Tag Archives: Brent Snyder

Former Rabobank Trader Pleads Guilty for Scheme to Manipulate Yen Libor

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A former Coöperatieve Centrale Raiffeisen-Boerenleenbank B.A. (Rabobank) Japanese Yen derivatives trader pleaded guilty today for his role in a conspiracy to commit wire and bank fraud by manipulating Rabobank’s Yen London InterBank Offered Rate (LIBOR) submissions to benefit his trading positions.
Attorney General Eric H. Holder, Assistant Attorney General Leslie R. Caldwell of the Justice Department’s Criminal Division, Deputy Assistant Attorney General Brent Snyder of the Justice Department’s Antitrust Division and Assistant Director in Charge Valerie Parlave of the FBI’s Washington Field Office made the announcement.
Today, a criminal information was filed in the Southern District of New York charging Takayuki Yagami, a Japanese national, with one count of conspiracy to commit wire fraud and bank fraud.   Yagami pleaded guilty to the information before United States District Judge Jed S. Rakoff in the Southern District of New York.
“With this guilty plea, we take another significant step to hold accountable those who fraudulently manipulated the world’s cornerstone benchmark interest rate for financial gain,” said Attorney General Eric Holder.  “This conduct distorted transactions and financial products around the world.  Manipulating LIBOR effectively rigs the global financial system, compromising the fairness of world markets.  This plea demonstrates that the Justice Department will never waver, and we will never rest, in our determination to ensure the integrity of the marketplace and protect it from fraud.
“Today, a former Rabobank trader has pleaded guilty to participating in a scheme to manipulate the global benchmark interest rate LIBOR to benefit Rabobank’s trading positions,” said Assistant Attorney General Caldwell.    “This was the ultimate inside job.    As alleged, traders illegally influenced the very interest rate on which their trades were based, using fraud to gain an unfair advantage.    Takayuki Yagami is the ninth person charged by the Justice Department in connection with the industry-wide LIBOR investigation, and we are determined to pursue other individuals and institutions who engaged in this crime.”
“Today’s guilty plea is a significant step forward in the LIBOR investigation and demonstrates the Department’s firm commitment to individual accountability,” said Deputy Assistant Attorney General Snyder.  “We will continue to pursue aggressively other individuals involved in this or other illegal schemes that undermine free and fair financial markets.”
“Manipulating financial trading markets to create an unfair advantage is against the law,” said Assistant Director in Charge Parlave.  “Today’s guilty plea further underscores the FBI’s ability to investigate complex international financial crimes and bring the perpetrators to justice.  The Washington Field Office has committed significant time and resources including the expertise of Special Agents, forensic accountants and analysts to investigate this case along with our Department of Justice colleagues.  Their efforts send a clear message to anyone contemplating financial crimes: think twice or you will face the consequences.”
According to court documents, LIBOR is an average interest rate, calculated based on submissions from leading banks around the world, reflecting the rates those banks believe they would be charged if borrowing from other banks.    LIBOR serves as the primary benchmark for short-term interest rates globally and is used as a reference rate for many interest rate contracts, mortgages, credit cards, student loans and other consumer lending products.    The Bank of International Settlements estimated that as of the second half of 2009, outstanding interest rate contracts were valued at approximately $450 trillion.
At the time relevant to the charges, LIBOR was published by the British Bankers’ Association (BBA), a trade association based in London.    LIBOR was calculated for 10 currencies at 15 borrowing periods, known as maturities, ranging from overnight to one year.    The published LIBOR “fix” for Yen LIBOR at a specific maturity is the result of a calculation based upon submissions from a panel of 16 banks, including Rabobank.
Yagami admitted to conspiring with Paul Robson, of the United Kingdom, Paul Thompson, of Australia, and Tetsuya Motomura, of Japan.  Robson, Thompson and Motomura were charged with conspiracy to commit wire fraud and bank fraud as well as substantive counts of wire fraud in a fifteen-count indictment returned by a federal grand jury in the Southern District of New York on April 28, 2014.    All four are former employees of Rabobank.
Rabobank entered into a deferred prosecution agreement with the Department of Justice on Oct. 29, 2013 and agreed to pay a $325 million penalty to resolve violations arising from Rabobank’s LIBOR submissions.
