JAPANESE COMPANY AGREES TO PAY $17.7 MILLION CRIMINAL FINE

Photo Credit:  Wikipedia.
FROM: U.S. DEPARTMENT OF JUSTICE

Tuesday, October 30, 2012
Japanese Automobile Parts Manufacturer Agrees to Plead Guilty to Price Fixing and Obstruction of Justice ASHINGTON — 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.

COMPANY PLEADS GUILTY TO PRICE FIXING; WILL PAY $17 MILLION CRIMINAL FINE

FROM: U.S. DEPARTMENT OF JUSTICE ANTITRUST DIVISION
Wednesday, August 1, 2012
Florida-Based Crowley Liner Services Inc. Pleads Guilty to Price Fixing on Freight Services Between U.S. and Puerto Rico

Company Sentenced to Pay $17 Million Criminal Fine

WASHINGTON – Jacksonville, Fla.-based Crowley Liner Services Inc. pleaded guilty and was sentenced to pay a $17 million criminal fine for its role in a conspiracy to fix prices in the coastal water freight transportation industry, the Department of Justice announced today.

According to a one-count felony charge filed yesterday in the U.S. District Court for the District of Puerto Rico, Crowley Liner Services engaged in a conspiracy to fix base rates for water transportation of certain freight between the continental United States and Puerto Rico from as early as January 2006 until at least April 2008.

Crowley Liner Services transports a variety of cargo shipments, such as heavy equipment, cargo that would not fit into containers, used cars and liquids capable of being transported only in tanker containers, on scheduled ocean voyages between the United States and Puerto Rico.

According to the charges, Crowley Liner Services and co-conspirators carried out the conspiracy by agreeing during meetings and discussions to fix the base rates to be charged to non-government purchasers of water transportation of certain freight between the continental United States and Puerto Rico. The department said that Crowley Liner Services and co-conspirators also engaged in meetings for the purpose of monitoring and enforcing adherence to the agreed-upon rates and sold Puerto Rico freight services at collusive and noncompetitive rates.

"Including this sentencing, as a result of the Antitrust Division’s ongoing investigation, three freight companies have been sentenced to pay criminal fines totaling more than $45 million and five executives have been sentenced to serve prison time totaling more than 11 years," said Scott D. Hammond, Deputy Assistant Attorney General of the Antitrust Division’s Criminal Enforcement Program. "By agreeing to fix prices for coastal shipping services to and from Puerto Rico, Crowley Liner Services and its co-conspirators thwarted the competitive process by forcing consumers to pay inflated rates for these services."


On Dec. 20, 2011, Sea Star Line LLC was sentenced to pay a $14.2 million criminal fine. On March 22, 2011, Horizon Lines LLC was sentenced to pay a $15 million criminal fine. Additionally, five shipping company executives—Gabriel Serra, Peter Baci, R. Kevin Gill, Gregory Glova and Alex G. Chisholm—have pleaded guilty. Frank Peake, the former president of Sea Star Line, was charged on Nov. 17, 2011, and is scheduled to stand trial on Jan. 14, 2013.

Crowley Liner Services pleaded guilty to price fixing in violation of the Sherman Act, which carries a maximum fine of $100 million 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.

This case arose from an ongoing federal antitrust investigation into price fixing, bid rigging and other anticompetitive conduct in the coastal water freight transportation industry, which is being conducted by the Antitrust Division’s National Criminal Enforcement Section; the Baltimore Resident Agency of the Department of Defense’s Office of the Inspector General, Defense Criminal Investigative Service (DCIS); and the Miami Field Office of the Department of Transportation’s Office of Inspector General (DOT-OIG).

FUJIKURA LTD. WILL PAY $20 MILLION CRIMINAL FINE FOR ROLE IN PRICE FIXING AUTO PARTS IN U.S. CARS

FROM:  DEPARTMENT OF JUSTICE
Monday, April 23, 2012
Fujikura Ltd. Agrees to Plead Guilty to Price Fixing on Auto Parts Installed in U.S. Cars Company Agrees to Pay $20 Million Criminal Fine
WASHINGTON – Tokyo-based Fujikura Ltd. has agreed to plead guilty and to pay a $20 million criminal fine for its role in a conspiracy to fix prices of automotive wire harnesses and related products installed in U.S. cars, the Department of Justice announced today.

