Frank Peake, the former president of Sea Star Line, a Jacksonville, Fla.-based water shipping company that offers service between the U.S. mainland and Puerto Rico, was sentenced to serve five years in prison
and made to pay a $25,000 criminal fine for his participation in a conspiracy to fix rates and surcharges for freight transported by water between the continental United States and Puerto Rico, the Department of Justice announced today.
Bill Baer, assistant attorney general in charge of Department of Justice’s antitrust division, said the sentence "reflects the serious harm these conspirators inflicted on American consumers."
According to court documents and evidence presented at trial, Peake and his co-conspirators conspired through meetings and other communications to fix, stabilize, and maintain rates and surcharges for Puerto Rico freight services; to allocate customers of Puerto Rico freight services between and among the conspirators; and to rig bids submitted to customers of Puerto Rican freight services.
The government said Peake was involved in the conspiracy from at least late 2005 until at least April 2008.
Previously, the three largest water freight carriers serving routes between the continental United States and Puerto Rico pleaded guilty to price fixing and been ordered to pay more than $46 million in criminal fines for their roles in the conspiracy. Crowley Liner Service was fined $17 million, Horizon Lines was fined $15 million, and Sea Star paid $14.2 million.
Peake's sentence is the longest yet in what the government has said is an ongoing investigation of price fixing and anti-competitive practices in the coastal shipping industry. Five other shipping company executives from Horizon Lines and Sea Star have been ordered to serve prison sentences on charges growing out of the investigation.
Additionally, Thomas Farmer, the former vice president of price and yield management of Crowley Liner Services, was indicted in March for his role in the conspiracy and is scheduled to go to trial in May 2014.