Category Archives: Antitrust Division

FORMER CONTRACTOR OF A FLORIDA PROPERTY MANAGEMENT COMPANY SENTENCED TO SERVE TIME IN PRISON FOR WIRE FRAUD

Posted on by

WASHINGTON —A former repair contractor of a  Florida property management company was sentenced to serve time in prison for his  participation in a wire fraud scheme related to housing repairs made under a  contract between Ocwen Loan Servicing LLC, and the U.S. Department of Veterans  Affairs (VA), the Department of Justice announced today.

Ronald B. Hurst was sentenced by  Judge Philip G. Reinhard of the U.S. District Court for the Northern District  of Illinois in Rockford to serve 24 months in prison for his role in the  conspiracy.

In addition, a second former repair  contractor, Bryant A. Carbonell, was sentenced by Judge Reinhard to serve six  months of home confinement for his role in the conspiracy.  Hurst and Carbonell were sentenced to pay $147,825  jointly and severally in restitution to the VA.  Hurst pleaded guilty on Feb. 15, 2013, to two  wire fraud counts of a 10-count indictment and Carbonell pleaded guilty on  Sept. 21, 2012, to the same charges.

An indictment, originally filed in  January 2012, charged Hurst, Carbonell and Ryan J. Piana with conspiring to  commit bribery and wire fraud from at least January 2006 until as late as  September 2007.  Hurst, Carbonell and Piana  were also charged with bribery and wire fraud.  As part of the plea agreements, the United  States agreed to dismiss the remaining counts against Hurst and Carbonell at  the time of their sentencing.
“By paying kickbacks in exchange for  contracts to companies they secretly owned or with which they were affiliated,  the conspirators created the illusion of competition while illegally steering  contracts to themselves,” said Bill Baer, Assistant Attorney General in charge  of the Department of Justice’s Antitrust Division.  “Today’s sentencing reaffirms the Antitrust  Division’s commitment to prosecuting schemes that undermine competition in the  VA Mortgage Guarantee Program.”
Hurst and Carbonell were former  contractors for West Palm Beach, Fla.-based Ocwen Loan Servicing LLC. Piana was  a former residential sales manager at Ocwen.  According to court documents, Ocwen managed  foreclosed properties under contract with the VA, which guaranteed qualifying residential  mortgages for veterans.  Under the  contract between the VA and Ocwen, if a veteran defaulted, Ocwen completed  necessary repairs and re-sold the property.  Proceeds from the re-sale of VA-acquired  properties directly benefit the VA by reducing the cost of guaranteeing  residential mortgages to veterans.
According to the charges, Hurst and  Carbonell paid Piana to steer housing repair work to companies affiliated with Hurst  and Carbonell.  Piana recruited other  Ocwen employees into the scheme and paid them on behalf of himself and the  other conspirators.  The department said  in order to execute the scheme, the conspirators sent, or caused to be sent,  various transmissions via wire communication.
This is the third case involving  properties managed by Ocwen under contract with the VA. On Dec. 3, 2010,  Benjamin K. Graves, also a former Ocwen employee, pleaded guilty in U.S.  District Court in Orlando, Fla., to wire fraud in connection with the VA contract.   On Jan. 25, 2012, Joshua R. Nusbaum,  another former Ocwen employee, and Andrew J. Nusbaum, a former Ocwen  contractor, pleaded guilty in U.S. District Court in Orlando, Fla., to wire  fraud in connection with the same VA contract.  Piana pleaded guilty to the same counts as  Carbonell and Hurst on July 16, 2013, in U.S. District Court in Orlando, Fla.  Piana was sentenced on Sept. 30, 2013, to serve  24 months in prison and to pay $147,285 in restitution to the VA.

The sentence announced today resulted  from a federal investigation of housing repair contracts performed under  contract with the VA.  The investigation  is being conducted by the Antitrust Division’s Chicago Office and the Central  Field Office of the U.S. Department of Veterans Affairs, Office of Inspector  General, Criminal Investigations Division, located in Hines, Ill. Anyone with  information concerning suspicious activity relating to housing repairs  performed under a contract with the VA should contact the Antitrust Division’s Chicago Office at 312-353-7530 or visit  www.justice.gov/atr/contact/newcase.htm.