According to allegations in the information and indictment, the four defendants traded in derivative products that referenced Yen LIBOR.    Robson worked as a senior trader at Rabobank’s Money Markets and Short Term Forwards desk in London; Thompson was Rabobank’s head of Money Market and Derivatives Trading Northeast Asia and worked in Singapore; Motomura was a senior trader at Rabobank’s Tokyo desk who supervised money market and derivative traders; and Yagami worked as a senior trader at Rabobank’s Money Market/FX Forwards desks in Tokyo and elsewhere in Asia.    In addition to trading derivative products that referenced Yen LIBOR, Robson also served as Rabobank’s primary submitter of Yen LIBOR to the BBA.
Robson, Thompson, Motomura and Yagami each entered into derivatives contracts containing Yen LIBOR as a price component .    The profit and loss that flowed from those contracts was directly affected by the relevant Yen LIBOR on certain dates.    If the relevant Yen LIBOR moved in the direction favorable to the defendants’ positions, Rabobank and the defendants benefitted at the expense of the counterparties.    When LIBOR moved in the opposite direction, the defendants and Rabobank stood to lose money to their counterparties.
As alleged in court filings, from about May 2006 to at least January 2011, the four defendants and others agreed to make false and fraudulent Yen LIBOR submissions for the benefit of their trading positions.    According to the allegations, sometimes Robson submitted rates at a specific level requested by a co-defendant, including Yagami, and consistent with the co-defendant’s trading positions.    Other times, Robson made a higher or lower Yen LIBOR submission consistent with the direction requested by a co-defendant and consistent with the co-defendant’s trading positions.    On those occasions, Robson’s manipulated Yen LIBOR submissions were to the detriment of, among others, Rabobank’s counterparties to derivative contracts.    Thompson, Motomura and Yagami (described in the indictment as Trader-R) made requests of Robson for Yen LIBOR submissions through electronic chats and email exchanges.
For example, according to court filings, on Sept. 21, 2007, Yagami asked Robson by email, “wehre do you think today’s libors are?    If you can I would like 1mth higher today.” Robson responded, “bookies reckon .85,” to which Yagami replied, “I have some fixings in 1mth so would appreciate if you can put it higher mate.” Robson answered, “no prob mate let me know your level.” After Yagami asked for “0.90% for 1mth,” Robson confirmed, “sure no prob[ ] I’ll probably get a few phone calls but no worries mate… there’s bigger crooks in the market than us guys!”
The indictment alleges that Robson accommodated the requests of his co-defendants.    For example, on Sept. 21, 2007, after Robson allegedly received a request from Yagami for a high 1-month Yen LIBOR, Rabobank submitted a 1-month Yen LIBOR rate of 0.90, which was 7 basis points higher than the previous day and 5 basis points above where Robson said that “bookies” predicted it, and which moved Rabobank’s submission from the middle to the highest of the panel.
According to court documents, the defendants were also aware that they were making false or fraudulent Yen LIBOR submissions.    For example, on May 10, 2006, Robson admitted in an email to Yagami that “it must be pretty embarrasing to set such a low libor.  I was very embarrased to set my 6 mth – but wanted to help thomo [Thompson].  Tomorrow it will be more like 33 from me.” At times, Robson referred to the submissions that he submitted on behalf of his co-defendants as “ridiculously high” and “obscenely high,” and acknowledged that his submissions would be so out of line with the other Yen LIBOR panel banks that he might receive a phone call about them from the BBA or Thomson Reuters.
The charges in the indictment are merely accusations, and the defendants are presumed innocent unless and until proven guilty.
The investigation is being conducted by special agents, forensic accountants, and intelligence analysts in the FBI’s Washington Field Office.    The prosecution is being handled by Senior Litigation Counsel Carol L. Sipperly and Trial Attorney Brian R. Young of the Criminal Division’s Fraud Section, and Trial Attorney Michael T. Koenig of the Antitrust Division.    The Criminal Division’s Office of International Affairs has provided assistance in this matter.
The Justice Department expresses its appreciation for the assistance provided by various enforcement agencies in the United States and abroad.    The Commodity Futures Trading Commission’s Division of Enforcement referred this matter to the department and, along with the U.K. Financial Conduct Authority, has played a major role in the LIBOR investigation.  The Securities and Exchange Commission also has played a significant role in the LIBOR series of investigations, and the department expresses its appreciation to the United Kingdom’s Serious Fraud Office for its assistance and ongoing cooperation.     The department has worked closely with the Dutch Public Prosecution Service and the Dutch Central Bank in the investigation of Rabobank.    Various agencies and enforcement authorities from other nations are also participating in different aspects of the broader investigation relating to LIBOR and other benchmark rates, and the department is grateful for their cooperation and assistance.
This prosecution 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.  For more information about the task force visit: www.stopfraud.com.

