Tag Archives: Antitrust

NJ Company Pleads Guilty For Role in Bid Rigging Scheme at Municipal Tax Lien Auctions

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Investigation Has Yielded 11 Guilty Pleas

WASHINGTON — A New Jersey company in the business of receiving the assignment of municipal tax liens pleaded guilty today for its role in a conspiracy to rig bids for the sale of tax liens auctioned by municipalities in New Jersey, the Department of Justice announced.

A felony charge was filed today in U.S. District Court for the District of New Jersey in Newark, against Mercer S.M.E. Inc., a company located in Burlington, N.J. According to the charges, from at least 2003 until approximately February 2009, Mercer, in conjunction with a nonprofit corporation and others participated in a conspiracy to rig bids at auctions for the sale of municipal tax liens in New Jersey.  As part of the conspiracy, the co-conspirators agreed to allocate the liens on which each would bid.  Among other things, Mercer was assigned tax liens it understood were purchased in accordance with the unlawful agreement.

“The conspirators agreed to coordinate their bids and allocate the tax liens amongst themselves, at the expense of distressed property owners,” said Scott D. Hammond, Deputy Assistant Attorney General for the Antitrust Division’s criminal enforcement program. “Today’s guilty plea sends a message that those who profit from illegal, anticompetitive conduct will be held accountable.”

The department said that the primary purpose of the conspiracy was to suppress and restrain competition in order to obtain selected municipal tax liens offered at public auctions at non-competitive interest rates. When the owner of real property fails to pay taxes on that property, the municipality in which the property is located may attach a lien for the amount of the unpaid taxes. If the taxes remain unpaid after a waiting period, the lien may be sold at auction. State law requires that investors bid on the interest rate delinquent property owners will pay upon redemption. By law, the bid opens at 18 percent interest and, through a competitive bidding process, can be driven down to zero percent. If a lien remains unpaid after a certain period of time, the investor who purchased the lien may begin foreclosure proceedings against the property to which the lien is attached.

According to the court documents, Mercer, along with the nonprofit corporation which assigned some of its liens to Mercer, was involved in a conspiracy with others not to bid against one another at municipal tax lien auctions in New Jersey. Since the conspiracy permitted the conspirators to purchase tax liens with limited competition, each conspirator was able to obtain liens which earned a higher interest rate. Property owners were therefore made to pay higher interest on their tax debts than they would have paid had their liens been purchased in open and honest competition, the department said.

A violation of the Sherman Act carries a maximum penalty of $100 million criminal fine for corporations. The maximum fine for a Sherman Act violation 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 the statutory maximum.

Today’s plea is the 11th guilty plea resulting from an ongoing investigation into bid rigging or fraud related to municipal tax lien auctions. Eight individuals – Isadore H. May, Richard J. Pisciotta Jr., William A. Collins, Robert W. Stein, David M. Farber, Robert E. Rothman, Stephen E. Hruby and David Butler – and two companies, DSBD LLC and Crusader Servicing Corp., have previously pleaded guilty as part of this investigation.

Today’s charge is part of efforts underway by President Obama’s Financial Fraud Enforcement Task Force (FFETF) which was created in November 2009 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 more than 10,000 financial fraud cases against nearly 15,000 defendants including more than 2,700 mortgage fraud defendants. For more information on the task force, visit www.stopfraud.gov.

This ongoing investigation is being conducted by the Antitrust Division’s New York Field Office and the FBI’s Atlantic City, N.J., office. Anyone with information concerning bid rigging or fraud related to municipal tax lien auctions should contact the Antitrust Division’s New York Field Office at 212-335-8000, visit www.justice.gov/atr/contact/newcase.htm or contact the Atlantic City Resident Agency of the FBI at 609-677-6400.

AU Optronics Executive Convicted For LCD Price-Fixing Conspiracy

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WASHINGTON — Following a three-week trial, a federal jury in San Francisco today convicted an executive of the largest Taiwan liquid crystal display (LCD) producer for his participation in a worldwide conspiracy to fix the prices of thin-film transistor-liquid crystal display (TFT-LCD) panels sold worldwide, the Department of Justice announced.

Shiu Lung Leung, AU Optronics Corp.’s former senior manager in the Desktop Display Business Group, was found guilty today in U.S. District Court for the Northern District of California in San Francisco, of participating in a worldwide TFT-LCD price-fixing conspiracy from May 15, 2002 to Dec. 1, 2006.

AU Optronics Corp., based in Hsinchu, Taiwan, and its American subsidiary, AU Optronics Corp. America, headquartered in Houston, were found guilty on March 13, 2012, following an eight-week trial. Former AU Optronics Corp. president Hsuan Bin Chen and former AU Optronics Corp. executive vice president Hui Hsiung were also found guilty at that time. A mistrial was declared against Leung after that trial. Today’s verdict is the result of Leung’s retrial.

