Antitrust Criminal Defense Blog

NCAA Antitrust Trial Set to Begin June 9th

An attempt by the National Collegiate Athletic Association to delay and redefine the Ed O’Bannon antitrust suit has been denied by United States District Judge Claudia Wilken. The trial, which will begin as scheduled on June 9th, could last up to 15 days and a verdict is expected before the month concludes.

The plaintiffs are seeking to end the restrictions placed by the NCAA which currently blocks the ability of student athletes to receive compensation for their names and likenesses.  Chances of a settlement seem unlikely after Michael Hausfeld, lead attorney for the plaintiffs, reported that the sides still haven’t come close in pre-trial discussions. If the case goes to trial, the NCAA will be forced to provide facts that prove current restrictions do contribute to the integration of education and athletics as the organization has claimed.

Judge Wilken has also set another trial for next March on claims made by other athletes that the NCAA and videogame maker Electronic Arts have misappropriated athletes’ names and likenesses for NCAA-branded videogames.  This case had previously been combined with the O’Bannon case.

The plaintiffs are made up of twenty former athletes including basketball greats Bill Russell and Oscar Robertson.  The suit seeks an injunction that would allow athletes to sell their services to colleges in the form of pay or extra benefits that the NCAA doesn’t currently allow.  Earlier this month the plaintiffs dropped their demand for individual damages which has narrowed the scope of the trial.

Posted in AntiTrust Law |

Lear Corp Agrees to Price Fixing Class Action Settlement

Lear Corp disclosed in a filing with the United States Securities and Exchange Commission that it has agreed to an $8.75 million settlement to resolve allegations that it conspired with other auto parts makers to fix the prices of automotive wire harness systems.  Investigators believe the scheme ran from early 2002 through 2010.

The company will pay $4.75 million to the lawsuit’s “direct purchasers”, another $3 million to car buyer plaintiffs, and about $1 million to the auto dealerships that are part of the court case.  The agreement also calls for Lear to put up $370,263 cash and obtain the rest of assets held in reserve from the company’s Chapter 11 bankruptcy reorganization from 2009 for “disputed claims”.

Lear Corp, with $16.2 billion in 2013 revenue and 122 employees, did not admit to any wrongdoing in the filing.

Lear becomes the latest auto parts manufacturer to settle claims in the massive auto part antitrust multidistrict litigation.  In January, Nippon Seiki Co. Ltd. Agreed to a $4.56 million class action settlement resolving allegations that the company conspired in a price-fixing involving vehicle instrument panels.  In February Panasonic Corp., Hitachi Automotive Systems Ltd., Mitsuba Corp. and others were involved in separate class action lawsuits accusing the companies of conspiring to fix the prices of air flow meters.

The Auto Parts Price-Fixing MDL is In re: Automotive Parts Antitrust Litigation, Case No. 2:12-md-02311, in the U.S. District Court for the Eastern District of Michigan.

Posted in Price fixing |

Oil Firm Reaches $5 million Settlement for Bid Rigging

Attorney General Bill Schuette announced on Monday that Encana Oil has agreed to pay the State of Michigan $5 million to resolve misdemeanor charges of bid-rigging in public auctions for oil and gas leases.   Encana and Oklahoma-based Chesapeake Energy Corp. were accused of dividing state lands whose gas and oil rights were up for auction to avoid competing against each other. Schette has said the collusion with Chesapeake Energy is suspected of depressing the per-acre cost of leases from $1,510 in May 2010 to less than $40 in October of 2010.

Encana chose to enter a no-contest plea for one count of criminal antitrust violations and Michigan agreed to delay the misdemeanor charge by 11 months and dismiss another.  The delayed charge will also be dismissed if Encana upholds the conditions in the plea agreement.

The settlement with the state was signed in Ingham County Circuit Court and included a four-year “corporate integrity agreement” designed to provide “increased transparency of future oil and gas lease bidding activitiy.” Michigan’s Department of Natural Resources will receive $2.5 million from the settlement and the other $2.5 million will fund antitrust enforcement in the state.

This alleged conspiracy was uncovered by the Reuters News Agency and the investigation of this case was led by the Attorney General’s office.

The antitrust case against Chesapeake Energy is ongoing, with preliminary hearings underway this week in Cheboygan District Court.

