Horizon Lines to pay $1.5 million settlement in price-fixing case

03/07/2014 2:47 PM

03/07/2014 10:46 PM

Charlotte-based shipping company Horizon Lines said Friday it has agreed to pay a $1.5 million settlement in a price-fixing case brought by the federal government, the company’s most recent outlay in an investigation stretching back to 2008.

The company was accused of fixing prices on routes between the U.S. and Puerto Rico. In 2011, Horizon agreed to pay a $45 million fine and plead guilty in the Justice Department case that sent three company executives to prison in 2008.

The settlement announced Friday resolves complaints from the U.S. departments of agriculture, defense and the postal service. As a result of collusion between Horizon and Sea Star Line, a Jacksonville, Fla.-based shipping company, the government was overcharged for shipping mail, food and other products, according to the complaint.

Sea Star agreed to pay a $1.9 million penalty in the case, the Justice Department said. A former Sea Star executive, William Stallings, first brought the suit as a whistle-blower, according to the federal government. He’s entitled to receive more than $500,000 from the settlement.

“To carry out the scheme, Horizon executives used personal email accounts to communicate confidential bidding information, thereby enabling Horizon to know the ocean transportation rates that its competitors intended to submit to the United States,” the settlement agreement said. The Justice Department alleged that led to inflated prices from 2002 to 2008.

“Government contractors who seek to profit at the expense of taxpayers will face serious consequences,” said Assistant Attorney General Stuart Delery, in a statement.

A Horizon spokesman did not immediately return a message seeking comment.

Horizon has been reporting improving financial results since 2011, when it warned investors there were “substantial doubt about our ability to continue as a going concern.”

In its most recent financial report, Horizon said it had recorded a $17.7 million loss for the first nine months of its fiscal year, compared with a $76.7 million loss for the same period in the prior year.

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