K-Line Executive Sentenced to 18-Months in U.S. Prison

K-Line car carrier, Photo credit: K-Line
K-Line car carrier, Photo credit: K-Line

Hiroshige Tanioka, an executive of Japanese shipping company Kawasaki Kisen Kaisha Ltd, aka K-Line, pleaded guilty last week and was sentenced to 18 months in a U.S. prison for his involvement in a conspiracy to fix prices, allocate customers and rig bids of international ocean shipping services for roll-on, roll-off cargo, such as cars and trucks, to and from the United States and elsewhere.

The Department of Justice says Tanioka was K-Line’s General Manager of their car carrier division and had, over a 14 year period between 1998 and 2014, “conspired to allocate customers and routes, rig bids and fix prices for the sale of international ocean shipments of roll-on, roll-off cargo to and from the United States and elsewhere, including the Port of Baltimore.”

“For more than a decade this conspiracy has raised the cost of importing cars and trucks into the United States,” said Assistant Attorney General Bill Baer for the Department of Justice’s Antitrust Division.

The DOJ notes this sentence is the first to be imposed against an individual in the division’s ocean shipping investigation. Previously, three corporations have agreed to plead guilty and to pay criminal fines totaling more than $136 million, including Tanioka’s employer K-Line, which was sentenced to pay a criminal fine of $67.7 million in November 2014.

Pursuant to the plea agreement, Tanioka was sentenced to serve an 18-month prison term and pay a $20,000 criminal fine for his participation in the conspiracy. In addition, Tanioka has agreed to assist the department in its ongoing investigation into the ocean shipping industry.

The DOJ says U.S. federal investigators including the FBI and U.S. Customs and Border Protection are continuing to peel back the layers with their investigation into price fixing, bid rigging and other anticompetitive conduct in the international roll-on, roll-off ocean shipping industry.