Tag Archives: plea agreement

Connolly’s Cartel Capers: Seventh Circuit Panel to Rehear Motorola Mobility v. AU Optronics

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Seventh Circuit Panel to Rehear Motorola Mobility v. AU Optronics: A Preview of Some of the FTAIA Issues in Component International Price Fixing Cases

 by Robert Connolly 

The Seventh Circuit has decided to rehear the appeal from a judgment dismissing nearly Motorola’s entire $3.5 billion antitrust claim against foreign manufacturers of LCD panels. The Court has not yet set a schedule for the filing of supplemental briefs.

In Motorola Mobility v. AU Optronics Corp, No. 14-8003, 2014 WL 1243797 (7th Cir. Mar. 27, 2014)(vacated), the Seventh Circuit (J. Posner) upheld a lower court ruling dismissing most of Motorola’s damage claims from price fixing of LCD panels. The commerce at issue was LCD panels sold by defendants to Motorola’s foreign subsidiaries and incorporated into products such as cell phones. The finished product was imported into the U.S. The Court found that a damage claim based on the purchases by Motorola’s foreign subsidiaries was barred by the FTAIA. The Court held that because the price-fixed panels were sold to customers overseas, the effect on U.S. commerce was indirect, even though the price of the finished product later imported into the U.S. may have been inflated by the component price fixing.

The Motorola Mobility Court rejected the view that the component price fixing had a “direct, substantial and reasonably foreseeable effect” on U.S. commerce. The Court noted “nothing is more common nowadays than for products imported into the United States to include components that the producers had bought from foreign manufacturers.” From this the Court concluded: “The position for which Motorola [and the U.S.] contends would if adopted enormously increase the global reach of the Sherman Act, creating friction with many foreign countries and ‘resent[ment at] the apparent effort of the United States to act as the world’s competition police officer,’ a primary concern motivating the foreign trade act.” The DOJ joined in the request for en banc review. Motorola Mobility involves the same LCD panel cartel that the Antitrust Division successfully prosecuted, sending many foreign defendants to prison.

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Connolly’s Cartel Capers: Plea Agreements in a Criminal Antitrust Trial

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The Proper Use of Plea Agreements in a Criminal Antitrust Trial

by Robert E. Connolly

Criminal antitrust trials occur relatively infrequently these days, so an occasional review of some of the issues that arise at trial can be useful as a refresher. Many government witnesses at a criminal antitrust trial are testifying pursuant to some type of agreement with the government. Such agreements include amnesty, immunity, non-prosecution/cooperation agreements and plea agreements. The essence of the agreement is that the witness will receive some type of benefit in the form of a reduced punishment (or immunity). In return, the witness agrees to cooperate with the government and testify at trial. If the witness does not give truthful testimony, he/she is theoretically subject to prosecution for perjury, and may also lose the benefits conferred by the agreement

A recent Second Circuit decision, U.S. v. Certified Environmental Services, Inc., No. 11-4872 (2d Cir. May 28, 2014), provides a chance to review the proper use of plea agreements at trial.   The court reversed convictions on several counts related to a scheme by defendants to violate various state and federal environmental regulations. The convictions were reversed based, in part, on the government having improperly bolstered the witness’s credibility by referring to the cooperation agreement requirement that the witness tell the truth.

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DLA Piper’s Robert Connolly pens MLEX article regarding “The DOJ Antitrust Division’s policy on independent compliance monitors: is it misguided?”

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Friend of the Firm, Robert Connolly, former Chief of the Philadelphia Field Office of the Antitrust Division of the US Department of Justice, now resident in DLA Piper’s Philadelphia Office last week penned an important contribution for MLEX regarding DOJ’s evolving policy regarding compliance monitors:  “The DOJ Antitrust Divsion’s policy on independent compliance monitors: is it misguided?”

 

Halliburton Pleads Guilty: New York Times (Interesting Tea Leaves)

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Important details about Halliburton Plea (raises very interesting questions for anyone who reads tea leaves).  Could this be sideways referral to Antitrust Division?:

Halliburton Pleads Guilty to Destroying Evidence After Gulf Spill

NORTHERN CALIFORNIA REAL ESTATE INVESTOR AGREES TO PLEAD GUILTY TO BID RIGGING AT PUBLIC FORECLOSURE AUCTIONS

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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.

Felony charges were filed today in the U.S. District Court for the  Northern District of California in San Francisco against Robert Williams of Atherton,  Calif. Williams is the 31st individual to plead guilty or agree to  plead guilty as a result of the department’s ongoing antitrust  investigations into bid rigging and fraud at public real estate foreclosure  auctions in Northern California.

