Tag Archives: White collar

Connolly’s Cartel Capers: Whatever Happened to…Mark Whitacre?

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by Robert Connolly

Mark Whitacre was the former Archer Daniels Midland (ADM) executive who blew the whistle on the international lysine price-fixing conspiracy of the early 1990’s. He is the highest ranking Fortune 500 executive to become an FBI whistleblower.  Whitacre’s actions launched the age of international price-fixing prosecutions that dominate cartel enforcement to this day. Mr. Whitacre has written an essay, “When Good Leaders Lose Their Way,” 45 Loy. U. Chi. L.J. 525 (2014), that recounts how he became involved in the conspiracy; why he decided to confess to the FBI; his two year saga as an FBI uncover operative across the globe; his decision to embezzle $9.5 million from ADM (his “self-help” severance pay); his resulting ten-year prison sentence; and how he landed on his feet today as the COO of a biotech company with his family intact.  Whitacre’s journey illustrates how a serious antitrust and ethics compliance program may have prevented a journey of  misery for him and his company.  

Whitacre got involved in the lysine cartel because of tunnel vision focus on short-term profit driven by the lure of stock options and other financial benefits and trappings of life at the top. His wife, who noticed the changes in Whitacre and his material focus, became the impetus for him to turn himself in to the FBI. For two years Whitacre reported to work as a loyal executive of ADM, all the while equipped with recording devices to “get the goods” on his superiors and co-workers. By his account, after two years of this double life he made some extraordinarily bad decisions to try secure his financial future.  He embezzled almost $10 million from ADM and was caught. He compounded this mistake by turning down what his lawyer called the “deal of a lifetime” and a possible 6 month sentence, which was supported by FBI agents with whom he had worked. He ended up serving 8 years and 8 months in federal prison. Upon his release, however, he has been able to resume a successful career as the CEO of a biotech company fueled by an entirely new set of principles. Whitacre has his own web page, Website of Mark Whitacre http://www.markwhitacre.com/career.html. This web site contains, among other things, interviews of FBI agents who handled Whitacre during his two years of undercover activity. To read more about the actual workings of the lysine cartel, see: “The Fly On The Wall Has Been Bugged– Catching An International Cartel In The Act,” speech by  Scott D. Hammond, Deputy Assistant Attorney General for Criminal Enforcement, Antitrust Division, May 15, 2001. http://www.justice.gov/atr/public/speeches/8280.pdf. Copies of the lysine tapes and transcripts are available at no charge by mailing or faxing (202/616-4529) your request to the United States Department of Justice, Antitrust Division, Freedom of Information Act Unit, Liberty Square Building, 450 Fifth Street, NW, Suite 3200, Washington, 20530
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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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Antitrust and White-Collar Defense Luminary, Robert E. Connolly, Joins GeyerGorey LLP

