The Antitrust Division of the US Department of Justice (DOJ) has announced guilty pleas entered by two French executives for their roles in an international cartel in the marine hose market. Marine hose is used to transport oil between tankers and storage facilities. It is estimated that during the conspiracy period hundreds of millions of dollars worth of marine hose was sold worldwide at artificially inflated prices. Major US purchasers included numerous offshore oil extraction companies and the US Navy.

In November, the DOJ filed a one-count felony charge against Christian Caleca and Jacques Cognard, executives of the French company Trelleborg Industrie S.A.S. Each executive agreed to serve 14 months in jail, and to cooperate with the DOJ’s ongoing investigation. In addition, Caleca, president of Trelleborg’s Industrial Fluid Systems business unit, will pay a US$75,000 criminal fine, and Cognard, Trelleborg’s product area manager for oil and marine products, will pay a US$100,000 criminal fine.

In a related action, the DOJ filed criminal charges during the first week of December against three UK executives for their roles in the marine hose conspiracy. The executives included Peter Whittle, the sole proprietor of the UK-based consulting firm PW Consulting (Oil & Marine) Ltd., and Bryan Allison and David Brammar of Dunlop Oil & Marine Ltd. Whittle, Allison and Brammar were charged with discussing the sale of marine hose products during meetings and in correspondence with competitors, and agreeing during those discussions to rig bids, fix prices and allocate customers. Whittle was charged with participating in and facilitating the cartel by circulating information to cartel participants and coordinating prices charged to US customers. The three UK executives were arrested in Houston, Texas on May 2, 2007, following a meeting of the cartel. If convicted, each faces up to 10 years imprisonment and statutory fines of up to US$1 million. The fines could increase to twice the gain derived from the conduct or twice the loss suffered by the victims, if either amount exceeds the statutory maximum.

To date, the investigation into the marine hose price-fixing conspiracy has produced criminal charges against nine executives, all from non-US companies. The investigation is ongoing, and is being conducted jointly by the DOJ, the Defense Criminal Investigative Service of the Department of Defense’s Office of Inspector General, the US Navy Criminal Investigative Service and the FBI.