“This international price-fixing conspiracy impacted countless American consumers by raising the price of computer monitors, notebooks and televisions containing LCD panels,” said Scott D. Hammond, Deputy Assistant Attorney General of the Antitrust Division’s criminal enforcement program. “Today’s guilty verdict demonstrates that the Antitrust Division will continue to hold executives accountable for crimes that undermine a competitive marketplace.”

The indictment charged that AU Optronics Corp. participated in the worldwide price-fixing conspiracy from Sept. 14, 2001, to Dec. 1, 2006, and that its subsidiary joined the conspiracy as early as spring 2003. Today a jury found that Leung, along with the previously convicted companies and former executives, was guilty of fixing the prices of LCD panels sold in the United States. The conspirators fixed the prices of LCD panels during monthly meetings with their competitors, which were secretly held in hotel conference rooms, karaoke bars and tea rooms around Taiwan.

LCD panels are used in computer monitors and notebooks, televisions and other electronic devices. By the end of the conspiracy, the worldwide market for LCD panels was valued at $70 billion annually. The LCD price-fixing conspiracy affected some of the largest computer manufacturers in the world, including Hewlett Packard, Dell and Apple.

The company and its U.S. subsidiary were sentenced on Sept. 20, 2012, before Judge Susan Illston, to pay a $500 million criminal fine, matching the largest fine imposed against a company for violating U.S. antitrust laws. Chen and Hsiung were each sentenced to serve three years in prison and to each pay a $200,000 criminal fine.

As a result of this ongoing investigation, eight companies have pleaded guilty or been convicted to date and have been sentenced to pay criminal fines totaling more than $1.39 billion. Of the 22 charged executives, 13 have pleaded guilty or have been convicted and seven remain fugitives.  The executives who have been sentenced have been ordered to serve a combined total of 4,871 days in prison.

The maximum penalty for a Sherman Act violation for an individual is 10 years in prison and a $1 million fine. 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 fine.

Today’s charges are the result of a joint investigation by the Department of Justice Antitrust Division’s San Francisco Field Office and the FBI in San Francisco. Anyone with information concerning illegal conduct in the TFT-LCD industry is urged to call the Antitrust Division’s San Francisco Field Office at 415-436-6660 or visit www.justice.gov/atr/contact/newcase.htm.

Two Alabama Real Estate Investors and their Company Plead Guilty to Conspiracy to Rig Bids and Commit Mail Fraud Involving Real Estate Foreclosure Auctions

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Investigation Has Yielded 10 Guilty Pleas to Date

WASHINGTON — Two Alabama real estate investors and their company pleaded guilty today for their roles in conspiracies to rig bids and commit mail fraud at public real estate foreclosure auctions in southern Alabama, the Department of Justice announced.

Robert M. Brannon, of Laurel, Miss.; his son, Jason R. Brannon, of Mobile, Ala.; and their Mobile-based company, J & R Properties LLC, pleaded guilty today to an indictment originally returned on June 28, 2012 in the U.S. District Court for the Southern District of Alabama charging each of them with one count of bid rigging and one count of conspiracy to commit mail fraud.  According to court documents, the Brannons and their company conspired with others not to bid against one another at public real estate foreclosure auctions in southern Alabama. After a designated bidder bought a property at a public auction, which typically takes place at the county courthouse, the conspirators would generally hold a secret, second auction, at which each participant would bid the amount above the public auction price he or she was willing to pay. The highest bidder at the secret, second auction won the property.

The Brannons and their company were also charged with conspiring to use the U.S. mail to carry out a fraudulent scheme to acquire title to rigged foreclosure properties sold at public auctions at artificially suppressed prices, to make and receive payoffs to co-conspirators, and to cause financial institutions, homeowners and others with a legal interest in rigged foreclosure properties to receive less than the competitive price for the properties. The Brannons and their company are charged with participating in the bid-rigging and mail fraud conspiracies from as early as October 2004 until at least August 2007.

“The conspirators subverted the competitive bidding process by engaging in a collusive scheme to artificially depress prices at real estate foreclosure auctions and to defraud financial institutions and homeowners out of money and property,” said Renata B. Hesse, Acting Assistant Attorney General in charge of the Department of Justice’s Antitrust Division. “Today’s guilty pleas send a strong message that the division is committed to prosecuting those who fraudulently subvert competition for their own financial gain.”

“The success of this investigation represents the FBI’s staunch commitment to target and investigate those who are willing to abuse and exploit illegal advantages during this legal process for personal gain at the expense of suffering citizens and businesses,” said Acting Special Agent in Charge of the FBI’s Mobile Division Stephen E. Richardson.

Including today’s pleas, to date, eight individuals—Harold H. Buchman, Allen K. French, Bobby Threlkeld Jr., Steven J. Cox, Lawrence B. Stacy, David R. Bradley and the Brannons—and two companies—M & B Builders LLC and J & R Properties— have pleaded guilty in the U.S. District Court for the Southern District of Alabama in connection with this ongoing investigation.