According to a one-count felony charge filed today in the U.S. District Court for the Eastern District of Michigan in Detroit, Fujikura engaged in a conspiracy to rig bids for and to fix, stabilize and maintain the prices of automotive wire harnesses and related products sold to an automaker in the United States and elsewhere. According to the charge, Fujikura’s involvement in the conspiracy lasted from at least as early as January 2006 until at least February 2010. According to the plea agreement, which is subject to court approval, Fujikura has agreed to pay a criminal fine and to cooperate with the department’s ongoing investigation.

“The Antitrust Division will remain vigilant in its efforts to detect and prosecute anticompetitive conduct in this important industry, which affects virtually every American consumer,” said Acting Assistant Attorney General Sharis A. Pozen in charge of the Department of Justice’s Antitrust Division.  “The division has focused its enforcement efforts in industries essential to consumers’ everyday lives, and we, along with our law enforcement partners, have been successful in bringing to justice companies and executives engaged in illegal price fixing conspiracies.”

To date, including Fujikura, eight executives and five companies have been charged and have agreed to plead guilty in the department’s ongoing antitrust investigation into the auto parts industry. Three of the companies have pleaded guilty and have been sentenced to pay criminal fines totaling more than $748 million. Seven of the executives have pleaded guilty and have been sentenced to serve a total of more than 122 months in jail.

Fujikura manufactures and sells automotive wire harnesses, which are automotive electrical distribution systems used to direct and control electronic components, wiring and circuit boards in cars.

According to the charge, Fujikura and its co-conspirators carried out the conspiracy by agreeing, during meetings and conversations in Japan, to allocate the supply of automotive wire harnesses and related products on a model-by-model basis and sold the parts at non-competitive prices to an automaker in the United States and elsewhere.

Fujikura is charged with price fixing in violation of the Sherman Act, which carries a maximum fine of $100 million 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.

JAPANESE AUTO PARTS COMPANY PLEADS GUILTY TO PRICE FIXING

FROM:  U.S. DEPARTMENT OF JUSTICE
G.S. Electech Agrees to Plead Guilty to Price Fixing on Auto Parts Installed in U.S. Cars Company Also Agrees to Pay $2.75 Million Criminal Fine
WASHINGTON – Toyota City, Japan-based G.S. Electech Inc. has agreed to plead guilty and to pay a $2.75 million criminal fine for its role in a conspiracy to fix the prices of auto parts used on antilock brake systems installed in U.S. cars, the Department of Justice announced today.

According to a one-count felony charge filed today in the U.S. District Court for the Eastern District of Michigan, in Detroit, G.S. Electech engaged in a conspiracy to rig bids and to fix the prices of speed sensor wire assemblies, which are installed on automobiles with an antilock brake system (ABS) and were sold to an automaker in the United States and elsewhere. According to the charge, G.S. Electech’s involvement in the conspiracy lasted from at least as early as January 2003 until at least February 2010.  According to the plea agreement, which is subject to court approval, G.S. Electech has agreed to pay a criminal fine and to cooperate with the department’s ongoing investigation.

"The Antitrust Division continues to uncover and prosecute illegal conduct in its ongoing and active investigation into price fixing and bid rigging in the auto parts industry,” said Acting Assistant Attorney General Sharis A. Pozen in charge of the Department of Justice’s Antitrust Division.  “Today’s announcement demonstrates that the Antitrust Division, working with its law enforcement partners, will continue to pursue those who engage in anticompetitive behavior that harms American businesses and consumers.

Including G.S. Electech, eight executives and four companies have been charged and have agreed to plead guilty in the investigation thus far. Three of the companies have pleaded guilty and have been sentenced to pay criminal fines totaling more than $748 million. Seven of the executives have pleaded guilty and have been sentenced to serve a total of more than 122 months in jail.