TWO NORTHERN CALIFORNIA REAL ESTATE INVESTORS AGREE TO PLEAD GUILTY TO BID RIGGING AT PUBLIC REAL ESTATE FORECLOSURE AUCTIONS

Posted on by

WASHINGTON — Two Northern California real estate investors have agreed to plead  guilty for their roles in conspiracies to rig bids and commit mail fraud at  public real estate foreclosure auctions in Northern California, the Department  of Justice announced.

Felony charges were filed today in the U.S. District Court for the  Northern District of California, in San Francisco, against Florence Fung of  Sacramento, Calif, and Michael Navone of San Rafael, Calif.  Fung and Navone are  the 39th and 40th individuals to plead guilty or agree to  plead 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.

According to court documents, Fung and Navone conspired  with others, for various lengths of time between February 2009 and January  2011, not to bid against one another, but instead to designate a winning bidder  to obtain selected properties at public real estate foreclosure auctions in San  Mateo County.  Fung and Navone  also were charged with conspiring to use the mail to carry out schemes to  fraudulently acquire title to selected properties sold at public auctions, to  make and receive payoffs and to divert money to co-conspirators that would have  gone to mortgage holders and others.  Navone  was also charged with participating in similar conspiracies in San Francisco  County beginning as early as October 2009 until about January 2011.

“Instead of competing at real estate foreclosure auctions, the  conspirators agreed not to bid against one another and determined among themselves  who would submit the winning bid, stifling honest and fair competition,” said Bill  Baer, Assistant Attorney General in charge of the Department of Justice’s  Antitrust Division. “The Antitrust Division and its partners at the FBI  continue to remain committed to holding accountable investors who attempt to  subvert the competitiveness of the bidding process.”

The department said that the primary purpose of the  conspiracies was to suppress and restrain competition and to conceal payoffs in  order to obtain selected real estate offered at San Mateo and San Francisco county  public foreclosure auctions at non-competitive prices.  When real estate properties are sold at these  auctions, the proceeds are used to pay off the mortgage and other debt attached  to the property, with remaining proceeds, if any, paid to the homeowner. According  to court documents, these conspirators paid and received money that otherwise  would have gone to pay off the mortgage and other holders of debt secured by  the properties, and, in some cases, the defaulting homeowner.

“The FBI continues to join the Antitrust Division in  holding criminals accountable for bid rigging and fraudulent practices at  public real estate foreclosure auctions,” said David J. Johnson, FBI Special  Agent in Charge of the San Francisco Field Office.  “Anticompetitive practices disrupt a fair  marketplace and the FBI will investigate these types of crimes.”

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 victims if either amount is greater than $1 million.  A count of conspiracy to commit mail fraud  carries a maximum sentence of 30 years in prison and a $1 million fine.  The government can also seek to forfeit the  proceeds earned from participating in the conspiracy to commit mail fraud.

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,  Calif.  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 415-436-6660, visit www.justice.gov/atr/contact/newcase.html 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  is 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.

In Search of Effective Ethics & Compliance Programs; By Professor Maurice Stucke, GeyerGorey LLP

Posted on by

 


Maurice E. Stucke

University of Tennessee College of Law
December 10, 2013


Abstract: 

The U.S. Sentencing Commission’s Organizational Guidelines for over twenty years have offered firms a significant financial incentive to develop an ethical organizational culture. Nonetheless, corporate crime persists. Too many ethics programs remain ineffective.As this Article explores, the Guidelines’ current approach is not working. The evidence, including sentencing data over the past twenty years, reveals that few firms have effective ethics and compliance programs. Nor is there much hope that the Guidelines’ incentive will induce companies, after the economic crisis, to become more ethical.The problem is not attributable to several assumptions underlying the Guidelines. The empirical research, while still developing, suggests that compliance efforts can be effective, and that effective compliance is attainable. Instead, this Article explores how the Guidelines’ extrinsic, incentive-based approach to compliance does not cure, and likely contributes to, the problem.