 

FORMER TOP EXECUTIVE OF JAPANESE AUTOMOTIVE PARTS

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WASHINGTON — A Detroit federal grand jury returned a one-count indictment against a former top executive of a Japanese manufacturer of automotive parts for his participation in a conspiracy to fix prices of seatbelts, the Department of Justice announced today.

The indictment, filed today in the U.S. District Court for the Eastern District of Michigan, charges Gikou Nakajima, a former executive at Takata Corp., with participating in a conspiracy to suppress and eliminate competition in the automotive parts industry by agreeing to rig bids for, and to fix, stabilize and maintain the prices of, seatbelts sold to Toyota Motor Corp., Honda Motor Company Ltd., Nissan Motor Co. Ltd., Mazda Motor Corp., Fuji Heavy Industries Ltd. – more commonly known by its brand name, Subaru – and/or certain of their subsidiaries, for installation in vehicles sold in the United States and elsewhere.  Nakajima served as director of customer relations division at Takata, the highest-level global sales executive at the company, from June 2005 until at least June 2009.

“Today’s indictment demonstrates that the Antitrust Division continues to hold accountable executives who collude with their competitors,” said Brent Snyder, Deputy Assistant Attorney General for the Antitrust Division’s criminal enforcement program.  “The division will not tolerate executives participating in – and directing their subordinates to participate in – conspiracies to raise the prices on automotive parts that are essential to the safety of U.S. consumers.”

The indictment alleges, among other things, that from at least as early as September 2005 and continuing until June 2009, Nakajima and others attended meetings with co-conspirators and reached collusive agreements to rig bids, allocate the supply and fix the prices of seatbelts sold to the automobile manufacturers. It alleges that Nakajima participated directly in the conspiratorial conduct, and that he directed, authorized and consented to his subordinates’ participation.

Takata is a Tokyo-based manufacturer of automotive parts, including seatbelts.  Takata supplies automotive parts to automobile manufacturers in the United States, in part, through its U.S. subsidiary, TK Holdings Inc., located in Auburn Hills, Michigan.  Takata pleaded guilty on Dec. 5, 2013, for its involvement in the conspiracy, and was sentenced to pay criminal fine of $71.3 million.  Four other executives from Takata have pleaded guilty and have been sentenced to serve time in a U.S. prison and to pay criminal fines for their roles in the conspiracy.

Including Nakajima, 35 individuals have been charged in the government’s ongoing investigation into price fixing and bid rigging in the auto parts industry, 24 of whom have pleaded guilty or agreed to plead guilty.  Of those, 22 have been sentenced to serve prison terms ranging from a year and one day to two years.  Additionally, 27 companies have pleaded guilty or agreed to plead guilty and have agreed to pay a total of more than $2.3 billion in fines.

Nakajima 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 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 indictment is 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 four of the Antitrust Division’s criminal enforcement sections and the FBI.  Today’s charge was brought by the Antitrust Division’s Washington Criminal I Section and the FBI’s Detroit Field Office, with the assistance of the FBI headquarters’ International Corruption Unit.  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 Detroit Field Office at 313-965-2323.

Japanese Automotive Parts Manufacturer Executive Indicted for Role in Conspiracy to Fix Prices and for Obstruction of Justice

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A Detroit federal grand jury returned a two-count indictment against an executive of a Japanese manufacturer of automotive parts for his participation in a conspiracy to fix prices of heater control panels and for obstruction of justice for ordering the destruction of evidence related to the conspiracy, the Department of Justice announced today.

The indictment, filed today in the U.S. District Court for the Eastern District of Michigan, charges Hitoshi Hirano with participating in a conspiracy to suppress and eliminate competition in the automotive parts industry by agreeing to rig bids for, and to fix, stabilize and maintain the prices of heater control panels sold to Toyota Motor Corp. and Toyota Motor Engineering & Manufacturing North America Inc. (collectively, Toyota) for installation in vehicles manufactured and sold in the United States and elsewhere.    Hirano, who served as an executive managing director at Tokai Rika Co. Ltd., was also charged with knowingly and corruptly persuading, and attempting to persuade, executives of Tokai Rika to destroy documents and delete electronic data that may contain evidence of antitrust crimes in the United States and elsewhere.

“The Antitrust Division will not tolerate executives directing their subordinates to engage in illegal cartels and conspiracies,” said Brent Snyder, Deputy Assistant Attorney General for the Antitrust Division’s criminal enforcement program.    “Attempts to then obstruct justice and destroy evidence will give rise to additional charges.”

