Author Archives: Brad Geyer

3C’s- Motorola Mobility and the FTAIA–Update

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Motorola Mobility’s Petition for En Banc Review

This news is a bit dated, but on December 17, 2014 Motorola Mobility petitioned the Seventh Circuit for an en banc hearing of its price-fixing damages case against AU Optronics and other liquid-crystal-display panel makers. On November 26, 2014 a three-judge panel affirmed, on different grounds, its vacated opinion dismissing Motorola Mobility’s suit. In an opinion written by Judge Posner, the panel held that purchases by made overseas by Motorola’s foreign subsidiaries of panels that were incorporated into products subsequently shipped into the United States did not meet the second prong of the FTAIA requirements, that the effect of anticompetitive conduct give rise to an antitrust cause of action. 15 U.S.C. Section 6(a)(2). “Whether or not Motorola was harmed indirectly, the immediate victims of the price-fixing were its foreign subsidiaries.” Motorola Mobility LLC v. AU Optronics Corp., 2014 WL 6678622 (7th Cir. 2014). In its petition for rehearing en banc, Motorola claims:

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Daiichi Sankyo Inc. Agrees to Pay $39 Million to Settle Kickback Allegations Under the False Claims Act

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Daiichi Sankyo Inc., a global pharmaceutical company with its U.S. headquarters in New Jersey, has agreed to pay the United States and state Medicaid programs $39 million to resolve allegations that it violated the False Claims Act by paying kickbacks to induce physicians to prescribe Daiichi drugs, including Azor, Benicar, Tribenzor and Welchol, the Justice Department announced today.

“The Anti-Kickback Statute prohibits payments intended to influence a physician’s ordering or prescribing decisions,” said Acting Assistant Attorney General Joyce R. Branda for the Civil Division.  “The Department of Justice is committed to preserving the independence and objectivity of those decisions, which are cornerstones of our public health programs.”

The Anti-Kickback Statute was enacted to ensure that physicians’ medical judgment is not compromised by improper payments and gifts by other health care providers.  The statute generally prohibits anyone from offering, paying, soliciting or receiving remuneration to induce referrals of items or services covered by federal health care programs, including Medicare and Medicaid.

In this case, the government alleged that Daiichi paid physicians improper kickbacks in the form of speaker fees as part of Daiichi’s Physician Organization and Discussion programs, known as “PODs,” which were run from Jan. 1, 2005, through March 31, 2011, as well as other speaker programs that were run from Jan. 1, 2004, through Feb. 4, 2011.  Allegedly, payments were made to physicians even when physician participants in PODs took turns “speaking” on duplicative topics over Daiichi-paid dinners, the recipient spoke only to members of his or her own staff in his or her own office, or the associated dinner was so lavish that its cost exceeded Daiichi’s own internal cost limitation of $140 per person.

“Drug companies are prohibited from using lavish entertainment and padded speaker program payments to induce physicians to prescribe their drugs for beneficiaries of federal health care programs,” said U.S. Attorney Carmen Ortiz for the District of Massachusetts.  “Settlements like this one show that the government will continue to pursue health care companies that use kickbacks to promote their products.”

As part of the settlement, Daiichi has agreed to enter into a corporate integrity agreement with the Department of Health and Human Services-Office of Inspector General (HHS-OIG), which obligates the defendants to undertake substantial internal compliance reforms for the next five years.

“Schemes such as this are particularly abhorrent,” said Inspector General Daniel R. Levinson for the U.S. Department of Health and Human Services.  “Manufacturers and physicians who engage in them are cheating Medicare and Medicaid out of millions of dollars and threatening programs upon which many elderly and disabled Americans rely.  My office will take whatever steps necessary to guard against improper alliances between manufacturers of drugs and those who prescribe them.  Through our corporate integrity agreement we will be closely monitoring Daiichi.”