 

 

FORMER SEA STAR LINE PRESIDENT SENTENCED TO SERVE FIVE YEARS IN PRISON FOR ROLE IN PRICE-FIXING CONSPIRACY INVOLVING COASTAL FREIGHT SERVICES BETWEEN THE CONTINENTAL UNITED STATES AND PUERTO RICO

Posted on by

WASHINGTON — The former president  of Sea Star Line LLC, a Jacksonville, Fla.-based water freight carrier, was  sentenced to serve five years in prison and to pay a $25,000 criminal fine for  his participation in a conspiracy to fix rates and surcharges for freight  transported by water between the continental United States and Puerto Rico, the  Department of Justice announced today.

Frank Peake was  sentenced today by Judge Daniel R. Dominguez in U.S. District Court for the  District of Puerto Rico in San Juan.  Peake’s  two-week trial took place in January 2013.

“The sentence  imposed today reflects the serious harm these conspirators inflicted on  American consumers, both in the continental United States and in Puerto Rico,” said  Bill Baer, Assistant Attorney General in charge of Department of Justice’s  Antitrust Division.  “The Antitrust  Division will continue to vigorously prosecute executives who collude to fix  prices at the expense of consumers.”

According to court documents and evidence presented at  trial, Peake and his co-conspirators  conspired through meetings and other communications in the continental United  States and Puerto Rico to fix, stabilize and maintain rates and surcharges for  Puerto Rico freight services, to allocate customers of Puerto Rico freight  services between and among the conspirators and to rig bids submitted to  customers of Puerto Rico freight services.   Peake was involved in the conspiracy from at least late 2005 until at  least April 2008.

As a result of the  ongoing investigation, the three largest water freight carriers serving routes  between the continental United States and Puerto Rico, including Peake’s former  employer Sea Star, have pleaded guilty and been ordered to pay more than $46  million in criminal fines for their roles in the conspiracy.  Sea Star pleaded guilty on Dec. 20, 2011, and  was sentenced by Judge Dominguez to pay a $14.2 million criminal fine.  Sea Star transports a variety of cargo  shipments, such as heavy equipment, perishable food items, medicines and  consumer goods, on scheduled ocean voyages between the continental United States  and Puerto Rico.

Peake and five  other individuals have been ordered to serve prison sentences ranging from  seven months to five years.  Additionally,  Thomas Farmer, the former vice president of price and yield management of  Crowley Liner Services, was indicted in March 2013 for  his role in the conspiracy and is scheduled to go to trial in May 2014.

This case is part of an ongoing investigation being conducted by the  Antitrust Division’s National Criminal Enforcement Section and the Defense Criminal  Investigative Service.  Anyone with  information concerning price fixing or other anticompetitive conduct in the  coastal water freight transportation industry is urged to call the Antitrust  Division’s National Criminal Enforcement Section at 202-307-6694.

Hertz Fix in Dollar Thrifty Deal Fails as Insider Warned

Posted on by

Hertz Fix in Dollar Thrifty Deal Fails as Insider Warned
Bloomberg News

“‘What a screw-up,’ said Allen Grunes, an antitrust lawyer at GeyerGorey LLP in Washington who wasn’t involved in the matter. “It’s a huge embarrassment that it happened this quickly.”

The bankruptcy of Advantage shows how hard it is to recreate competition after mergers in concentrated markets, said Grunes, a former attorney with the Justice Department’s antitrust division.”

Stanley Electric Co. Ltd. Agrees to Plead Guilty to Price Fixing on Automobile Parts Installed in U.s. Cars; Company Agrees to Pay $1.44 Million Criminal Fine

Posted on by
Stanley Electric Co. Ltd., a Tokyo-based company, has agreed to plead guilty and to pay a $1.44 million criminal fine for its participation in a conspiracy to fix prices of lamp ballasts installed in cars sold in 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 Eastern District of Michigan in Detroit, Stanley Electric engaged in a conspiracy to rig bids for, and to fix, stabilize and maintain the prices of, automotive high-intensity discharge (HID) lamp ballasts sold to automakers in the United States and elsewhere.  Stanley Electric has also agreed to cooperate with the department’s ongoing investigation. The plea agreement is subject to court approval.