G.S. Electech manufactures, assembles and sells a variety of automotive electrical parts, including speed sensor wire assemblies. The speed sensor wire assemblies connect a sensor on each tire to the ABS and carry electrical signals from the sensors to the ABS to instruct it when to engage.

According to the charge, G.S. Electech and its co-conspirators carried out the conspiracy by, among other things, agreeing during meetings and discussions in Japan to coordinate bids submitted to, and price adjustments requested by, an automobile manufacturer.  In court documents, G.S. Electech and its co-conspirators employed measures to keep their conduct secret, including using code names and instructing participants to destroy evidence of collusion.

G.S. Electech is charged with price fixing in violation of the Sherman Act, which carries a maximum fine of $100 million 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.

DENSO CORPORATION EXECUTIVE AGREES TO PLEAD GUILTY TO PRICE FIXING AND BID RIGGING

The following excerpt is from the Department of Justice Antitrust website:
WASHINGTON — An executive of Japan-based DENSO Corporation, has agreed to plead guilty and to serve time in prison for his role in a conspiracy to fix prices and rig bids for heater control panels (HCPs) installed in U.S. cars, the Department of Justice announced today.

According to a one-count felony charge filed today in the U.S. District Court for the Eastern District of Michigan in Detroit, Norihiro Imai, a Japanese national, along with co-conspirators, engaged in a conspiracy to rig bids for and to fix, stabilize and maintain the prices of HCPs sold to customers in the United States and elsewhere. According to the charge, Imai’s involvement in the conspiracy lasted from at least as early as August 2006 until at least June 2009. According to the plea agreement, which is subject to court approval, Imai has agreed to serve one year and one day in a U.S. prison, to pay a $20,000 criminal fine and to cooperate with the department’s ongoing investigation.

“Today’s guilty plea demonstrates the Antitrust Division’s commitment to hold executives accountable for engaging in illegal conduct that leads to higher prices for American businesses and consumers,” said Acting Assistant Attorney General Sharis A. Pozen in charge of the Department of Justice’s Antitrust Division. “Criminal antitrust enforcement is a top priority, and the division will continue to work with its law enforcement partners in the ongoing investigation in the auto parts industry.”

DENSO manufactures and sells a variety of automotive electrical parts, including HCPs. HCPs are located in the center console of an automobile and control the temperature of the interior environment of a vehicle. According to the charge, Imai and his co-conspirators carried out the conspiracy by, among other things, agreeing during meetings and discussions to coordinate bids submitted to, and price adjustments requested by, automobile manufacturers.

Including Imai, eight individuals and three companies have been charged in the government’s ongoing investigation into price fixing and bid rigging in the auto parts industry. DENSO pleaded guilty on March 5, 2012, and was sentenced to pay a $78 million criminal fine. Yazaki Corporation, another Japanese automotive electrical component supplier, pleaded guilty on March 1, 2012, and was sentenced to pay a $470 million criminal fine. Additionally, four Yazaki executives were charged on Jan. 30, 2012, and have agreed to plead guilty. On Nov. 14, 2011, Furukawa Electric Co. Ltd. pleaded guilty and was sentenced to pay a $200 million fine. Three of Furukawa’s executives also pleaded guilty and were sentenced to serve prison sentences in the United States ranging from a year and a day to 18 months.

Imai is charged with price fixing in violation of the Sherman Act, which carries a maximum sentence 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.

DENSO CORPORATION EXECUTIVE AGREES TO PRISON TIME

The following excerpt is from the Department of Justice website:
Monday, March 26, 2012
DENSO Corporation Executive Agrees to Plead Guilty to Price Fixing and Bid Rigging on Auto Parts Installed in U.S. Cars Executive Also Agrees to Serve Significant Prison Time
WASHINGTON – An executive of Japan-based DENSO Corporation, has agreed to plead guilty and to serve time in prison for his role in a conspiracy to fix prices and rig bids for heater control panels (HCPs) installed in U.S. cars, the Department of Justice announced today.