According to court documents, Williams 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 Mateo County, Calif. Williams was also charged with conspiring to use the mail to  carry out schemes to fraudulently acquire title to selected properties sold at public  auctions, to make and receive payoffs and to divert to co-conspirators money  that would have otherwise gone to mortgage holders and others.

The  department said Williams conspired with others to rig bids and commit mail  fraud at public real estate foreclosure auctions in San Mateo County beginning  as early as October 2009 and continuing until about December 2010.

“Collusion at these foreclosure auctions enabled the conspirators to  present the illusion of competition, when they were actually thwarting the  competitive process and profiting at the expense of lenders and distressed homeowners,”  said Bill Baer, Assistant Attorney General in charge of the Department of  Justice’s Antitrust Division. “The division remains committed to holding  accountable those who illegally subvert competition at real estate foreclosure  auctions across the country.”

The department said that the primary purpose of the  conspiracies was to suppress and restrain competition and to conceal payoffs in  order to obtain selected real estate offered at San Mateo 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.

“The legitimacy of an open, public real estate  foreclosure auction is compromised when an individual or group conspires to  commit criminal activity which impacts genuine intentions of good citizens,”  said David J. Johnson, FBI Special Agent in Charge of the San Francisco Field  Office. “We are steadfast in our continued partnership with the Antitrust  Division in bringing those criminally responsible to justice.”

A violation of the Sherman Act carries a maximum penalty of  10 years in prison and a $1 million fine for individuals. The maximum fine for  the Sherman Act charge may be increased to twice the gain derived from the  crime or twice the loss suffered by the victims if either amount is greater  than $1 million. A count of conspiracy to commit mail fraud carries a maximum  sentence of 30 years in prison and a $1 million fine. The government can also  seek to forfeit the proceeds earned from participating in the conspiracy to  commit mail fraud.

The charges today are the latest filed by the department in  its ongoing investigation into bid rigging and fraud at public real estate  foreclosure auctions in San Francisco, San Mateo, Contra Costa and Alameda counties,  Calif. These investigations are being conducted by the Antitrust Division’s San  Francisco Office and the FBI’s San Francisco office. Anyone with information  concerning bid rigging or fraud related to public real estate foreclosure  auctions should contact the Antitrust Division’s San Francisco 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 were  brought in connection with the President’s Financial Fraud Enforcement Task  Force. The task force was established to wage an aggressive, coordinated and  proactive effort to investigate and prosecute financial crimes. With more than  20 federal agencies, 94 U.S. attorneys’ offices and state and local partners,  it’s the broadest coalition of law enforcement, investigatory and regulatory  agencies ever assembled to combat fraud. Since its formation, the task force  has made great strides in facilitating increased investigation and prosecution  of financial crimes; enhancing coordination and cooperation among federal,  state and local authorities; addressing discrimination in the lending and  financial markets and conducting outreach to the public, victims, financial  institutions and other organizations. Over the past three fiscal years, the  Justice Department has filed nearly 10,000 financial fraud cases against nearly  15,000 defendants including more than 2,900 mortgage fraud defendants.

County Commissioner Sentenced for Attempted Extortion and Bribery

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Al J. Hurley, a former county commissioner in Sumter County, Ga., was sentenced today to 36 months in prison stemming from his acceptance of illicit payments in exchange for his official efforts to secure government contracts for a private contractor, Acting Assistant Attorney General Mythili Raman of the Justice Department’s Criminal Division and Middle District of Georgia U.S. Attorney Michael J. Moore announced.

Hurley, 55, of Americus, Ga., was sentenced today by U.S. District Judge W. Louis Sands.  On Dec. 3, 2012, a federal jury sitting in the Albany Division of the Middle District of Georgia found Hurley guilty of one count each of attempted extortion and federal program bribery.

Hurley was first elected to the five-member Sumter County board of commissioners in 1999.  As the primary governing body for the county, the board presided over a variety of official matters, including the bidding process for and award of various county contracts.

Evidence at trial showed that from September to December 2011, Hurley, in his capacity as a county commissioner, solicited and agreed to accept cash payments – including $5,000 on Oct. 23, 2011, and $15,000 on Dec. 19, 2011 – from a private contractor, in exchange for Hurley’s repeated promises to use official action and influence to help facilitate the award of county contracting work to the contractor.

In particular, Hurley told the contractor that he would help him win a $100,000 depot renovation contract in a city within Hurley’s district.  Trial testimony also established that, in order to drive up the bribe amount, Hurley invented two inside contacts that he claimed to have at a new racetrack project in his district, and claimed the contacts could influence the award of related contracting work in favor of the contractor.  Hurley, who testified, admitted the contacts did not exist.

This case was investigated by the FBI. This case was prosecuted by Trial Attorney Eric G. Olshan of the Criminal Division’s Public Integrity Section and Assistant U.S. Attorney K. Alan Dasher of the Middle District of Georgia.