The settlement announced today stems from a complaint filed by Kathy Fragoules, a former Daiichi sales representative, under the whistleblower provisions of the False Claims Act, which authorize private parties to sue on behalf of the United States, and to receive a portion of any recovery.  Fragoules will receive $6.1 million of the federal recovery.

This settlement illustrates the government’s emphasis on combating health care fraud and marks another achievement for the Health Care Fraud Prevention and Enforcement Action Team (HEAT) initiative, which was announced in May 2009 by the Attorney General and the Secretary of Health and Human Services.  The partnership between the two departments has focused efforts to reduce and prevent Medicare and Medicaid financial fraud through enhanced cooperation.  One of the most powerful tools in this effort is the False Claims Act.  Since January 2009, the Justice Department has recovered a total of more than $23.3 billion through False Claims Act cases, with more than $14.9 billion of that amount recovered in cases involving fraud against federal health care programs.

The investigation and litigation was conducted by the Civil Division, the U.S. Attorney’s Office for the District of Massachusetts, the U.S. Department of Veterans Affairs, the Department of Defense Criminal Investigative Service, HHS-OIG and the FBI.  The claims settled by this agreement are allegations only and there has been no determination of liability.

The case is captioned U.S. ex rel. Fragoules v. Daiichi Sankyo, Inc., Civil Action No. 10-10420 (D. Mass.).

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Owner of Miami Home Health Company Pleads Guilty for Role in $32 Million Medicare Fraud Scheme

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A Miami owner of a home health care company pleaded guilty today in connection with a $32 million Medicare fraud scheme.

Assistant Attorney General Leslie R. Caldwell of the Justice Department’s Criminal Division, U.S. Attorney Wifredo A. Ferrer of the Southern District of Florida, Special Agent in Charge George L. Piro of the FBI’s Miami Field Office and Special Agent in Charge Derrick Jackson of the U.S. Department of Health and Human Services Office of Inspector General’s (HHS-OIG) Miami Regional Office made the announcement.

Felix Gonzalez, 45, of Miami, pleaded guilty to one count of conspiracy to commit health care fraud before U.S. District Judge Kathleen M. Williams of the Southern District of Florida.  A sentencing hearing is scheduled for March 19, 2015.

According to his plea documents, Gonzalez was an owner of AA Advanced Care Inc. (AA Advanced), a Miami home health care agency that purported to provide home health and therapy services to Medicare beneficiaries.  In connection with his guilty plea, Gonzalez admitted that he and his co-conspirators operated AA Advanced for the purpose of billing the Medicare program for, among other things, expensive physical therapy and home health care services that were not medically necessary or not provided at all.

Gonzalez further admitted that he negotiated and paid kickbacks and bribes to patient recruiters in exchange for patient referrals, as well as prescriptions, plans of care (POCs) and certifications for medically unnecessary therapy and home health services for Medicare beneficiaries.  Gonzalez admitted that he and his co-conspirators used these prescriptions, POCs and medical certifications to fraudulently bill the Medicare program for home health care services.

From approximately January 2006 through March 2009, AA Advanced submitted approximately $32 million in claims for home health services that were not medically necessary or not provided, and Medicare paid approximately $22 million for these fraudulent claims.

The case was investigated by the FBI and HHS-OIG, and was brought as part of the Medicare Fraud Strike Force, supervised by the Criminal Division’s Fraud Section and the U.S. Attorney’s Office for the Southern District of Florida.  This case is being prosecuted by Assistant Chief Joseph S. Beemsterboer and Trial Attorney Kelly Graves of the Criminal Division’s Fraud Section.

Since its inception in March 2007, the Medicare Fraud Strike Force, now operating in nine cities across the country, has charged nearly 2,000 defendants who have collectively billed the Medicare program for more than $6 billion.  In addition, the HHS Centers for Medicare & Medicaid Services, working in conjunction with the HHS-OIG, are taking steps to increase accountability and decrease the presence of fraudulent providers.