The department said that Stanley Electric and its co-conspirators sold or supplied the ballasts at noncompetitive prices to automakers in the United States and elsewhere.  Stanley Electric’s involvement in the conspiracy to fix prices of automotive HID lamp ballasts lasted from as early as July 1998 until at least February 2010.

Stanley Electric manufactures and sells automotive HID headlamps, which contain automotive HID lamp ballasts.  An automotive HID lamp ballast is an electrical device that is essential for the operation of an HID headlamp.  It regulates the electrical current used to ignite and control the electrical arc that generates the intensely bright light emitted by an automotive HID headlamp fixture.

The department said the company and its co-conspirators carried out the conspiracy through meetings and conversations in which they discussed and agreed upon bids, price quotations and price adjustments and agreed to allocate among the companies certain sales of HID lamp ballasts sold to automobile and component manufacturers.

Including Stanley, 23 corporations have been charged in the department’s investigation into price fixing and bid rigging in the auto parts industry.  Those companies have agreed to pay a total of over $1.8 billion in fines.  Additionally, 26 individuals have been charged.

Stanley Electric Co. Ltd. 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 prosecution arose from an ongoing federal antitrust investigation into price fixing, bid rigging and other anticompetitive conduct in the automotive parts industry, which is being conducted by each of the Antitrust Division’s criminal enforcement sections and the FBI.  Today’s charges were brought by the National Criminal Enforcement Section, with the assistance of the Detroit, Michigan Field Office of the FBI and the FBI headquarters’ International Corruption Unit.  Anyone with information concerning the focus of this investigation should contact the Antitrust Division’s Citizen Complaint Center at 1-888-647-3258, visit  www.justice.gov/atr/contact/newcase.html, or call the Detroit Field Office of the FBI at 313-965-2323.

Toyo Tire & Rubber Co. Ltd. Agrees to Plead Guilty to Price Fixing on Automobile Parts Installed in U.S. Cars;

Posted on by
Osaka, Japan-based Toyo Tire & Rubber Co. Ltd. has agreed to plead guilty and to pay a $120 million criminal fine for its role in two separate conspiracies to fix the prices of automotive components involving anti-vibration rubber and driveshaft parts installed in cars sold in the United States and elsewhere, the Department of Justice announced today.

According to a two-count felony charge filed today in U.S. District Court for the Northern District of Ohio in Toledo, Toyo engaged in a conspiracy to allocate sales of, to rig bids for, and to fix the prices of automotive anti-vibration rubber parts it sold to Toyota Motor Corp., Nissan Motor Corp., Fuji Heavy Industries Ltd. – more commonly known by its brand name, Subaru – and certain of their subsidiaries, affiliates and suppliers, in the United States and elsewhere.  According to the charge, Toyo and its co-conspirators carried out the anti-vibration rubber parts conspiracy from as early as March 1996 until at least May 2012.

In addition, according to the charge, Toyo engaged in a separate conspiracy to allocate sales of, and to fix, raise and maintain the prices of automotive constant-velocity-joint boots it sold to U.S. subsidiaries of GKN plc, a British automotive parts supplier . According to the charge, Toyo and its co-conspirators carried out the constant-velocity-joint boots conspiracy from as early as January 2006 until as late as September 2010.

Toyo, which has subsidiaries based in Franklin, Ky., and White, Ga., has agreed to cooperate with the department’s ongoing investigation.  The plea agreement is subject to court approval.

“Today’s charge is the latest step in the Antitrust Division’s effort to hold automobile part suppliers accountable for their illegal and collusive conduct,” said Renata B. Hesse, Deputy Assistant Attorney General for the Department of Justice’s Antitrust Division.  “The division continues to vigorously prosecute companies and individuals that seek to maximize their profits through illegal and anticompetitive means.”

Automotive anti-vibration rubber parts are comprised primarily of rubber and metal, and include engine mounts and suspension bushings.  They are installed in automobiles for the purpose of reducing road and engine vibration.  Automotive constant-velocity-joint boots are composed of rubber or plastic, and are used to cover the constant-velocity-joints of an automobile to protect the joints from contaminants.