The indictment alleges, among other things, that from at least as early as October 2003 and continuing until at least February 2010, Hirano and others attended conspiratorial meetings with co-conspirators and reached collusive agreements to rig bids, allocate the supply and fix the prices for heater control panels sold to Toyota.    According to the indictment, Hirano participated directly in the conspiratorial conduct, and directed, authorized and consented to his subordinates’ participation.    In addition, the indictment charges that in February 2010, after Hirano learned that the FBI had searched Tokai Rika’s U.S. subsidiary, he knowingly and corruptly persuaded employees at Tokai Rika to destroy paper documents and delete electronic data intending to prevent the grand jury from obtaining evidence of antitrust crimes.

Tokai Rika is a manufacturer of automotive parts, including heater control panels, based in Nagoya, Japan.    Tokai Rika pleaded guilty on Dec. 12, 2012, for its role in the conspiracy and to obstruction of justice, and was sentenced to pay a $17.7 million criminal fine.

Heater control panels are located in the center console of an automobile and control the temperature of the passenger compartment of a vehicle.    Heater control panels differ by function and design for a particular vehicle model.    Examples include automatic heater control panels, which maintain the temperature within the vehicle to a designated temperature point, and manual heater control panels, which regulate the temperature through manual controls operated by vehicle occupants.

Including Hirano, 34 individuals have been charged in the government’s ongoing investigation into price fixing and bid rigging in the auto parts industry, 24 of whom have pleaded guilty or agreed to plead guilty.    Of those, 22 have been sentenced to serve prison terms ranging from a year and one day to two years. Additionally, 27 companies have pleaded guilty or agreed to plead guilty and have agreed to pay a total of more than $2.3 billion in fines.

Hirano 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 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 penalty for obstruction of justice is 20 years in prison and a $250,000 criminal fine for individuals.

Today’s indictment is 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 four of the Antitrust Division’s criminal enforcement sections and the FBI.    Today’s charges were brought by the Antitrust Division’s Washington Criminal I Section and the FBI’s Detroit Field Office, with the assistance of the FBI headquarters’ International Corruption Unit.    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 Detroit Field Office at 313-965-2323.

Bridgestone Corp. Executive Agrees to Plead Guilty for Fixing Prices and Rigging Bids on Auto Parts Installed in U.S. Cars

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A former Bridgestone Corp. executive has agreed to plead guilty and to serve 18 months in a U.S. prison for his role in an international conspiracy to fix prices and rig bids of automotive anti-vibration rubber parts sold in the United States and elsewhere, the Department of Justice announced today.

According to the one-count felony charge filed today in the U.S. District Court for the Northern District of Ohio in Toledo, Yusuke Shimasaki, along with co-conspirators, engaged in a conspiracy to allocate sales of, to rig bids for, and to fix, raise and maintain the prices of automotive anti-vibration rubber parts sold to Toyota Motor Corp., Nissan Motor Co. Ltd., 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, Shimasaki participated in the anti-vibration rubber conspiracy from at least as early as January 2001 until at least December 2008.  During that time period, he was employed by Bridgestone as a sales manager, an executive vice president at Bridgestone APM Co., in Findlay, Ohio, and as a general sales manager.  According to the plea agreement, in addition to serving time in prison, Shimasaki has also agreed to pay a $20,000 criminal fine and to cooperate in the department’s investigation.  The plea agreement is subject to court approval.

“The charge today once again demonstrates the Antitrust Division’s vigorous commitment to hold individuals accountable for engaging in anticompetitive conduct,” said Brent Snyder, Deputy Assistant Attorney General for the Antitrust Division’s criminal enforcement program.  “The division’s ongoing investigation has resulted in more than two dozen executives serving prison time for their participation in illegal conspiracies involving auto parts.”

Bridgestone manufactures and sells a variety of automotive parts, including anti-vibration rubber parts, which are comprised primarily of rubber and metal, and are installed in suspension systems and engine mounts as well as other parts of an automobile.  They are installed in automobiles for the purpose of reducing road and engine vibration.  On Feb. 13, 2014, the Department of Justice announced that Bridgestone had agreed to plead guilty and to pay a $425 million criminal fine for its role in the conspiracy.  On April 15, 2014, Yasuo Ryuto, Isao Yoshida, two former executives of Bridgestone Corp., and Yoshiyuki Tanaka, a current executive, were indicted  their roles in a conspiracy to fix prices of automotive anti-vibration rubber parts.

To date, 33 individuals have been charged in the government’s ongoing investigation into price fixing and bid rigging in the auto parts industry.  Additionally, 26 companies have pleaded guilty or agreed to plead guilty and have agreed to pay a total of more than $2.29 billion in fines.

Shimasaki is charged with price fixing and bid rigging 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.

Today’s charge is 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 charge was 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.