Former Owner and President of Pennsylvania Consulting Companies Charged with Foreign Bribery

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The former owner and President of Chestnut Consulting Group Inc. and Chestnut Consulting Group Co. (generally referred to as the “Chestnut Group”) was indicted by a federal grand jury today for his alleged participation in a scheme to pay bribes to a foreign official in violation of the Foreign Corrupt Practices Act (FCPA) and the Travel Act, and to launder proceeds of those crimes.

Assistant Attorney General Leslie R. Caldwell of the Justice Department’s Criminal Division, U.S. Attorney Zane David Memeger of the Eastern District of Pennsylvania and Special Agent in Charge Edward J. Hanko of the FBI’s Philadelphia Division made the announcement.

“We are committed to combating foreign corruption, across the globe and across all industries, through enforcement actions and prosecutions of companies and the individuals who run those companies,” said Assistant Attorney General Caldwell.  “As alleged, in this case, the owner and chief executive of a Pennsylvania financial consulting firm secured hundreds of millions of dollars in business by bribing a European banking official.  He now faces an indictment for corruption in federal court.  Bribery of foreign officials undermines the public trust in government and fair competition in business.  The charges returned today reflect the clear message that we will root out corruption and prosecute individuals who violate the Foreign Corrupt Practices Act.”

“We will aggressively investigate and prosecute individuals in our district who use corrupt means like bribery to influence foreign officials,” said U.S. Attorney Memeger.  “Our criminal statutes in this arena must be enforced to ensure fair dealing in a competitive global marketplace where foreign officials often hold significant decision-making authority.  The alleged conduct here was particularly reprehensible because it undermined the legitimacy of a process designed to support businesses for the citizens of developing nations.”

“This is a great example of the FBI’s ability to successfully coordinate with our international law enforcement partners to tackle corruption,” said Special Agent in Charge Hanko.  “Bribery – foreign or domestic – cripples the notion of fair competition in the marketplace.”

Dmitrij Harder, 42, of Huntingdon Valley, Pennsylvania, the former owner and president of the Chestnut Group, was charged with one count of conspiracy to violate the FCPA and Travel Act, five counts of violating the FCPA, five counts of violating the Travel Act, one count of conspiracy to commit international money laundering, and two counts of money laundering.

According to allegations in the indictment, the European Bank for Reconstruction and Development (EBRD) was a multilateral development bank headquartered in London, England, and was owned by over 60 sovereign nations.  Among other things, the EBRD provided financing for development projects in emerging economies, primarily in Eastern Europe.

According to allegations in the indictment, Harder and others paid bribes for the benefit of a senior official at the EBRD in exchange for influencing the official’s actions on applications for financing submitted by the Chestnut Group’s clients and for directing business to the Chestnut Group.  The EBRD ultimately approved applications for financing from two of the Chestnut Group’s corporate clients; the first resulted in the EBRD providing an $85 million investment and a 90 million Euro loan, while the second resulted in a $40 million investment and a $60 million convertible loan.  The Chestnut Group allegedly earned approximately $8 million in “success fees” as a result of the EBRD’s approval of these two applications.

The indictment alleges that Harder made five payments totaling more than $3.5 million to the sister of the EBRD official, in part as an effort to conceal the bribes.  These payments were allegedly made for purported consulting and other services provided to the Chestnut Group by the official’s sister, when in fact she provided no such services.  Harder also allegedly participated in creating fake documents to justify these payments.

The charges contained in the indictment are merely accusations, and the defendant is presumed innocent unless and until proven guilty.

The case is being investigated by the FBI’s Philadelphia Division.  The Criminal Division’s Office of International Affairs also provided assistance.

The case is being prosecuted by Assistant Chief Leo R. Tsao of the Criminal Division’s Fraud Section and Assistant U.S. Attorney Michelle Morgan of the Eastern District of Pennsylvania.

The 3C’s: An Overview of Japanese Cartel Regulation

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Today’s guest blog post is by Masayuki Atsumi of the Japanese law firm Mori Hamada & Matsumoto.  Mr. Atsumi was an attorney with the JFTC before private practice.