The department said the company and its co-conspirators carried out the conspiracies through meetings and conversations, discussed and agreed upon bids, price quotations and price adjustments, and agreed to allocate among the companies certain sales of the anti-vibration rubber and  constant-velocity-joint boots  parts sold to automobile and component manufacturers.

Including Toyo, 22 companies and 26 executives have been charged in the Justice Department’s ongoing investigation into the automotive parts industry.  All 22 companies have either pleaded guilty or have agreed to plead guilty and have agreed to pay more than $1.8 billion in criminal fines.  Of the 26 executives, 20 have been sentenced to serve time in U.S. prisons or have entered into plea agreements calling for significant prison sentences.

Toyo 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.

The charges are the result of an ongoing federal antitrust investigation into price fixing, bid rigging and other anticompetitive conduct in the automotive parts industry, which is being conducted by each of the Antitrust Division’s criminal enforcement sections and the FBI.  Today’s charges were brought by the Antitrust Division’s Chicago Office and the FBI’s Cleveland Field Office, with the assistance of the FBI headquarters’ International Corruption Unit and the U.S. Attorney’s Office for the Northern District of Ohio.  Anyone with information concerning the focus of this investigation should contact the Antitrust Division’s Citizen Complaint Center at 1–888–647–3258, visit  www.justice.gov/atr/contact/newcase.html or call the FBI’s Cleveland Field Office at 216-522-1400.

DOJ backs antitrust leniency program; attorneys oppose expansion of compliance efforts

Posted on by

DoJ backs antitrust leniency program; attorneys oppose expansion of compliance efforts PaRR

The US Department of Justice (DoJ) criminal antitrust leniency program is working well and should not be supplemented or replaced by an expansion of a program that would give sentencing credit for violators that have price-fixing compliance programs, DoJ officials and antitrust attorneys said.

“Antitrust compliance programs are only as good as the buy-in from the top,” an antitrust attorney with extensive experience at the DoJ told PaRR.

A DoJ spokesperson said that while the Antitrust Division does have a compliance credit program, it is not used often because of the number of company executives usually implicated in a price-fixing probe. “The sentencing guidelines provide that, when high-level personnel at the company participated in the cartel conduct, credit is not to be given for compliance programs,” the spokesperson said. The spokesperson said that in most cases “high-level or substantial authority personnel” are involved in any price-fixing scheme.

However, a long-time compliance officer told PaRR that the Antitrust Division should adopt an approach similar to how the DoJ’s Criminal Division enforces the Foreign Corrupt Practices Act (FCPA).

“In the anti-corruption field, they’re focused on prevention,” Joseph Murphy, an attorney with the Compliance Systems Legal Group, told PaRR. “They don’t just want to prosecute it, they want to prevent it.”

Murphy recently publicly questioned whether the DoJ’s prosecution of auto parts companies has been the success that many have said it is, adding that the cartels existed for many years before being discovered.

And even then, the conspiracy was only discovered when a company sought leniency in exchange for providing information about price-fixing. The auto parts investigation has prompted a renewed discussion of compliance programs among attorneys.

In the FCPA realm, DoJ officials push companies to operate extensive anti-bribery compliance programs in order that they may be given a more lenient sentence. Business groups have been pushing for the FCPA to be amended to allow companies to use compliance programs as a defense as the DoJ decides whether to prosecute a company or its employees.

The DoJ and the Securities and Exchange Commission last year issued extensive guidance on the FCPA that describes the hallmarks of an effective compliance program.

A second antitrust attorney with DoJ experience agreed that the Antitrust Division should expand efforts to push companies to develop compliance programs to help prevent price-fixing.

“I agree that the Antitrust Division could do a lot more to incentivize companies to have effective compliance programs,” said a second antitrust attorney with DoJ experience.

But another antitrust attorney said that expanding efforts to require extensive compliance programs would not be effective. “It’s probably true that [antitrust] prosecutors do not place as much emphasis on compliance regimes as do FCPA prosecutors, but I think the criticism is misguided,” said Hays Gorey, an attorney with GuyerGorey and a former DoJ attorney in the Antitrust and Criminal Divisions. However, he added that, “I would not be in favor of layering new compliance obligations on firms generally just because some violate the law.”