Each violation of the Sherman Act carries a maximum penalty of 10 years in prison and a $1 million fine for individuals, and a $100 million fine for companies. The maximum fine for a Sherman Act charge may be increased to twice the gain derived from the crime or twice the loss suffered by the victims of the crime if either amount is greater than the statutory maximum fine. Each count of conspiracy to commit mail fraud carries a maximum penalty of 20 years in prison and a fine of $250,000 for individuals, and a fine of $500,000 for companies. The fine may be increased to twice the gross gain the conspirators derived from the crime or twice the gross loss caused to the victims of the crime by the conspirators.

The investigation into fraud and bid rigging at certain real estate foreclosure auctions in southern Alabama is being conducted by the Antitrust Division’s Atlanta Field Office and the FBI’s Mobile Office, with the assistance of the U.S. Attorney’s Office for the Southern District of Alabama. Anyone with information concerning bid rigging or fraud related to public real estate foreclosure auctions should contact the Antitrust Division’s Atlanta Field Office at 404-331-7100 or visit www.justice.gov/atr/contact/newcase.htm.

Today’s charges are part of efforts underway by President Obama’s Financial Fraud Enforcement Task Force (FFETF) which was created in November 2009 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 more than 10,000 financial fraud cases against nearly 15,000 defendants including more than 2,700 mortgage fraud defendants. For more information on the task force, visit www.StopFraud.gov.

Ohio Auto Parts Supplier Exec Pleads Guilty in Price Fixing and Bid Rigging Conspiracy

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OHIO AUTOMOBILE PARTS SUPPLIER EXECUTIVE PLEADS GUILTY IN PRICE-
FIXING AND BID-RIGGING CONSPIRACY

Executive Agrees to Serve One Year in U.S. Prison

WASHINGTON — An executive at the Ohio subsidiary of a Japanese automotive supplier pleaded guilty today for his role in a conspiracy to fix prices and rig bids of anti-vibration rubber parts sold in the United States and elsewhere, the Department of Justice announced. This is the first charge in the department’s ongoing investigation into price fixing and bid rigging in the automobile anti-vibration rubber parts industry, which is one of the department’s ongoing investigations into anticompetitive conduct in the automotive parts industry.

According to a one-count felony charge filed on Oct. 30, 2012, in the U.S. District Court for the Northern District of Ohio, in Toledo, Hiroshi Yoshida, a Japanese national employed at the Ohio-based U.S. subsidiary of an automobile anti-vibration rubber supplier headquartered in Saitama, Japan, participated in a conspiracy to rig bids for, and to fix prices of, automobile anti-vibration rubber parts sold in the United States and elsewhere. According to the charge, Yoshida’s involvement in the conspiracy began at least as early as October 2005 and continued until at least June 2011. The department said Yoshida and his co-conspirators carried out the conspiracy by agreeing, in meetings and discussions, to allocate the supply of certain automobile anti-vibration rubber parts, to exchange prices, to submit noncompetitive bids and to sell the parts at collusive and noncompetitive prices in the United States and elsewhere.

According to the plea agreement, Yoshida has agreed to serve 12 months and one day in a U.S. prison, to pay a $20,000 criminal fine and to cooperate with the department’s ongoing investigation.  Yoshida’s sentencing is scheduled to take place on Dec. 20, 2012.

Anti-vibration rubber parts are comprised primarily of rubber and metal, and are installed in automobiles to reduce engine and road vibration. Anti-vibration rubber parts are installed in suspension systems and engine mounts, as well as other parts of an automobile.

“This is the first charge in the division’s investigation into anticompetitive conduct involving automotive parts used to reduce engine and road vibration,” said Joseph Wayland, Acting Assistant Attorney General in charge of the Department of Justice’s Antitrust Division. “The aim of this multi-year conspiracy was to do away with competition among suppliers, through bid rigging and price fixing, in order to maximize profits.”

“We are pleased with the guilty plea entered today by Mr. Yoshida and his acceptance of responsibility, as the anti-vibration rubber parts industry is a critical component of the automobile manufacturing process,” said Stephen D. Anthony, Special Agent in Charge of the FBI Cleveland Division. “The Cleveland FBI is committed to working with our Department of Justice partners in the Antitrust Division to keep this industry and other critical industries competitive by aggressively pursuing any conspiracy in Northern Ohio that undermines free competition and our economy.”

Including Yoshida, nine companies and 12 executives have pleaded guilty or agreed to plead guilty in the department’s ongoing investigation into price fixing and bid rigging in the auto parts industry. Furukawa Electric Co. Ltd., DENSO Corp., Yazaki Corp., G.S. Electech Inc., Fujikura Ltd., Autoliv Inc. and TRW Deutschland Holding GmbH pleaded guilty and were sentenced to pay a total of more than $790 million in criminal fines. Nippon Seiki Co. Ltd. and Tokai Rika Co. Ltd. have agreed to plead guilty and await arraignment and sentencing. Additionally, Junichi Funo, Hirotsugu Nagata, Tetsuya Ukai, Tsuneaki Hanamura, Ryoki Kawai, Shigeru Ogawa, Hisamitsu Takada, Norihiro Imai, Kazuhiko Kashimoto, Toshio Sudo and Makoto Hattori have pleaded guilty and been sentenced to pay criminal fines and to serve jail sentences ranging from a year and a day to two years each.

