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Virgin May Have Admitted Price Fixing to Avoid Jail, Defense Lawyer Says

Virgin Atlantic Airways Ltd. employees may have decided to make false admissions of conspiring to fix prices with British Airways Plc to avoid the risk of going to prison, a defense lawyer said.

Three former British Airways executives and one current manager are being tried for scheming with Virgin Atlantic Airways to fix fuel surcharges on trans-Atlantic flights. Virgin’s employees gained immunity by admitting their roles in the scheme, under a U.K. policy designed to make it easier for authorities to discover cartels.

Virgin and its employees might not have believed they were taking part in a criminal cartel at the time, and only made admissions to protect themselves and the company from prosecution, Clare Montgomery, a lawyer for one of the former BA executives, said at a London court today. The defendants each face up to five years in prison if found guilty.

“It’s the world turned upside-down. If you say you did nothing wrong, you are at risk of going to prison. If you say you are dishonest, you keep your job, you will not be charged, you do not go to prison,” said Montgomery.

The case is being brought by the Office of Fair Trading, the U.K. antitrust watchdog. Andrew Crawley, British Airways’ head of sales; Martin George, a former board member; Iain Burns, ex-head of communications; and Alan Burnett, former head of U.K. and Ireland sales, are pleading not guilty.

The OFT only offers immunity when a company admits guilt and produces individual employees who confess, she said. If they say it was “just a mistake,” immunity isn’t granted, said Montgomery, who represents George in the case.

If Virgin “had the guts to say they didn’t think they were dishonest, they are running the risk of unpicking their immunity deal,” she said.

The OFT’s policy, which mirrors a U.S. system, has “damaging effects” because it encourages false confessions, Montgomery said.

Virgin Chief Executive Stephen Ridgway and at least two other former Virgin executives were aware of the scheme and will be “important” witnesses in the case, prosecutor Richard Latham said earlier in the trial.

To contact the reporter on this story: James Lumley in London at jlumley1@bloomberg.net.

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