Gorey said the antitrust leniency program has achieved its goals. “The leniency program, by almost all measures, has been an enormous success leading to the discovery of vast conspiracies and the prosecution of large numbers of individuals and companies who violate the law,” he said.

And the first antitrust attorney said there would be a “tremendous outcry” if officials of a company that overcharged customers millions of dollars as a result of a price-fixing scheme received a much lighter sentence simply because it had a compliance program.

by David Baumann in Washington DC

THREE TAKATA CORP. EXECUTIVES AGREE TO PLEAD GUILTY TO PARTICIPATING IN GLOBAL SEATBELT PRICE FIXING CONSPIRACY

Posted on by

WASHINGTON — Three high-level executives of Tokyo-based Takata Corp. have  agreed to plead guilty for their participation in a conspiracy to fix prices of  seatbelts installed in cars sold in the United States, the Department of  Justice announced today.  The executives  have also agreed to serve time in a U.S. prison.

According to the one-count felony  charges filed separately against each of the executives today in the U.S.  District Court for the Eastern District of Michigan in Detroit, Yasuhiko Ueno, Saburo  Imamiya and Yoshinobu Fujino participated in a conspiracy to rig bids for, and  to fix, stabilize and maintain the prices of seatbelts sold to Toyota Motor  Corp., Honda Motor Co. Ltd., Nissan Motor Co. Ltd., Fuji Heavy Industries Inc.  – more commonly known by its brand name, Subaru – and Mazda Motor Corp. in the  United States and elsewhere.  The three  executives have agreed to serve prison sentences ranging from 14 to 19 months,  and to cooperate with the department’s ongoing investigation.

Ueno was  employed by Takata’s Auburn Hills, Mich.-based U.S. subsidiary, TK Holdings  Inc., in the United States as senior vice president for sales for Japanese manufacturers  from at least January 2006 through December 2007.  From early 2008 through June 2009, Ueno was  employed by Takata in Japan as deputy division director of the customer  relations division, and as director of the customer relations division from  June 2009 through at least February 2011.  According to the charge, Ueno’s involvement in  the conspiracy lasted from at least as early as January 2006 until at least  February 2011.  Ueno has agreed to serve 19  months in prison and to pay a $20,000 criminal fine.

Imamiya was  employed by Takata in Japan as general manager for Toyota sales from at least  January 2008 to July 2009, and as director of the customer relations division from  July 2009 through at least February 2011.  According to the charge, Imamiya’s involvement  in the conspiracy lasted from at least as early as January 2008 until at least  February 2011.  Imamiya has agreed to  serve 16 months in prison and to pay a $20,000 criminal fine.

Fujino was  employed by Takata in Japan as the manager of the Toyota group within the  customer relations division from at least January 2004 through June 2005, and  as the manager of the Mazda group within the customer relations division from  June 2005 through the end of 2007.  From  the beginning of 2008 through at least February 2011, Fujino was employed by TK  Holdings in the United States as assistant vice president for sales for Japanese  manufacturers.  According to the charge,  Fujino’s involvement in the conspiracy lasted from at least as early as January  2004 until at least February 2011.  Fujino  has agreed to serve 14 months in prison and to pay a $20,000 criminal fine.

Takata  Corp. is a manufacturer of automotive occupant safety systems, including  seatbelts.  Seatbelts are safety strap restraints designed to secure an  occupant in position in a vehicle in the event of an accident, and may be sold  bundled with related parts according to the needs of the automobile  manufacturer.  According to the  charges, the Takata executives and their co-conspirators carried out the  conspiracy by, among other things, agreeing during meetings and communications  to coordinate bids submitted to the automobile manufacturers.

On Sept. 26, 2013, Gary Walker, an  executive of TK Holdings Inc., agreed to plead guilty and serve a sentence of  14 months in prison for his involvement in the same conspiracy.  On Oct. 9, 2013, Takata Corp. agreed to plead  guilty for its involvement in the conspiracy and to pay a criminal fine of  $71.3 million.

Each of the  executives is charged with price fixing in violation of the Sherman Act, which  carries a maximum penalty of 10 years in prison and a $1 million criminal fine for  individuals.  The maximum fine for an  individual 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.