Yoshida is charged with violating the Sherman Act, which carries a maximum sentence 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.

Today’s guilty plea arose from an ongoing federal antitrust investigation into price fixing, bid rigging and other anticompetitive conduct in the automobile anti-vibration rubber parts industry, which is being conducted by the Antitrust Division’s Chicago Field Office and the FBI’s Cleveland Field Office. Anyone with information concerning the subject of this investigation should contact the Antitrust Division’s Chicago Field Office at 312-353-7530 or visit www.justice.gov/atr/contact/newcase.htm.

North Carolina Real Estate Investor Pleads Guilty to Mail Fraud Scheme at Foreclosure Auctions

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The most recent Antitrust Division foreclosure auction case filing with the USAO of the Eastern District of North Carolina and the FBI suggests that extensive investigative resources are being expended to combat a variety of fraud schemes that plague foreclosure auctions.  Chief among them are “auction pooling” schemes engaged in by “auction rings” of conspirators who refrain from competing against each other inside the public auction who then have a private auction where the property “strike price” is bid higher by the conspirators.  The difference in prices between the public and private auctions is a good estimate of “loss” for Title 18 charging purposes or for calculating “commerce” for Title 15 USC Section 1 charging purposes.  Note that the Antitrust Division, like almost all government agencies, is struggling with tightened budgets and the fact that a case like this one is being pursued, that involves a significant expenditure of travel expenses, suggests that there is strong institutional focus with deep resources for these kinds of investigations.  Although it is never a good idea to engage in mortgage foreclosure auction fraud, it is a particularly bad idea in this enforcement environment.

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NORTH CAROLINA REAL ESTATE INVESTOR PLEADS GUILTY TO MAIL FRAUD SCHEME FOR THE PURCHASE OF REAL ESTATE AT PUBLIC FORECLOSURE AUCTIONS

WASHINGTON — A real estate investor pleaded guilty today to conspiring to commit mail fraud at public real estate foreclosure auctions held in Raleigh, N.C., and surrounding areas, the Department of Justice announced. This is the second charge in the department’s ongoing investigation into real estate foreclosure auctions in eastern North Carolina.

According to the one-count felony charge filed on Oct. 4, 2012, in the U.S. District Court for the Eastern District of North Carolina, in Greenville, real estate investor, Darren K. Phillips, conspired with a group of real estate speculators to participate in a scheme to defraud financial institutions, homeowners and others with a legal interest in select properties, and to obtain money and property from financial institutions, homeowners and others with a legal interest in rigged properties through false and fraudulent pretenses or representations.  According to the plea agreement, Phillips has agreed to cooperate with the department’s ongoing investigation.

The primary purpose of the conspiracy was to fraudulently acquire title to rigged foreclosure properties offered through public auctions at artificially suppressed prices, to make and receive payoffs from co-conspirators and to divert money away from financial institutions, homeowners and others with a legal interest in the rigged foreclosure properties, the department said in court papers.  The conspiracy resulted in mortgage holders, some of which were financial institutions, receiving a lower price for the foreclosure property.  Philips is charged with participating in the conspiracy beginning at least as early as February 2001 and continuing until at least May 2004.

“By artificially suppressing auction prices through payoffs and other illegal actions, the conspirators profited at the expense of homeowners and financial institutions,” said Scott D. Hammond, Deputy Assistant Attorney General in charge of the Antitrust Division’s criminal enforcement program.  “The division will continue to work with our law enforcement partners to investigate anticompetitive practices in real estate foreclosure auctions in North Carolina and elsewhere.”

Phillips is charged with conspiracy to commit mail fraud affecting a financial institution, which carries a maximum sentence of 30 years in prison and a $1 million fine.

Phillips is the second person to be charged in this investigation. In September 2010, Christopher Deans, a real estate speculator from Raleigh, pleaded guilty in the U.S. District Court in Greenville in connection with the investigation.

Today’s plea arose from an ongoing federal antitrust investigation of fraud and bidding irregularities in certain real estate foreclosure auctions in the Eastern District of North Carolina.  The investigation is being conducted by the Antitrust Division’s Atlanta Field Office and the FBI’s Atlanta Field Office, with assistance from the U.S. Attorney’s Office for the Eastern District of North Carolina. Anyone with information concerning bid rigging or fraud related to real estate foreclosure auctions should contact the Antitrust Division’s Atlanta Field Office at 404-331-7100, or visit www.justice.gov/atr/contact/newcase.htm.