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Robert E. ConnollyGeyerGorey LLP announced today that Robert E. Connolly has joined the firm’s Washington, D.C. office as a partner.  Connolly spent most of his career as a prosecutor with the Middle Atlantic Field Office of the Antitrust Division, Department of Justice.   Connolly joined that office in 1980 and was Chief from 1994 until early 2013.  More recently, Robert E. Connolly has been with DLA Piper in Philadelphia.  Connolly will lead GeyerGorey’s corporate internal investigations practice.  Founding partner Brad Geyer said “Bob is a natural fit for our culture, which requires constant disciplined teamwork and focus on client solutions that spring from the firm’s’ deep prosecutorial experience”
Connolly said: “I am excited to join my former DOJ colleagues.  Collectively we have worked on many of the Division’s most significant criminal and civil matters.  We have unique insights and experience to offer clients. The firm’s unique approach and rapid growth further strengthens our ability to serve clients faced with government investigations.”
“We expect Bob will be involved in much of the firm’s current portfolio of work, in addition to leading the corporate internal investigation practice,” said founding partner Hays Gorey.  “Bob has a notable reputation for his representation in high-stakes matters. He will strengthen our ability to represent multinational clients in complex litigation, as well as in high-profile regulatory and enforcement agency investigations.”  Connolly will be also be part of GeyerGorey’s compliance team, which blends its experience in enforcement, in-house counseling, criminal and civil defense, and qui tam litigation, to help companies efficiently identify, address, and mitigate litigation risks from the onset and develop an organizational culture that encourages ethical conduct and a commitment to comply with the law.
In his career with the Division, Connolly led major national and international white-collar crime investigations in the areas of antitrust, fraud and obstruction of justice.  He is known for innovative investigative and trial strategy and a command presence in the courtroom.  He left the government with one of the, if not the most successful, trial records in Antitrust Division history. Connolly was known for his building and leading effective teams that had an extraordinary commitment to successfully completing the mission.
Notably, Connolly led the international graphite electrodes cartel grand jury investigation, which resulted in seven corporate and three individual convictions and approximately $437 million in fines, including what was then the largest post-trial criminal fine in Antitrust Division history.  The investigation was capped by charging, trying and convicting a foreign corporation of aiding and abetting the cartel.   Connolly, as lead trial attorney, along with GeyerGorey’s Wendy Norman, received the DOJ’s highest litigation honor, the John Marshall Award for Outstanding Legal Achievement for Trial Litigation.  More recently, Connolly’s office led the historic effort to extradite Ian Norris to the United States from Britain to stand trial on obstruction of justice charges, of which Norris was later convicted.
In addition to his prosecutorial experience, Connolly was the Victor Kramer Fellow at Yale University in 1989-1990. He has served as an adjunct professor of antitrust law at Rutgers-Camden Law School and later Drexel School of Law.   He currently serves on the Advisory Board for the ABA Cartel and Criminal Practice committee and since leaving the Antitrust Division in 2013, has authored more than a dozen articles on U.S. and international competition law practice.

The Hill: Lobbying World

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Click Here:  The Hill: Lobbying World (June 25, 2013)

GeyerGorey LLP’s Phillip C. Zane Named to 2013 Edition of Washington D.C. Super Lawyers

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Former LIBOR Prosecutor, Wendy Norman, Joins GeyerGorey LLP

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Wendy Norman, former US Department of Prosecutor, to join GeyerGorey LLP. Acquisition complements firm’s growing practice.

FOR IMMEDIATE RELEASE

(Press Release) – Feb. 4, 2013 – GeyerGorey LLP today announced that former LIBOR prosecutor Wendy Bostwick Norman will be joining the firm’s Philadelphia operations.
Wendy brings to the firm 20 years of federal prosecution experience which followed more than a decade as an investigative agent with the New Jersey State Commission of Investigation, said firm partner Bradford Geyer.
“I couldn’t be more thrilled to have Wendy joining our firm,” added Geyer, “I have worked closely with Wendy on and off for more than 20 years and I know exactly what she brings to the table: legal acumen, strategic smarts and gravitas.  She knows how to identify and exploit opportunity at the earliest juncture and I have no doubt she will be a superb supplement to our team.”
Geyer and Norman met in 1992, the year Norman joined the Department of Justice, after graduating from Villanova Law School.  Ironically, both Norman and Geyer recall attending a training seminar in the early 1990s where firm partners Hays Gorey and Robert Zastrow were instructors.
Gorey stressed Norman’s well known reputation as a talented and conscientious federal prosecutor who was a “team player.”  Her wealth of experience investigating and prosecuting antitrust and related complex criminal frauds, including violations of the Foreign Corrupt Practices Act, ideally suits her to assist the firm’s clients, according to Geyer.  “We are pleased she agreed to join the firm, despite offers to work in New York and Washington, D.C.”
Norman won numerous awards and accolades while at the Department of Justice.  Among them, was the 2010 Antitrust Division Assistant Attorney General Award of Distinction for her work on the team that earned the conviction for obstruction of justice of Ian P. Norris, the former CEO of The Morgan Crucible Company plc; the 2001 Attorney General’s John Marshall Award for Outstanding Legal Achievement for her trial victory in United States v. Mitsubishi Corporation; and, in 1999, an award from the Attorney General for Outstanding Dedication and Effectiveness in Enhancing Crime Victim Fund Collections.
According Zastrow, “Wendy’s qualities fit our firm to a “T.”  She has the exact low ego, steely resolve and collaborative qualities we seek in our attorneys.  We want maximum brain power plugged into an issue.”