Three Bridgestone Corp. Executives Indicted for Roles in Fixing Prices and Rigging Bids on Auto Parts Installed in U.S. Cars

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A Cleveland federal grand jury returned an indictment against one current executive and two former executives of Bridgestone Corp. for their roles in an international conspiracy to fix prices of automotive anti-vibration rubber parts sold in the United States and elsewhere, the Department of Justice announced today.

The indictment, filed today in the U.S. District Court for the Northern District of Ohio in Toledo, charges Yoshiyuki Tanaka, Yasuo Ryuto and Isao Yoshida, all Japanese nationals, with participating in a conspiracy to suppress and eliminate competition in the automotive parts industry by agreeing to allocate sales of, to rig bids for, and to fix, raise and maintain the prices of anti-vibration rubber parts sold to Toyota Motor Corp., Nissan Motor Corp., Suzuki 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.

“Today’s indictment again demonstrates that antitrust violations are not just corporate offenses but also crimes by individuals,” said Brent Snyder, Deputy Assistant Attorney General for the Antitrust Division’s criminal enforcement program.    “The division will continue to vigorously prosecute executives who circumvent the law in order to maximize profits by harming consumers.”

Tanaka was employed by Bridgestone in various positions involving anti-vibration rubber parts sales, including manager at Bridgestone and executive vice-president at Bridgestone’s U.S. subsidiary Bridgestone APM Co., from approximately 1991 through at least February 2011.    He is currently manager of the anti-vibration rubber original equipment international planning section.    Ryuto was employed by Bridgestone in various positions involving anti-vibration rubber parts sales, including general manager and director, from approximately 1991 through at least June 2008; he is no longer employed by the company.    Yoshida was employed by Bridgestone in various positions involving anti-vibration rubber parts sales, including manager and general manager, from approximately 1997 through at least September 2008 ; he is no longer employed by the company.

The indictment alleges that Tanaka, Ryuto, Yoshida and their co-conspirators conducted meetings and communications in Japan to reach collusive agreements regarding the sale of automotive anti-vibration rubber products to automakers in the United States and elsewhere.    The indictment alleges that the conspiracy involved agreements affecting the Tacoma, Camry, Tundra, Sequoia, Corolla, Sienna, Venza and Highlander.    According to the indictment, Tanaka participated in the conspiracy from at least as early as January 2004 until at least June 2008; Ryuto participated in the conspiracy from at least as early as April 2001 until at least May 29, 2008; and Yoshida participated in the conspiracy from at least as early as January 2001 until at least July 2008.

Bridgestone manufactures and sells a variety of automotive parts, including anti-vibration rubber parts, which are comprised primarily of rubber and metal, and are installed in suspension systems and engine mounts as well as other parts of an automobile.    They are installed in automobiles for the purpose of reducing road and engine vibration.    On Feb. 13, 2014, Bridgestone agreed to plead guilty and to pay a $425 million criminal fine for its role in the conspiracy.

To date, 32 individuals have been charged in the government’s ongoing investigation into price fixing and bid rigging in the auto parts industry.    Additionally, 26 companies have pleaded guilty or agreed to plead guilty and have agreed to pay a total of more than $2.29 billion in fines.

Each of the individuals is charged with price fixing and bid rigging 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.

Today’s 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.    These cases 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.

Former Denso Corp. Executive Agrees to Plead Guilty to Obstructing Automotive Parts Investigation

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A former executive of Japan-based Denso Corp. has agreed to plead guilty to obstruction of justice charges in connection with the Antitrust Division’s investigation into a conspiracy to fix the prices of heater control panels installed in cars sold in the United States and elsewhere, the Department of Justice announced today.  The executive has also agreed to serve one year and one day in a U.S. prison.

A one-count felony charge was filed today in U.S. District Court for the Eastern District of Michigan in Detroit against Kazuaki Fujitani, a former director of Denso Corp. in Japan.  According to the charge, Fujitani, who was general manager of the Toyota Sales Division at the time of the offense, deleted numerous e-mails and electronic documents in February and March 2010 upon learning that the FBI had executed a search warrant on Denso’s U.S. subsidiary.  The deleted documents contained communications between Denso and one or more of its competitors regarding requests for price quotation made by Toyota for heater control panels for the Toyota Avalon.  The plea agreement is subject to court approval.

“Today’s charge demonstrates the Antitrust Division’s commitment to protecting the integrity of grand jury investigations,” said Brent Snyder, Deputy Assistant Attorney General of the Antitrust Division’s criminal enforcement program.  “The division will vigorously prosecute individuals who destroy evidence in an attempt to conceal their participation in illegal conspiracies.”