Today’s plea is part of efforts underway by President Barack Obama’s Financial Fraud Enforcement Task Force.  President Obama established the interagency Financial Fraud Enforcement Task Force to wage an aggressive, coordinated and proactive effort to investigate and prosecute financial crimes.  The task force includes representatives from a broad range of federal agencies, regulatory authorities, inspectors general and state and local law enforcement who, working together, bring to bear a powerful array of criminal and civil enforcement resources.  The task force is working to improve efforts across the federal executive branch, and with state and local partners, to investigate and prosecute significant financial crimes, ensure just and effective punishment for those who perpetrate financial crimes, combat discrimination in the lending and financial markets, and recover proceeds for victims of financial crimes.  One component of the task force is the national Mortgage Fraud Working Group, co-chaired by Benjamin B. Wagner, U.S. Attorney for the Eastern District of California.  For more information on the task force, visit www.StopFraud.gov.

 

 

Northern California Real Estate Investor Agrees to Plead Guilty to Bid Rigging at Foreclosure Auctions

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The most recent Antitrust Division case filing with the FBI suggests that extensive investigative resources are being expended to combat fraud involving foreclosure auctions.  Chief among them are “auction pooling” schemes engaged in by “auction rings” of conspirators who refrain from competing against each other inside the public auction who then have a private auction where the property “strike price” is bid higher by the conspirators.  The difference in prices between the public and private auctions is a good estimate of “loss” for Title 18 charging purposes or for calculating “commerce” for Title 15 USC Section 1 charging purposes.  Although it is never a good idea to engage in mortgage foreclosure auction fraud, it is a particularly bad idea in this enforcement environment.

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THURSDAY, NOVEMBER 1, 2012
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NORTHERN CALIFORNIA REAL ESTATE INVESTOR AGREES TO PLEAD
GUILTY TO BID RIGGING AT PUBLIC FORECLOSURE AUCTIONS

Investigation Has Yielded 26 Plea Agreements to Date

WASHINGTON — A Northern California real estate investor has agreed to plead guilty for his role in conspiracies to rig bids and commit mail fraud at public real estate foreclosure auctions in Northern California, the Department of Justice announced.

A four-count felony charge was filed today in the U.S. District Court for the Northern District of California, in San Francisco, against Norman Montalvo, of Concord, Calif. Montalvo is the 26th individual to plead guilty or agree to plead guilty as a result of the department’s ongoing antitrust investigation into bid rigging and fraud at public real estate foreclosure auctions in Northern California.

According to court documents, Montalvo conspired with others 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 Francisco and San Mateo counties, Calif. Montalvo was also charged with a conspiracy to use the mail to carry out a scheme to fraudulently acquire title to selected properties sold at public auctions, to make and receive payoffs, and to divert to co-conspirators money that would have otherwise gone to mortgage holders and others.

The department said Montalvo conspired with others to rig bids and commit mail fraud at public real estate foreclosure auctions in San Francisco and San Mateo counties beginning as early as June 2008 and continuing until about September 2010.

“The real estate investors involved in the conspiracy illegally restrained competition at  foreclosure auctions by falsely creating the appearance of unfettered bidding while they were secretly colluding to suppress prices,” said Scott D. Hammond, Deputy Assistant Attorney General of the Antitrust Division’s criminal enforcement program. “The Antitrust Division remains committed to holding accountable those involved in anticompetitive acts that harm lenders and distressed homeowners.”

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 Francisco and San Mateo 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.

“Our vigorous pursuit in enforcing fraudulent anticompetitive practices at foreclosure auctions here in northern California is evident in this guilty plea,” said Joel Moss, Acting Special Agent in Charge of the FBI San Francisco Division. “Criminals who take advantage of the real estate auction process will be brought to justice by the FBI and the Department of 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. 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.

The charges today are the latest cases 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 Field Office at 415-436-6660, visit www.justice.gov/atr/contact/newcase.htm or call the FBI tip line at 415-553-7400.

Today’s charges are part of efforts underway by President Obama’s Financial Fraud Enforcement Task Force (FFETF), which was created in November 2009 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 more than 10,000 financial fraud cases against nearly 15,000 defendants, including more than 2,700 mortgage fraud defendants. For more information on the task force, visit www.stopfraud.gov.

Japanese Auto Parts Manufacturer Agrees to Plead Guilty

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JAPANESE AUTOMOBILE PARTS MANUFACTURER AGREES TO PLEAD GUILTY
TO PRICE FIXING AND OBSTRUCTION OF JUSTICE

Company Agrees to Pay $17.7 Million Criminal Fine

WASHINGTON — Nagoya, Japan-based Tokai Rika Co. Ltd., has agreed to plead guilty and to pay a $17.7 million criminal fine for its role in a conspiracy to fix prices of heater control panels (HCPs) installed in cars sold in the United States and elsewhere, the Department of Justice announced today. Tokai Rika has also agreed to plead guilty to a charge of obstruction of justice related to the investigation of the antitrust violation.

According to a two-count felony charge filed today in U.S. District Court for the Eastern District of Michigan in Detroit, Tokai Rika engaged in a conspiracy, by agreeing during meetings and conversations, to rig bids for, and to fix, stabilize and maintain the prices of HCPs sold to Toyota in the United States and elsewhere, on a model-by-model basis. According to the court document, Tokai Rika and its co-conspirators carried out the conspiracy from at least as early as September 2003 until at least February 2010.