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Japan is one of the most important jurisdictions in Asia in relation to cartel enforcement, but not many written materials articulate the details of Japanese cartel regulation.  As my first contribution to this blog, I would like to briefly provide an overview of Japanese cartel regulation, with a focus mainly on procedural and practical aspects.

  1. Prohibition on cartel activities

The Japanese Anti-Monopoly Act (“AMA”) prohibits, among other things, “unreasonable restraint of trade” which includes collusive activities such as cartels or bid-rigging. A cartel violation is not per se illegal in Japan because the AMA requires that the Japan Fair Trade Commission (“JFTC”), the Japanese antitrust enforcement body, must prove a “substantive restraint on competition in the relevant market” in order to find a violation.

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U.S. Navy Commander Pleads Guilty in International Bribery Scandal

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Second U.S. Navy Officer Indicted on Related Bribery Charges

A commander in the U.S. Navy pleaded guilty to federal bribery charges today, admitting that he provided a government contractor with classified ship schedules and other internal U.S. Navy information in exchange for cash, travel and entertainment expenses, as well as the services of prostitutes.  A second U.S. Navy officer was also indicted today on related bribery charges by a federal grand jury in the Southern District of California.

Assistant Attorney General Leslie R. Caldwell of the Justice Department’s Criminal Division, U.S. Attorney Laura E. Duffy of the Southern District of California, Director Andrew L. Traver of the Naval Criminal Investigative Service (NCIS) and Deputy Inspector General of Investigations James B. Burch of the Department of Defense, Defense Criminal Investigative Service (DCIS) made the announcement.

“Commander Sanchez sold out his command and country for cash bribes, luxury hotel rooms, and the services of prostitutes,” said Assistant Attorney General Caldwell.  “After today’s guilty plea, instead of free stays at the Shangri-La hotel, Sanchez is facing many nights in federal prison.  The Department of Justice’s Criminal Division is committed to prosecuting those who abuse positions of public trust for personal enrichment at the expense of national security and the American taxpayers.”

“During the course of the investigation into this criminal enterprise, investigators have compiled voluminous evidence identifying multiple persons of interest, generating numerous leads, and establishing and corroborating connections,” said Director Traver.  “NCIS and our law enforcement partners are committed to seeing this massive fraud and bribery investigation through to its conclusion, so that those responsible are held accountable.”

“This outcome yet again sends the message that corruption will be vigorously investigated and prosecuted,” said Deputy Inspector General of Investigations Burch.  “This is an unfortunate example of dishonorable Naval officers who recklessly risked the safety of our troops by trading classified information for cash, extravagant gifts and prostitutes.  Cases such as these are not motivated by need or other difficult personal circumstances; they are the product of simple greed.  This investigation should serve as a warning that those who compromise the integrity of the United States will face their day of reckoning.  DCIS and our law enforcement partners will pursue these crimes relentlessly.”

Jose Luis Sanchez, 42, an active duty U.S. Navy Officer stationed in San Diego, California, is one of seven defendants charged – and the fifth to plead guilty – in the corruption probe involving Glenn Defense Marine Asia (GDMA), a defense contractor based in Singapore that serviced U.S. Navy ships and submarines throughout the Pacific.  Sanchez pleaded guilty to bribery and bribery conspiracy before U.S. Magistrate Judge David H. Bartick of the Southern District of California.  A sentencing hearing was scheduled for March 27, 2015, before U.S. District Judge Janis L. Sammartino.

According to his plea agreement, from April 2008 to April 2013, Sanchez held various logistical positions with the U.S. Navy’s Seventh Fleet in Asia.  Sanchez admitted that, beginning in September 2009, he entered into a bribery scheme with Leonard Glenn Francis, the CEO of GDMA, in which Sanchez provided classified U.S. Navy ship schedules and other sensitive U.S. Navy information to Francis and used his position and influence within the U.S. Navy to benefit GDMA.  In return, Francis gave him things of value such as cash, travel and entertainment expenses, and the services of prostitutes.  Sanchez admitted that this bribery scheme continued until September 2013.  Francis was charged in a complaint unsealed on Nov. 6, 2013, with conspiring to commit bribery; that charge remains pending.