According to a one-count felony charge filed today in the U.S. District Court for the Eastern District of Michigan in Detroit, Norihiro Imai, a Japanese national, along with co-conspirators, engaged in a conspiracy to rig bids for and to fix, stabilize and maintain the prices of HCPs sold to customers in the United States and elsewhere. According to the charge, Imai’s involvement in the conspiracy lasted from at least as early as August 2006 until at least June 2009. According to the plea agreement, which is subject to court approval, Imai has agreed to serve one year and one day in a U.S. prison, to pay a $20,000 criminal fine and to cooperate with the department’s ongoing investigation.

“Today’s guilty plea demonstrates the Antitrust Division’s commitment to hold executives accountable for engaging in illegal conduct that leads to higher prices for American businesses and consumers,” said Acting Assistant Attorney General Sharis A. Pozen in charge of the Department of Justice’s Antitrust Division. “Criminal antitrust enforcement is a top priority, and the division will continue to work with its law enforcement partners in the ongoing investigation in the auto parts industry.”

DENSO manufactures and sells a variety of automotive electrical parts, including HCPs. HCPs are located in the center console of an automobile and control the temperature of the interior environment of a vehicle. According to the charge, Imai and his co-conspirators carried out the conspiracy by, among other things, agreeing during meetings and discussions to coordinate bids submitted to, and price adjustments requested by, automobile manufacturers.

Including Imai, eight individuals and three companies have been charged in the government’s ongoing investigation into price fixing and bid rigging in the auto parts industry. DENSO pleaded guilty on March 5, 2012, and was sentenced to pay a $78 million criminal fine. Yazaki Corporation, another Japanese automotive electrical component supplier, pleaded guilty on March 1, 2012, and was sentenced to pay a $470 million criminal fine.  Additionally, four Yazaki executives were charged on Jan. 30, 2012, and have agreed to plead guilty. On Nov. 14, 2011, Furukawa Electric Co. Ltd. pleaded guilty and was sentenced to pay a $200 million fine. Three of Furukawa’s executives also pleaded guilty and were sentenced to serve prison sentences in the United States ranging from a year and a day to 18 months.

Imai is charged with price fixing in violation of the Sherman Act, which carries a maximum sentence 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.

The current prosecution arose from an ongoing federal antitrust investigation into price fixing, bid rigging and other anticompetitive conduct in the automotive parts industry, which is being conducted by 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.

FORMER OWNER AND CEO SCOTT SALYER OF SK FOODS PLEADS GUILTY TO RACKETEERING AND PRICE FIXING IN CALIFORNIA

The following excerpt is from the Department of Justice Antitrust website: 
SACRAMENTO, Calif. — Frederick Scott Salyer, 56, of Pebble Beach, Calif., pleaded guilty today to racketeering and price fixing, U.S. Attorney Benjamin B. Wagner announced. Salyer entered his plea before U.S. District Judge Lawrence K. Karlton.

Between 1990 and 2009, Salyer was the CEO and owner of SK Foods LP, a grower, processor and international seller of tomato paste and other processed agricultural products with facilities in Monterey, Lemoore, Williams and Ripon, Calif. In his plea, Salyer admitted that he operated SK Foods as a racketeering organization. According to the plea agreement, from January 2004 to April 2008, Salyer encouraged food broker Randall Rahal to pay bribes and kickbacks to purchasing officers employed by SK Foods’s customers Kraft Foods, Frito-Lay and B&G Foods. The intent was to induce Kraft’s Robert Watson, Frito-Lay’s Richard Wahl and B&G’s Robert Turner to promote the interests of SK Foods over their employers’ interests. Salyer also admitted that at his direction, SK Foods routinely falsified the lab test results for its tomato paste. Salyer ordered former employees Alan Huey and Jennifer Dahlman to falsify tomato paste grading factors, and SK Foods lied about its product’s percentage of natural tomato soluble solids, mold count, production date and whether the tomato paste qualified as “organic.” Finally, Salyer admitted that he had discussed an illegal target price agreement with other sellers of tomato paste and, when another co-conspirator offered a lower price, Salyer got the co-conspirator to agree to withdraw that offer to a customer.