Tokai Rika manufactures and sells a variety of automotive parts, including HCPs. HCPs are located in the center console of an automobile and control the temperature of the interior environment of a vehicle.

“The conspirators used code names and chose meeting places and times to avoid detection,” said Scott D. Hammond, Deputy Assistant Attorney General of the Antitrust Division’s criminal enforcement program. “They knew their actions would harm American consumers, and attempted to cover it up when caught. The division will continue to hold accountable companies who engage in anticompetitive conduct and who obstruct law enforcement.”

According to the charge, in or about February 2010, after the company and its executives and employees became aware that the FBI had executed a search warrant on Tokai Rika’s U.S. subsidiary, a company executive directed employees to delete electronic data and destroy paper documents likely to contain evidence of antitrust crimes in the United States and elsewhere. The department said that as a result, electronic data was deleted and paper documents were destroyed, and some of the deleted electronic data and destroyed paper documents were non-recoverable.

“Those who engage in price fixing and obstruction of legal process will face severe consequences for their illegal acts,” said Robert D. Foley III, Special Agent in Charge of the FBI’s Detroit Division. “The FBI is committed to stopping such criminal activity.”

As part of the plea agreement, which will be subject to court approval, Tokai Rika has agreed to cooperate with the department’s ongoing investigation.

Including Tokai Rika, nine companies and 11 executives have pleaded guilty or agreed to plead guilty in the department’s ongoing investigation into price fixing and bid rigging in the auto parts industry. Furukawa Electric Co. Ltd., DENSO Corp., Yazaki Corp., G.S. Electech Inc., Fujikura Ltd., Autoliv Inc. and TRW Deutschland Holding GmbH pleaded guilty and were sentenced to pay a total of more than $790 million in criminal fines. Nippon Seiki Co. Ltd., has agreed to plead guilty and awaits arraignment and sentencing. Additionally, Junichi Funo, Hirotsugu Nagata, Tetsuya Ukai, Tsuneaki Hanamura, Ryoki Kawai, Shigeru Ogawa, Hisamitsu Takada, Norihiro Imai, Kazuhiko Kashimoto, Toshio Sudo and Makoto Hattori have pleaded guilty and been sentenced to pay criminal fines and to serve jail sentences ranging from a year and a day to two years each.

Tokai Rika 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 for the company 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 maximum fine for a company found guilty of obstruction of justice is $500,000.

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 the Antitrust Division’s National Criminal Enforcement Section and the FBI’s Detroit Field Office with the assistance of the FBI headquarters’ International Corruption Unit. Anyone with information concerning the focus of this investigation is urged to call the Antitrust Division’s National Criminal Enforcement Section at 202-307-6694, visit www.justice.gov/atr/contact/newcase.htm, or call the FBI’s Detroit Field Office at 313-965-2323.

Japanese Freight Forwarder Agrees to Pay a $2.3 Million Criminal Fine

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JAPANESE FREIGHT FORWARDER AGREES TO PLEAD GUILTY TO CRIMINAL 

PRICE-FIXING CHARGES

Company Agrees to Pay a $2.3 Million Criminal Fine

WASHINGTON — A Japanese freight forwarding company has agreed to plead guilty and to pay a $2.3 million criminal fine for its role in a conspiracy to fix certain fees in connection with the provision of freight forwarding services for air cargo shipments from Japan to the United States, the Department of Justice announced today.

Including today’s charge, as a result of this investigation, 14 companies have either pleaded guilty or agreed to plead guilty and to pay more than $100 million in criminal fines.

According to the one count felony charge filed today in the U.S. District Court for the District of Columbia, Yamato Global Logistics Japan Co. Ltd. engaged in a conspiracy to fix and to impose certain freight forwarding service fees, including fuel surcharges and various security fees, charged to customers for services provided in connection with freight forwarding shipments of cargo shipped by air from Japan to the United States from about September 2002 until at least November 2007.

As part of the plea agreement, which will be subject to court approval, Yamato Global Logistics Japan Co. Ltd. has agreed to pay a criminal fine of $2,326,774 and to cooperate with the department’s ongoing antitrust investigation.

“Consumers ultimately were forced to pay higher prices on the goods they buy every day as a result of the noncompetitive and collusive service fees charged by these companies,” said Scott D. Hammond, Deputy Assistant Attorney General for the Antitrust Division’s criminal enforcement program. “Prosecuting these kinds of global price-fixing conspiracies continues to be a high priority of the Antitrust Division.”

According to the charges, the company carried out the conspiracy by, among other things, agreeing during meetings and discussions to coordinate and impose certain freight forwarding service fees and charges on customers purchasing freight forwarding services for cargo shipped by air from Japan to the United States.  The department said the company levied freight forwarding service fees in accordance with the agreements reached and engaged in meetings and discussions for the purpose of monitoring and enforcing adherence to the agreed-upon freight forwarding service fees.

Freight forwarders manage the domestic and international delivery of cargo for customers by receiving, packaging, preparing and warehousing cargo freight, arranging for cargo shipment through transportation providers such as air carriers, preparing shipment documentation and providing related ancillary services.