In his plea agreement, Sanchez admitted to seven specific instances in which he provided Francis with classified U.S. Navy ship and submarine schedules.  He also admitted using his position and influence with the U.S. Navy to benefit GDMA and Francis on various occasions.  Further, Sanchez admitted that he tipped Francis off about investigations into GDMA overbillings and briefed Francis on internal U.S. Navy deliberations.

Sanchez further admitted that, in exchange for this information, Francis provided him with cash, entertainment and stays at high-end hotels.  For example, in May 2012, Francis paid for Sanchez to stay five nights at the Shangri-La, a luxury hotel in Singapore, and, two months later, Francis paid for Sanchez’s travel from Asia to the United States, at a cost of over $7,500.  Additionally, Francis arranged and paid for the services of prostitutes for Sanchez while Sanchez was in Singapore and elsewhere in Asia.

In addition to Sanchez, two other U.S. Navy officials – former NCIS Special Agent John Beliveau and Petty Officer First Class Dan Layug – have pleaded guilty in connection with this investigation.Two former GDMA executives, Alex Wisidagama and Edmond Aruffo, have likewise pleaded guilty.

Also today, an indictment was returned against U.S. Navy Captain-Select Michael Vannak Khem Misiewicz, 47, of San Diego, California, charging him with a bribery conspiracy and seven counts of bribery.  According to allegations in the indictment, from at least as early as July 2011 until  September 2013, Misiewicz provided classified U.S. Navy ship schedules and other sensitive U.S. Navy information to Francis and used his position and influence within the U.S. Navy to benefit GDMA.  In return Francis allegedly gave him things of value such as cash, travel and entertainment expenses, and the services of prostitutes.

The charges contained in a criminal complaint and indictment are merely accusations, and the defendants are presumed innocent unless and until proven guilty.

The ongoing investigation is being conducted by NCIS, DCIS and the Defense Contract Audit Agency. The case is being prosecuted by Director of Procurement Fraud Catherine Votaw and Trial Attorney Brian R. Young of the Criminal Division’s Fraud Section and Assistant U.S. Attorneys Mark W. Pletcher and Robert S. Huie of the Southern District of California.

Third Company Agrees to Plead Guilty to Price Fixing on Ocean Shipping Services for Cars and Trucks

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Company Agrees to Pay $59.4 Million Criminal Fine

Nippon Yusen Kabushiki Kaisha (NYK), a Japanese corporation, has agreed to plead guilty and to pay a $59.4 million criminal fine for its 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 announced today.

According to a one-count felony charge filed today in U.S. District Court for the District of Maryland in Baltimore, NYK conspired to suppress and eliminate competition by allocating customers and routes, rigging bids and fixing 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.  NYK participated in the conspiracy from at least February 1997 until at least September 2012.  NYK has agreed to cooperate with the Department’s ongoing antitrust investigation.  The plea agreement is subject to court approval. NYK is the third company to agree to plead guilty in this investigation, bringing the total agreed-upon fines to over $135 million.

Roll-on, roll-off cargo is non-containerized cargo that can be both rolled onto and rolled off of an ocean-going vessel. Examples of this cargo include new and used cars and trucks and construction and agricultural equipment.

“This is another step in the effort to restore competition in the ocean shipping industry to the benefit of U.S. consumers,” said Bill Baer, Assistant Attorney General in charge of the Department of Justice’s Antitrust Division.  “Including today’s charges, three companies have now agreed to plead guilty to participating in this long-running conspiracy.  We are not done.  Our investigation is ongoing.”

According to the charge, NYK and its co-conspirators conspired by agreeing on prices, allocating customers, agreeing to refrain from bidding against one another and exchanging customer pricing information.  The department said the companies then charged fees in accordance with those agreements for international ocean shipping services for certain roll-on, roll-off cargo to and from the United States and elsewhere at collusive and non-competitive prices.