In March 2012, Denso pleaded guilty and was sentenced to pay a $78 million criminal fine for its role in conspiracies to fix the prices of heater control panels and electronic control units.

Including Fujitani, 29 individuals have been charged in the department’s ongoing investigation into price fixing and bid rigging in the auto parts industry.  Additionally, 26 companies have pleaded guilty or agreed to plead guilty and have agreed to pay a total of over $2.25 billion in fines.

Fujitani is charged with obstruction of justice, which carries a maximum penalty of 20 years in prison and a criminal fine of $250,000 for individuals.

Today’s charge 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 charge was brought by the National Criminal Enforcement Section and the San Francisco Office of the Antitrust Division, with the assistance of the Detroit Field Office of the FBI.  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 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.

Bridgestone Corp. Agrees to Plead Guilty to Price Fixing on Automobile Parts Installed in U.S. Cars

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WASHINGTON — Bridgestone Corp., a Tokyo, Japan-based company, has agreed to plead guilty and to pay a $425  million criminal fine for its role in a conspiracy to fix prices of automotive  anti-vibration rubber parts 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 Northern  District of Ohio in Toledo, Bridgestone engaged in a conspiracy to allocate  sales of, to rig bids for and to fix, raise and maintain the prices of automotive  anti-vibration rubber parts it sold to Toyota Motor Corp., Nissan Motor Corp.,  Fuji Heavy Industries Ltd., Suzuki Motor Corp., Isuzu Motors Ltd. and certain  of their subsidiaries, affiliates and suppliers, in the United States and  elsewhere.  In addition to the criminal  fine, Bridgestone also has agreed to cooperate with the department’s ongoing  auto parts investigations.  The plea  agreement is subject to court approval.

In October 2011,  Bridgestone pleaded guilty and paid a $28 million fine for price-fixing and  Foreign Corrupt Practices Act violations in the marine hose industry, but did  not disclose at the time of the plea that it had also participated in the  anti-vibration rubber parts conspiracy.  Bridgestone’s  failure to disclose this conspiracy was a factor in determining the $425  million fine.

“The Antitrust Division will take a hard line when repeat offenders  fail to disclose additional anticompetitive behavior,” said Brent Snyder, Deputy  Assistant Attorney General for the Antitrust Division’s criminal enforcement  program.  “Today’s significant fine  reaffirms the division’s commitment to holding companies accountable for  conduct that harms U.S. consumers.”

According to the  charges, Bridgestone and its co-conspirators carried out the conspiracy through  meetings and conversations in which they discussed and agreed upon bids, prices  and allocating sales of certain automotive anti-vibration rubber products.  After exchanging this information with its  co-conspirators, Bridgestone submitted bids and prices in accordance with those  agreements and sold and accepted payments for automotive anti-vibration rubber  parts at collusive and noncompetitive prices.  Bridgestone’s involvement in the conspiracy to  fix prices of anti-vibration rubber parts lasted from at least January 2001  until at least December 2008.

“The Cleveland  Division of the FBI is committed to aggressively investigating price-fixing and  other antitrust violations,” said Special Agent in Charge Stephen D. Anthony.  “The illegal activity in this case threatened  the basic tenet of free competition.  We  are pleased with the acceptance of responsibility along with the significant  penalty which will be paid by Bridgestone for this conspiracy to fix prices.  Together with our partners in the Department  of Justice’s Antitrust Division, we will continue to combat illegal practices  which threaten consumers across the United States.”

Bridgestone manufactures and sells a variety of  automotive parts, including anti-vibration  rubber parts, which are comprised primarily of rubber and metal, and are  installed in suspension systems and engine mounts as well as other parts of an  automobile.  They are installed in  automobiles for the purpose of reducing road and engine vibration.

Including  Bridgestone, 26 companies have pleaded guilty or agreed to plead guilty in the department’s  ongoing investigation into price fixing and bid rigging in the automotive parts  industry.  The companies have agreed to  pay a total of more than $2 billion in criminal fines.  Additionally, 28 individuals have been  charged.

Bridgestone is  charged with price fixing in violation of the Sherman Act, which carries  maximum penalties 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 is 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 charge was 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 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.

Former Bank of America Executive Pleads Guilty for Role in Conspiracy and Fraud Involving Investment Contracts for Municipal Bonds Proceeds

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A former Bank of America executive pleaded guilty today for his participation in a conspiracy and scheme to defraud related to bidding for contracts for the investment of municipal bond proceeds and other municipal finance contracts, the Department of Justice announced.