The company is charged with price fixing in violation of the Sherman Act, which carries a maximum $100 million 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 charges are the result of a joint investigation into the freight forwarding industry being conducted by the Antitrust Division’s National Criminal Enforcement Section, the FBI’s Washington Field Office and the Department of Commerce’s Office of Inspector General.  Anyone with information concerning price fixing or other anticompetitive conduct in the freight forwarding industry is urged to call the Antitrust Division’s National Criminal Enforcement Section at 202-307-6694 or visit www.justice.gov/atr/contract/newcase.htm or call the FBI’s Washington Field Office at 202-278-2000.

Three former financial services executives sentenced in Municipal Bonds Prosecution

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THURSDAY, OCTOBER 18, 2012
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THREE FORMER FINANCIAL SERVICES EXECUTIVES SENTENCED TO SERVE
TIME IN PRISON FOR ROLES IN CONSPIRACIES INVOLVING INVESTMENT
CONTRACTS FOR THE PROCEEDS OF MUNICIPAL BONDS

WASHINGTON — Three former financial services executives were sentenced today in U.S. District Court for the Southern District of New York, for their participation in conspiracies related to bidding for contracts for the investment of municipal bond proceeds and other municipal finance contracts, the Department of Justice announced. The three former executives were convicted after a three week trial on May 11, 2012.

Dominick P. Carollo, Steven E. Goldberg and Peter S. Grimm, all former executives of General Electric Co. (GE) affiliates, were sentenced by District Court Judge Harold Baer Jr. for their roles in the conspiracies. Carollo was sentenced to serve 36 months in prison and to pay a $50,000 criminal fine. Goldberg was sentenced to serve 48 months in prison and to pay a $90,000 criminal fine. Grimm was sentenced to serve 36 months in prison and to pay a $50,000 criminal fine.

“By manipulating the competitive bidding process, the conspirators cheated cities and towns out of money for important public works projects,” said Scott D. Hammond, Deputy Assistant Attorney General for the Antitrust Division’s criminal enforcement program. “The division and its law enforcement partners remain committed to rooting out such corruption.”

According to evidence presented at trial, while employed at GE affiliates, Carollo, Goldberg and Grimm participated in separate fraud conspiracies with various financial institutions and insurance companies and their representatives from as early as 1999 until 2006. These institutions and companies, or “providers,” offered a type of contract, known as an investment agreement, to state, county and local governments and agencies throughout the United States. The public entities were seeking to invest money from a variety of sources, primarily the proceeds of municipal bonds that they had issued to raise money for, among other things, public projects. Goldberg also participated in the conspiracies while employed at Financial Security Assurance Capital Management Services LLC.

At trial, the Department of Justice asserted that Carollo, Goldberg, Grimm and their co-conspirators corrupted the bidding process for dozens of investment agreements to increase the number and profitability of investment agreements awarded to the provider companies where they were employed. Carollo, Goldberg and Grimm deprived the municipalities of competitive interest rates for the investment of tax-exempt bond proceeds that were to be used by municipalities for various public works projects, such as for building or repairing schools, hospitals and roads. Evidence at trial established that they cost municipalities around the country millions of dollars.

“Today’s sentencing of Carollo, Goldberg and Grimm for their involvement manipulating a competitive bidding process of public contracts is the final step in a case that demonstrates the FBI’s commitment to investigate and prosecute those who illegally influence the financial markets for their own profit,” said Mary E. Galligan, Acting Assistant Special Agent Charge of the FBI in New York. “The co-conspirators scheme over many years deprived municipalities across the country of competitive interest rates on bonds, a yield that most cities would say they greatly need. The FBI will continue to work with our law enforcement partners to enforce the laws that protect our financial markets.”

“The sentences handed down today send a clear message that crime motivated by outright greed will land you in jail,” said Richard Weber, Chief, Internal Revenue Service – Criminal Investigation (IRS-CI). “Quite simply, the defendants stole money from taxpayers and conspired to manipulate the competitive bidding system to benefit themselves instead of the towns and cities that needed this money for important public works projects. IRS Criminal Investigation is committed to working with our law enforcement partners to uncover this kind of corruption and secure justice for American taxpayers.”

Carollo was found guilty on two counts of conspiracy to commit wire fraud and defraud the United States, Goldberg was found guilty on four counts of conspiracy to commit wire fraud and defraud the United States and Grimm was found guilty on three counts of conspiracy to commit wire fraud and defraud the United States.

A total of 20 individuals have been charged as a result of the department’s ongoing municipal bonds investigation. Including today’s convictions, a total of 19 individuals have been convicted or pleaded guilty, and one awaits trial. Additionally, one company has pleaded guilty.

The sentences announced today resulted from an ongoing investigation conducted by the Antitrust Division’s New York Office, the FBI and the IRS-CI. The division is coordinating its investigation with the U.S. Securities and Exchange Commission, the Office of the Comptroller of the Currency and the Federal Reserve Bank of New York.

