and all of the pleading executives have been sentenced to serve prison time.
This joint investigation is being coordinated by the U.S. Department of Justice Antitrust Division, and is being worked jointly with the Federal Bureau of Investigation and the U.S. Postal Service, Office of Inspector General.
Note: Indictments, informations, and criminal complaints are only accusations by the government, all defendants are presumed innocent unless and until proven guilty.