Phillip D. Murphy, the former managing director of Bank of America’s municipal derivatives products desk from 1998 to 2002, pleaded guilty today before U.S. District Judge Max O. Cogburn Jr. in the U.S. District Court for the Western District of North Carolina to participating in a fraud conspiracy and wire fraud scheme with employees of  Rubin/Chambers, Dunhill Insurance Services Inc., also known as CDR Financial Products, a broker of municipal finance contracts, and others.  Murphy also pleaded guilty to conspiring with others to make false entries in the reports and statements originating from his desk, which were sent to bank management.

Murphy was indicted by a grand jury on July 19, 2012.  According to the indictment, Murphy  participated in a wire fraud scheme and separate fraud conspiracies that began as early as 1998 and continued until 2006.

“By manipulating what was intended to be a competitive bidding process, the conspirators defrauded municipalities, public entities and taxpayers across the country,” said Brent Snyder, Deputy Assistant Attorney General of the Antitrust Division’s Criminal Enforcement Program.  “Today’s guilty plea reaffirms the Antitrust Division’s continued efforts to hold accountable those who corrupt and subvert the competitive process in our financial markets.”

Public entities seek to invest money from a variety of sources, primarily the proceeds of municipal bonds that they issue, to raise money for, among other things, public projects.  Public entities typically hire a broker to conduct a competitive bidding process for the award of the investment agreements and often for other municipal finance contracts.

According to the charges, Murphy conspired with CDR and others to increase the number and profitability of investment agreements and other municipal finance contracts awarded to Bank of America.  Murphy won investment agreements through CDR’s manipulation of the bidding process in obtaining losing bids from other providers, which is explicitly prohibited by U.S. Treasury regulations.  As a result of the information, various providers won investment agreements and other municipal finance contracts at artificially determined prices.  In exchange for this information, Murphy submitted intentionally losing bids for certain investment agreements and other contracts when requested, and, on occasion, agreed to pay or arranged for kickbacks to be paid to CDR and other co-conspirator brokers.

Murphy and his co-conspirators misrepresented to municipal issuers that the bidding process was competitive and in compliance with U.S. Treasury regulations.  This caused the municipal issuers to award investment agreements and other municipal finance contracts to providers that otherwise would not have been awarded the contracts if the issuers had true and accurate information regarding the bidding process.  Such conduct placed the tax-exempt status of the underlying bonds in jeopardy.

“Mr. Murphy’s actions undermined the public’s trust when he conspired to manipulate a competitive bidding process,” said Richard Weber, Chief, IRS Criminal Investigation (IRS-CI).  “IRS-CI has experienced great success in unraveling significant and complex financial frauds as we work in close collaboration with our law enforcement partners.”

“Mr. Murphy ripped off hard working American taxpayers and cash-strapped municipalities all in pursuit of his own lucre,” said George Venizelos, Assistant Director in Charge of the FBI’s New York Field Office.  “Let this serve as a reminder to others who are entrusted to act in the public’s best interest; your lack of candor won’t go without notice.”

Murphy pleaded guilty to two counts of conspiracy and one count of wire fraud.  The fraud conspiracy carries a maximum penalty of five years in prison and a $250,000 fine.  The wire fraud charge carries a maximum penalty of 30 years in prison and a $1 million fine.  The false bank records conspiracy carries a maximum penalty of five years in prison and a $250,000 fine.  The maximum fines for each of these offenses 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 Murphy, a total of 17 individuals have been convicted or pleaded guilty.  Additionally, one company has pleaded guilty.

The prosecution is being handled by Steven Tugander, Richard Powers, Eric Hoffmann, Patricia Jannaco and Stephanie Raney of the Antitrust Division.  Assistant U.S. Attorneys Kurt Meyers, Michael Savage and Mark Odulio of the U.S. Attorney’s Office for the Western District of North Carolina have also provided valuable assistance in this matter.  The guilty plea announced today resulted from a wide-ranging investigation conducted by the Antitrust Division’s New York office, the FBI and the IRS-CI.  The division coordinated 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 guilty plea 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. attorney’s 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 .

AISAN INDUSTRY CO. LTD. AGREES TO PLEAD GUILTY TO PRICE FIXING ON AUTOMOBILE PARTS INSTALLED IN U.S. CARS

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WASHINGTON — Aisan Industry Co. Ltd., an Obu, Japan-based company, has agreed to  plead guilty and to pay a criminal fine of $6.86 million for its role in a  price-fixing conspiracy involving electronic  throttle bodies 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, Aisan engaged in a  conspiracy to rig bids for, and to fix, stabilize and maintain the prices of  electronic throttle bodies sold to Nissan Motor Co. Ltd. and certain of its  subsidiaries in the United States and elsewhere.  In addition to the criminal fine, Aisan has also agreed to  cooperate with the department’s ongoing auto parts investigations. The plea agreement is  subject to court approval.
“The Antitrust Division will continue to hold companies accountable for  anticompetitive conduct that impacts the automobile industry in the United  States,” said Brent Snyder, Deputy Assistant Attorney General of the Antitrust  Division’s criminal enforcement program.  “To date, 25 companies have been charged as  part of the Antitrust Division’s ongoing auto parts investigation.”