U.S. Attorney Benjamin B. Wagner said: “Food grown in California’s Central Valley feeds people all over the United States; agriculture and food processing are critical to this region’s economy. This case of corporate corruption was met with the government’s full arsenal of law enforcement tools, which included grand jury process, an informant operation, wiretaps, search warrants, computer forensics and arrests. This office and its partners will continue to use these tools to attack fraud and corruption wherever it is detected in this district.”

“The Antitrust Division has made antitrust enforcement in the agriculture sector a priority,” said Acting Assistant Attorney General Sharis A. Pozen in charge of the Department of Justice’s Antitrust Division. “The division is committed to continuing to work with its law enforcement partners to crack down on illegal price fixing conspiracies that affect products used by consumers in their everyday lives.”

“Corruption in any form is despicable, but when such occurs within the food industry, it erodes public trust in products and threatens the industry as a whole,” said Herbert M. Brown, Special Agent in Charge of the FBI’s Sacramento Field Office. “The FBI continues to tirelessly combat white collar crime that is motivated by unscrupulous greed.”

“Today’s guilty plea is the result of a combined law enforcement effort against a corrupt organization motivated by greed and profit,” said Internal Revenue Service-Criminal Investigation (IRS-CI) Assistant Special Agent in Charge Rick Goss. “These crimes touched the lives of many unsuspecting citizens and the public should know that we will hold accountable those individuals who put personal financial gain above the safety and well-being of the general public.”

“The Food and Drug Administration-Office of Criminal Investigations is fully committed to investigating and supporting the prosecution of those who defraud consumers by manufacturing and selling adulterated foods to an unsuspecting public for economic gain. We continue to look forward to working with our law enforcement partners and commend the U.S. Attorney’s Office for their diligence,” said Thomas Emerick, Special Agent in Charge, Food and Drug Administration (FDA)-Office of Criminal Investigations, Los Angeles Field Office.

Salyer’s plea caps an investigative effort that began in August 2006, when federal agents executed a search warrant at the home of Anthony Manuel, an SK Foods employee who had embezzled approximately $1 million from his former employer, a competitor of SK Foods. Manuel promptly confessed to the embezzlement and later told agents about the crimes to which Salyer and others have now pleaded guilty. In 2007 and 2008, Manuel recorded conversations with SK Foods executives, including Salyer, and provided documents corroborating his account of the crimes being committed at SK Foods.  Wiretaps of Rahal telephones revealed that Rahal was discussing bribery and food mislabeling with Salyer and other senior officers of SK Foods. The wiretap also confirmed that Rahal was bribing Watson, Wahl, Turner and Safeway Inc. employee Michael Chavez. On April 18, 2008, agents of the FBI, IRS-CI and FDA Office of Criminal Investigations executed search warrants at the offices of SK Foods and at Salyer’s residence in Pebble Beach, seizing documents and copying SK Foods’s computer servers.

In 2009, the bribe recipients and many of Salyer’s subordinates at SK Foods pleaded guilty before Judge Karlton. Also that year, creditors forced SK Foods into bankruptcy. According to court documents, in late 2009, Salyer moved more than $3 million to Andorra and made a $50,000 deposit on a condominium there. Andorra is a small principality in the Pyrenees Mountains between France and Spain and has no extradition treaty with the United States. When agents learned of Salyer’s plans, they obtained an arrest warrant for him, which was executed on Feb. 4, 2010, when Salyer made what was to have been a short visit back to the United States. Salyer was jailed as a flight risk until Sept. 3, 2010, when he was released to house arrest after posting a $6 million bond.

Salyer was indicted by a federal grand jury on Feb. 18, 2010, with a superseding indictment brought against him on April 29, 2010. According to court documents, several issues have been litigated, such as whether the evidence against Salyer had been obtained lawfully. Judge Karlton ultimately rejected Salyer’s efforts to suppress the evidence gathered by Manuel. Judge Karlton also upheld the wiretap and search warrant applications.

