K Line Exec Jailed for Price-fixing Conspiracy

Toru Otoda, a Japanese shipping executive at Kawasaki Kisen Kaisha Ltd (K Line), pleaded guilty on Thursday to price-fixing and bid-rigging the sale of international shipments of ro-ro cargo to and from the U.S. and other countries. He was sentenced to an 18-month prison term and fined $20,000.

Otoda is the third K Line executive to be sentenced to prison time for a conspiracy that began in February 1997. He pleaded guilty to the charges of coordinating with executives from other companies to divvy up clients and adjust shipping prices for cars to and from the U.S. Otoda is reported to have been part of the conspiracy from November 2010 through September 2012.

Otoda was charged under the Sherman Act, which was put in place to prevent the artificial adjustment of prices by limiting trade or supply, and nefarious dealings intended to produce monopoly. The Act imposes criminal penalties of up to 10 years imprisonment and $1 million in fines, and can be increased to twice the amount the conspirators gained from the criminal activities or twice the money victims of the crime lost if either is more than $100 million.

Otoda’s sentence is the fourth in the Department of Justice Antitrust Division’s ocean shipping investigation, which is being conducted by the Antitrust Division's Washington Criminal I Section and the FBI's Baltimore Field Office. Three corporations have pleaded guilty and agreed to pay a total of more than $136 million, with K Line paying $67.7 of the criminal fines.

According to Assistant Attorney General Bill Baer of the Antitrust Division, Otoda’s sentence is part of the Division’s commitment to enforcing accountability on executives who conspire to fix ocean freight prices.

Otoda and K Line have agreed to assist the Division’s ongoing investigation in the shipping industry.