According to the charges, Aisan and its co-conspirators carried out the price-fixing conspiracy  through meetings and conversations in which they discussed and agreed upon bids  and price quotations for electronic throttle bodies.  Aisan’s  involvement in the conspiracy to fix prices of electronic  throttle bodies lasted from at least as early as October 2003 until at  least February 2010.

Aisan manufactures and sells automotive electronic throttle bodies,  which are part of the air intake system in an engine that controls the amount  of air flowing into an engine’s combustion chamber.  By controlling air flow within an engine, the  electronic throttle body controls engine speed.

Including Aisan, 25 corporations have pleaded guilty or agreed to plead  guilty in the department’s investigation into price fixing and bid rigging in  the auto parts industry.  The companies  have agreed to pay a total of more than $1.8 billion in fines.  Additionally, 28 individuals have been charged.

Aisan 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 San  Francisco Office of the Antitrust Division with assistance provided by the  National Criminal Enforcement Section of the Antitrust Division, the Detroit  Field Office of the FBI, and the FBI headquarters’ National Criminal Enforcement Section.  Anyone with information concerning  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.

FORMER PRESIDENT AND VICE PRESIDENT OF DIAMOND ELECTRIC AGREE TO PLEAD GUILTY TO PARTICIPATING IN AUTO PARTS PRICE-FIXING CONSPIRACY

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WASHINGTON — The former president and vice president of Osaka,  Japan-based Diamond Electric Mfg. Co. Ltd. have agreed to plead guilty for  their participation in a global conspiracy to fix prices of ignition coils  installed in cars sold in the United States and elsewhere, the Department of Justice  announced today.  Ignition coils are part  of a car’s fuel ignition system and release electric energy suddenly to ignite  a fuel mixture.

Separate  felony charges were filed today in U.S. District Court for the Eastern District  of Michigan in Detroit against Shigehiko Ikenaga and Tatsuo Ikenaga.  According to court documents, from at least as  early as July 2003 until at least February 2010, the former executives participated  in a conspiracy to rig bids for, and to fix, stabilize and maintain the prices  of ignition coils sold to automotive manufacturers for installation in vehicles  manufactured in the United States and elsewhere.  The automotive manufacturers included Ford  Motor Co., Toyota Motor Corp. and Fuji Heavy Industries Ltd. – more commonly  known by its brand name, Subaru – and certain of their subsidiaries.

Shigehiko  Ikenaga, president of Diamond Electric during the relevant period, agreed to  serve 16 months in a U.S. prison.  Tatsuo  Ikenaga, Diamond Electric’s managing director, and then vice president  beginning in 2008, agreed to serve 13 months in a U.S. prison.  Tatsuo Ikenaga also simultaneously served as president  of Diamond Electric’s U.S. subsidiary during the relevant period.  Additionally, the former executives have each  agreed to pay a $5,000 criminal fine and to cooperate with the department’s  ongoing investigation.  Each of the  Ikenaga’s plea agreements is subject to court approval.  On Sept. 10, 2013, Diamond Electric pleaded  guilty for its involvement in the conspiracy and was fined $19 million.

“The two former executives charged  today once again demonstrate the Antitrust Division’s vigorous commitment to  hold individuals accountable for engaging in anticompetitive conduct,” said  Brent Snyder, Deputy Assistant Attorney General for the Antitrust Division’s  criminal enforcement program.  “The division’s  ongoing investigation has resulted in more than two dozen executives serving  prison time for their participation in illegal, auto parts conspiracies.”

Diamond  Electric is a manufacturer of ignition coils and was engaged in the sale of  ignition coils in the United States and elsewhere. According to the charges, the  Diamond Electric executives and their co-conspirators carried out the  conspiracy by, among other things, agreeing during meetings and communications  to coordinate bids submitted to automobile manufacturers.

Each  executive is charged with price fixing and bid rigging 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, 28 individuals and 24 companies have been charged in the  government’s ongoing investigation into price fixing and bid rigging in the  auto parts industry.

Today’s charges  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 pleas are the result of the National  Criminal Enforcement Section with the assistance of the Detroit Field Office of  the FBI.  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 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.

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