Salyer is scheduled to be sentenced by Judge Karlton on July 10, 2012, at 9:15 a.m EDT. The maximum statutory penalty for a Racketeer Influenced and Corrupt Organizations (RICO) violation is 20 years in prison and a $250,000 fine. The maximum statutory penalty for price fixing is 10 years in prison and a $1 million fine. The actual sentence, however, will be determined at the discretion of the court after consideration of any applicable statutory factors and the Federal Sentencing Guidelines, which take into account a number of variables. In the plea agreement, Salyer may argue for a sentence as low as four years and the government may argue for a sentence up to seven years. Salyer also agrees to forfeit to the United States all of his interest in the $3 million that he transferred to Andorra.

This is the 11th guilty plea in an extensive investigation by the FBI, IRS-CI, FDA Office of Criminal Investigations and the Antitrust Division of the U.S. Department of Justice. The case is currently being prosecuted by Assistant U.S. Attorneys Matthew D. Segal, R. Steven Lapham and Jared C. Dolan, and Antitrust Division Trial Attorneys Anna T. Pletcher and Tai Milder.

LCD MAKER AND FORMER TOP EXECUTIVES FOUND GUILTY IN $500 MILLION PRICE FIXING SCHEME

The following excerpt is from the Department of Justice website:
TAIWAN-BASED AU OPTRONICS CORPORATION, ITS HOUSTON-BASED
SUBSIDIARY AND FORMER TOP EXECUTIVES CONVICTED FOR ROLE IN
LCD PRICE-FIXING CONSPIRACY
Jury Holds Companies Responsible for at Least $500 Million in Illicit Gains
WASHINGTON — Following an eight-week trial, a federal jury in San Francisco today convicted the largest Taiwan liquid crystal display (LCD) producer, its Houston-based subsidiary and their two former top executives for their participation in a five-year conspiracy to fix the prices of thin-film transistor-liquid crystal display (TFT-LCD) panels sold worldwide, the Department of Justice announced. The jury also found that the ill-gotten gain to the conspirators as a result of the fixed sales in the United States was at least $500 million.

AU Optronics Corporation and its American subsidiary, AU Optronics Corporation America, were found guilty today in the U.S. District Court in San Francisco. The trial began on Jan. 9, 2012. AU Optronics Corporation is based in Hsinchu, Taiwan. AU Optronics Corporation America is headquartered in Houston. The companies and individuals were indicted on June 9, 2010. The indictment charged that AU Optronics Corporation participated in the worldwide price-fixing conspiracy from Sept. 14, 2001, to Dec. 1, 2006, and that its subsidiary participated at various times during the conspiracy.

Former AU Optronics Corporation president Hsuan Bin Chen and former AU Optronics Corporation executive vice president Hui Hsiung were also found guilty. The department said that both executives participated in the conspiracy from Oct. 19, 2001, to Dec.1, 2006.

In addition to today’s convictions, seven companies have pleaded guilty to date to charges arising out of the department’s ongoing investigation and have been sentenced to pay criminal fines totaling more than $890 million. In addition to the individuals convicted today, 17 executives have been charged. Ten of the executives have pleaded guilty and have been sentenced to serve a combined total of 2,681 days in prison.

“The jury finding $500 million in ill-gotten gains by members of the cartel demonstrates the harmful effect of this price-fixing conspiracy on American businesses and consumers,” said Acting Assistant Attorney General Sharis A. Pozen in charge of the Department of Justice’s Antitrust Division. “The jury’s decision to hold not only the companies but also their top executives accountable for their anticompetitive actions should send a strong deterrent message to board rooms around the world.”

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

At trial, the department said that the convicted companies and former executives fixed the prices of LCD panels sold into the United States. The prices were fixed during monthly meetings with their competitors secretly held in hotel conference rooms, karaoke bars and tea rooms around Taiwan. The indictment alleged that the conspiracy lasted for more than five years before it was detected.

Also today, the jury found two AU Optronics Corporation employees not guilty--Lai-Juh Chen, former director of the Desktop Display Business Group, and Tsannrong Lee, former senior manager of the Notebooks Business Group. A mistrial was declared against Hsiu Lung Leung, former AU Optronics Corporation senior manager of Desktop Display Business Group.

The maximum penalty for a Sherman Act violation for an individual is 10 years in prison and a $1 million fine. Since the jury found that the gain derived from the conspiracy was at least $500 million, the maximum fine for the corporations is $1 billion.

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.