Including today’s charges, 24  individuals have been charged in the department’s investigation into price  fixing and bid rigging in the auto parts industry.  Additionally, 21 corporations have been  charged.

The current prosecution arose from an ongoing federal antitrust investigation into price fixing, bid rigging and other anticompetitive conduct in the automotive parts industry, which is being conducted by each of the Antitrust Division’s criminal enforcement sections and the FBI.  Today’s charges were brought by the National Criminal Enforcement Section, with the assistance of the Detroit, Michigan, Field Office of the FBI.  Anyone with information concerning the focus of this investigation should contact the Antitrust Division’s Citizen Complaint Center at 1-888-647-3258, visit www.justice.gov/atr/contact/newcase.html, or call the Detroit Field Office of the FBI at 313-965-2323.

# # #

TWO EXECUTIVES INDICTED FOR ROLES IN FIXING PRICES ON AUTOMOBILE PARTS SOLD TO TOYOTA TO BE INSTALLED IN U.S. CARS

Posted on by

WASHINGTON — A Cleveland federal  grand jury returned an indictment against two executives of a Japanese  automotive supplier for their roles in an international conspiracy to fix  prices of automotive anti-vibration rubber parts sold to Toyota and installed  in U.S. cars, the Department of Justice announced today.

The indictment,  filed yesterday in U.S. District Court for the Northern District of Ohio in  Toledo, charges Masao Hayashi and Kenya Nonoyama, both Japanese nationals, with  participating in a conspiracy to suppress and eliminate competition in the  automotive parts industry by agreeing to allocate the supply of, to rig bids  for and to fix, raise and maintain the prices of anti-vibration rubber parts  sold to Toyota Motor Corp., Toyota Motor Engineering & Manufacturing North  America Inc. and affiliated companies (collectively Toyota) for installation in  automobiles manufactured and sold in the United States and elsewhere.

Automotive  anti-vibration rubber products are comprised primarily of rubber and metal, and  include engine mounts and suspension bushings.  They are installed in automobiles for the  purpose of reducing road and engine vibration.

The indictment alleges, among other things, that from as early as March  1996 until at least December 2008, Hayashi and Nonoyama and their co-conspirators  conducted meetings and communications in Japan to reach collusive agreements.  The indictment alleges that the conspiracy  involved agreements affecting the Toyota Corolla, Avalon, Tacoma, Camry,  Tundra, Sequoia, Rav4, Sienna, Venza and Highlander.

“Today’s  indictment reaffirms the Antitrust Division’s commitment to hold executives  accountable for actions that corrupt the competitive landscape and harm  consumers,” said Renata B. Hesse, Deputy Assistant Attorney General for the  Department of Justice’s Antitrust Division.  “The Antitrust Division continues to work  closely with its fellow competition enforcers abroad to ensure that there are  no safe harbors for executives who engage in international cartel crimes.”

Hayashi and  Nonoyama are charged with a violation of the Sherman Act, which carries a  maximum penalty of 10 years in prison and a $1 million criminal fine for  individuals.  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.

Including Hayashi  and Nonoyama, 21 companies and 26 executives have been charged in the Justice  Department’s ongoing investigation into the automotive parts industry.  To date, more than $1.6 billion in criminal  fines have been obtained and seventeen of the charged executives have been  sentenced to serve time in U.S. prisons or have entered into plea agreements  calling for significant prison sentences.

The charges are  the result of an ongoing federal antitrust investigation into price fixing, bid  rigging and other anticompetitive conduct in the automotive parts industry,  which is being conducted by each of the Antitrust Division’s criminal  enforcement sections and the FBI.  Today’s  charges were brought by the Antitrust Division’s Chicago Office and the FBI’s  Cleveland Field Office, with the assistance of the FBI headquarters’  International Corruption Unit and the U.S. Attorney’s Office for the Northern  District of Ohio.  Anyone with  information on price fixing, bid rigging and other anticompetitive conduct  related to other products in the automotive parts industry should contact the  Antitrust Division’s Citizen Complaint Center at (888) 647–3258, visit www.justice.gov/atr/contact/newcase.html or call the FBI’s Cleveland Field Office at (216) 522-1400.