Today’s convictions are part of efforts underway by President Obama’s Financial Fraud Enforcement Task Force (FFETF) which was created in November 2009 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 more than 10,000 financial fraud cases against nearly 15,000 defendants including more than 2,700 mortgage fraud defendants. For more information on the task force, visit www.stopfraud.gov.

Anyone with information concerning bid rigging and related offenses in any financial markets should contact the Antitrust Division’s New York Field Office at 212-335-8000, the FBI at 212-384-5000 or IRS-CI at 212-436-1761, or visit www.justice.gov/atr/contact/newcase.htm.

Two Former Hospital Execs Sentenced For Kickback Scheme

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WEDNESDAY, OCTOBER 17, 2012
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TWO FORMER HOSPITAL EMPLOYEES SENTENCED TO SERVE TIME IN
PRISON FOR PARTICIPATING IN KICKBACK SCHEMES AT NEW YORK CITY
HOSPITAL

WASHINGTON — Two former high-ranking employees of facilities operations at New York Presbyterian Hospital (NYPH) were sentenced in U.S. District Court for the Southern District of New York, in Manhattan, by Judge George B. Daniels today for their participation in two separate conspiracies involving kickbacks, the Department of Justice announced today.

Santo Saglimbeni, a former vice president of facilities operations at NYPH, was sentenced to serve 48 months in prison and ordered to pay a $250,000 criminal fine. Emilio “Tony” Figueroa, a former director of facilities operations at NYPH, was sentenced to serve 36 months in prison and ordered to pay a $25,000 criminal fine. Saglimbeni and Figueroa were ordered to jointly and severally pay $603,982 in total restitution to NYPH. Judge Daniels also entered a preliminary order of forfeiture for $2.3 million, which included certain bank accounts into which the kickback money from one of the schemes was deposited, as well as a parcel of land purchased with a portion of the kickback money, in Southampton, N.Y.

“Today’s sentences are consistent with the serious nature of the crimes for which the individuals were convicted,” said Acting Assistant Attorney General Joseph Wayland in charge of the Department of Justice’s Antitrust Division. “The division remains committed to holding accountable corrupt purchasing officials who undermine the competitive bidding process for their personal gain.”

On Feb. 2, 2012, after a four-week trial, Saglimbeni and Figueroa, along with Michael Yaron and two companies owned by him—Cambridge Environmental & Construction Corp., doing business as National Environmental Associates (Cambridge/NEA), and Oxford Construction & Development Corp.; Moshe Buchnik, the president of an asbestos abatement company doing business at NYPH; and Artech Corp., a sham company Saglimbeni created in the name of his mother, were each convicted of conspiracy to defraud NYPH. Additionally, Yaron, Cambridge/NEA, Oxford, Buchnik, Saglimbeni and Artech were also convicted of a wire fraud violation.

According to evidence presented at trial, the scheme to defraud NYPH centered on Saglimbeni, who with the assistance of Figueroa, awarded asbestos abatement, air monitoring and general construction contracts to Yaron, Buchnik and their companies in return for more than $2.3 million in kickbacks paid to Saglimbeni. A portion of those kickbacks were funneled by Yaron to Saglimbeni through Artech.

On July 31, 2012, Saglimbeni and Figueroa each pleaded guilty to additional mail fraud conspiracy and mail fraud violations. These charges were part of the same indictment but had been severed and were scheduled for a separate trial. According to the superseding indictment, the fraud scheme also centered on Saglimbeni, who with the assistance of Figueroa, awarded heating, ventilation and air conditioning (HVAC) contracts to an HVAC vendor in return for kickbacks in the form of cash goods and services paid to Saglimbeni and Figueroa.

On July 10, 2012, Yaron, Buchnik and the three companies were sentenced for their respective roles in the scheme. Yaron was sentenced to serve 60 months in prison and ordered to pay a $500,000 criminal fine. Buchnik was sentenced to serve 48 months in prison and ordered to pay a $500,000 criminal fine. Yaron’s companies, Cambridge/NEA and Oxford Construction, were each sentenced to pay a $1 million criminal fine. Artech was also sentenced to pay a $1 million criminal fine. Including Saglimbeni and Figueroa, 15 individuals and six companies have been convicted or pleaded guilty as a result of this investigation and have been sentenced to pay a total of more than $4 million in criminal fines and to serve more than 16 years in prison.

This antitrust investigation of bid rigging, fraud, bribery and tax-related offenses relating to the award of contracts by the facilities operations department of NYPH was conducted by the Antitrust Division’s New York Field Office with the assistance of the FBI and the Internal Revenue Service – Criminal Investigation’s New York Field Office. The Office of International Affairs in the Justice Department’s Criminal Division also provided assistance. Anyone with information concerning bid rigging, bribery, tax offenses or fraud related at NYPH should contact the Antitrust Division’s New York Field Office of the at 212-335-8000, visit www.justice.gov/atr/contact/newcase.htm, or call the FBI’s New York Division at 212-384-1000.