NYK is charged with price fixing in violation of the Sherman Act, which carries a maximum penalty of a $100 million criminal fine for corporations.  The maximum fine may be increased to twice the gain derived from the crime or twice the loss suffered by the victims of the crime, if either of those amounts is greater than the statutory maximum fine.

Today’s charge is the result of an ongoing federal antitrust investigation into price fixing, bid rigging, and other anticompetitive conduct in the international roll-on, roll-off ocean shipping industry, which is being conducted by the Antitrust Division’s Washington Criminal I Section and the FBI’s Baltimore Field Office, along with assistance from the U.S. Customs and Border Protection Office of Internal Affairs, Washington Field Office/Special Investigations Unit.  Anyone with information in connection with this investigation is urged to call the Antitrust Division’s Washington Criminal I Section at 202-307-6694, visit www.justice.gov/atr/contact/newcase.html, or call the FBI’s Baltimore Field Office at 410-265-8080

3C’s: A Small Bite at the Apple

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A Small Bite at the Apple

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On December 15th, Apple and the United States continued their heavyweight battle with a round of oral argument in the Court of Appeals for the Second Circuit. It’s been a while since this feud started so I’ll briefly recap the claims of the combatants.  The DOJ wrote in its Second Circuit brief, “In late 2009 and early 2010, Apple orchestrated and participated in a conspiracy with five major book publishers to take control of retail pricing for electronic books (e-books) and to raise prices to agreed-upon levels. The conspiracy was successful: retail e-book prices for the vast majority of the Publisher-Defendants’ new releases and bestsellers rose from $9.99 to $12.99 or $14.99. Consumers paid almost 20% more, on average, for all of the Publisher-Defendants’ e-books.”  Apple offered a “no good deed goes unpunished” defense, contending that it did not join any conspiracy and, in fact, offered a pro-competitive, innovative alternate to the monopolistic stranglehold that Amazon.com had on the e-book market.

The DOJ prevailed in the trial court with Judge Denise Cote finding that Apple had helped orchestrate a horizontal, per se Sherman Act price-fixing violation by book publishers to raise prices. The district court found that “with Apple’s active encouragement and assistance, the Publisher Defendants agreed to work together to eliminate retail price competition and raise e-book prices, and again with Apple’s knowing and active participation, they brought their scheme to fruition.”

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2014 Sherman Act Twombly Recap

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A Recap of Sherman Act Twombly Decisions in 2014

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My parter, Joan Marshall, and I wrote an article just published by Law 360 titled:  “In 2014 Plaintiffs Gained Some Ground Lost After Twombly.”  The article reviewed some key antitrust cases at the motion to dismiss stage and examined how the courts applied the “plausible” pleading standards announced in Twombly to various elements of the alleged offense.   (It is important to note that while Twombly involved and antitrust complaint, the Supreme Court announced a pleading standard that applied to all complaints.  The vast majority of post-Twombly cases do not involve antitrust pleadings).

Twombly motions and decisions are of course fact specific so its a bit of a stretch to say there is a trend.  The party who tells the best story consistent with Twombly and the underlying policy considerations will win.  But, after several appeals courts reminded lower courts that the standard at the motion to dismiss stage was “plausbility,” it seems plaintiffs chances have improved.   Reminders such as this certainly have helped plaintiffs:

First, at the pleading stage, the plaintiff is not required to allege facts showing that an unlawful agreement is more likely than lawful parallel conduct. * * *Second, in order to state a Section One claim, a plaintiff need not allege a fact pattern that “tends to exclude the possibility” of lawful, independent conduct.  Erie County, Ohio v. Morton Salt, 702 F.3d 860, 868-69 (6th Cir. 2012).

Law 360 is a subscription based service. If you don’t have access to Law 360 and would like to read our full article, please send me a note and I’d be happy to send it along.  [email protected]

Thanks for reading.

