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An executive for another shipping company, Jacksonville, Fla.-based Sea Star Lines, also agreed to plead guilty to the same charge, while another Sea Star executive agreed to plead guilty to destroying evidence of the shipping conspiracy, Justice officials said. The charges are the first in an ongoing investigation by the department's Antitrust Division into collusion in the coastal shipping industry.
The former Horizon Lines executives charged with violating federal antitrust laws were Kevin Gill, vice president of marketing; and Gregory Glova, director of refrigerated cargo; and Gabriel Serra, senior vice president and general manager of the Puerto Rico division;
Each was charged with violating the Sherman Act, which carries a maximum sentence of 10 years in prison and $1 million in fines. Under terms of their plea agreements, the executives agreed to serve a jail term determined by the court, pay a $20,000 fine and cooperate with the investigation.
Chuck Raymond, Horizon's president and chief executive, declined comment on the plea agreements today, citing the ongoing investigation. Raymond confirmed that Gill, Glova and Serra are no longer with the company.
The conspiracy began at least as early as May 2002 and continued until as late as this April, Justice officials said. The goal was eliminating competition and raising prices for shipping goods between the mainland U.S. and Puerto Rico. Horizon Lines and a handful of other carriers compete in a market ruled by the Jones Act, a 1920 federal law that limits competition by requiring ships sailing between U.S. ports to be U.S.-owned.
Federal agents raided Horizon's SouthPark-area headquarters in April, serving search warrants and a grand jury subpoena. The Justice Department has charged that "executives sought to eliminate competition and raise prices by agreeing not to compete for one another's customers; agreeing to rig bids submitted to government and commercial buyers; and agreeing to fix the prices of rates, surcharges and other fees charged to customers," officials said in the statement.
Horizon Lines has nearly 1,900 employees, including about 75 in Charlotte. The company had a profit of almost $29 million last year on revenue of $1.2 billion, but in July reported a 25 percent drop in second-quarter profits compared with the same period last year.
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