Northern California Real Estate Investor Pleads Guilty to Bid Rigging and Fraud at Public Foreclosure Auctions

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Investigations Have Yielded 51 Plea Agreements and Five Indictments to Date

A Northern California real estate investor pleaded guilty for his role in bid rigging and fraud at public real estate foreclosure auctions in Northern California, the Department of Justice announced.

Charles Rock was indicted on Dec. 3, 2014, in the U.S. District Court for the Northern District of California in Oakland, California.  The indictment alleged that Charles Rock and others agreed not to compete at public foreclosure auctions in Contra Costa County, California, and diverted money to themselves that should have gone to mortgage holders and other beneficiaries.  Charles Rock pleaded guilty to one count of bid rigging and two counts of mail fraud.

To date, 51 individuals have agreed to plead or have pleaded guilty as a result of the department’s ongoing antitrust investigations into bid rigging and fraud at public real estate foreclosure auctions in Northern California.  In addition, 21 real estate investors, including Charles Rock, have been charged in five multi-count indictments for their roles in bid-rigging and fraud schemes at foreclosure auctions in Alameda, Contra Costa, San Francisco, and San Mateo counties.

The indictment alleges, among other things, that as early as June 2008 until about January 2011, Charles Rock and others conspired to rig bids to obtain numerous properties sold at foreclosure auctions in Contra Costa County, negotiated payoffs for agreeing not to compete, held second, private auctions known as “rounds,” concealed those rounds and payoffs, and in the process, defrauded mortgage holders and other beneficiaries.

“This is the first post-indictment plea resulting from the investigation and marks a positive step forward in resolving the case,” said Brent Snyder, Deputy Assistant Attorney General for the Antitrust Division’s criminal enforcement program.  “It is important for those who conspired to profit from rigged bids and illegal payoffs to take responsibility for their actions.”

“These charges demonstrate our continued commitment to investigate and prosecute individuals and organizations responsible for the corruption of the public foreclosure auction process,” said David J. Johnson, FBI Special Agent in Charge of the San Francisco Field Office.  “The FBI is committed to work these important cases and remains unwavering in our dedication to bring the members of these illegal conspiracies to justice.”

A violation of the Sherman Act carries a maximum penalty of 10 years in prison and a $1 million fine for individuals.  The maximum fine for the Sherman Act charges may be increased to twice the gain derived from the crime or twice the loss suffered by the victim if either amount is greater than $1 million.  Each count of mail fraud carries a maximum sentence of 20 years in prison and a $1 million fine.

Today’s charges are the latest filed by the department in its ongoing investigation into bid rigging and fraud at public real estate foreclosure auctions in San Francisco, San Mateo, Contra Costa, and Alameda counties, California.  These investigations are being conducted by the Antitrust Division’s San Francisco Office and the FBI’s San Francisco Office.  Anyone with information concerning bid rigging or fraud related to public real estate foreclosure auctions should contact the Antitrust Division’s San Francisco Office at 415-934-5300, or call the FBI tip line at 415-553-7400.

Today’s charges were brought in connection with the President’s Financial Fraud Enforcement Task Force.  The task force was established to wage an aggressive, coordinated and proactive effort to investigate and prosecute financial crimes.  With more than 20 federal agencies, 94 U.S. Attorneys’ Offices and state and local partners, it’s the broadest coalition of law enforcement, investigatory and regulatory agencies ever assembled to combat fraud.  Since its formation, the task force has made great strides in facilitating increased investigation and prosecution of financial crimes; enhancing coordination and cooperation among federal, state and local authorities; addressing discrimination in the lending and financial markets and conducting outreach to the public, victims, financial institutions and other organizations.  Over the past three fiscal years, the Justice Department has filed nearly 10,000 financial fraud cases against nearly 15,000 defendants including more than 2,900 mortgage fraud defendants.  For more information on the task force, please visit www.StopFraud.gov.