Posted in Bid Rigging |

K-Cup Maker Accused of Violating Antitrust Laws

Keurig Green Mountain’s plan to introduce a new single-serve brewer that would lock out competitors has triggered 14 lawsuits to be filed in the last two months which accuse the company of violating both federal and state anti-competitive and antitrust laws.  The Keurig 2.0, which is set to be released later this year, would only accept K-Cup portion packs manufactured by Keurig and has received a large amount of negative feedback.

Lisa Smits of Fredericksburg, Va., one of the many to complain, said of the Keurig 2.0, “This is like selling a toaster and in small print saying, ‘requires using our exclusive patented Wonder Bread.’ ”

The 14 lawsuits break down to 12 class action complaints brought by individuals in California, Florida, New York, Massachusetts, and New Jersey.  The other two lawsuits were filed by Rogers Family Co. and Treehouse Foods which make their portion cups for brewers that use Keurig’s K-Cup portion packs.  Both companies have previously won lawsuits filed against them by Keurig when they introduced their portion cups, which the new Keurig 2.0 would reject.

“If the Keurig 2.0 is even legal it’s certainly not friendly to the consumer,” said Jim Rogers, vice president of Rogers Family. TreeHouse Foods Chairman, President and CEO Sam Reed said in a statement that the lawsuit is “fundamentally about consumer choice versus monopoly power.”

Keurig Green Mountain spokeswoman Suzanne DuLong believes that the lawsuits are without merit and says that the company will defend itself vigorously.

Posted in AntiTrust Law |

Bridgestone Executives Indicted on Price Fixing and Bid Rigging Charges

A federal grand jury returned an indictment on Tuesday April 18th that charged one current executive and two former officials of Bridgestone Corporation with conspiring to fix the prices of automotive anti-vibration rubber parts sold in the United States and elsewhere.

Yoshiyuki Tanaka, Yasuo Ryuto and Isao Yoshida were indicted in United States District Court in Toledo for allegedly fixing the prices of parts sold to Toyota Motor Corp, Nissan Motor Corp, Suzuki Motor Corp and Fuji Heavy Industries, Ltd.  Bridgestone itself agreed to plead guilty to price-fixing on February 13th and paid a $425 million fine.

Ryuto worked for Bridgestone from 1991 to 2008 and is no longer employed by the company.  Yoshida worked for Bridgestone from 1997 to 2008 and is no longer employed with the company.  Tanaka was hired in 1991 and is still currently working for Bridgestone Corporation as manager of the anti-vibration rubber original equipment international planning section

If the men are convicted, they could each be sentenced to 10 years in federal prison.

In total, 32 people have been charged in the government’s ongoing investigation into price fixing and bid rigging in the auto parts industry.  Including Bridgestone, 26 companies have pleaded guilty or agreed to plead guilty and have agreed to pay more than $2.29 billion in fines.

The case is at the U.S. District Court for the Northern District of Ohio, and is the United States of America v. Yasuo Ryuto, Yoshiyuki Tanaka and Isao Yoshida. It is case No. 14-138.

Posted in Bid Rigging, Price fixing |

Two Officials Sentenced in Tomato Price Fixing Scandal

Two original defendants involved in a large scale tomato price-fixing scandal were sentenced on Tuesday in Sacramento federal court.  Randall Rahal, a former SK Foods broker, received a three year prison sentence for bribing buyers at food giants such as Kraft Foods, Safeway Inc., and Frito-Lay.  Alan Huey, the former senior vice president of SK foods, was sentenced to three years of probation with a special condition of 60-days intermittent confinement for directing others to falsely label food products.

Court records said that Rahal, 65, paid bribes and kickbacks on behalf of SK Foods to the purchasing officers of the corporate customers of SK Foods.  He was the subject of wiretaps in 2007 and 2008.

Huey, 57, admitted to directing people to buy falsely labeled tomato products.

The owner of SK Foods, Frederick Scott Salyer, was sentenced last year to six years in prison for a lengthy price fixing scheme that investigators said increased the price of food and allowed moldy products to reach United States customers.  The charges against Salyrer carried a maximum sentence of 20 and 10 years, respectively, but the terms were reduced as part of a plea agreement.  He also was sentenced to three years of probation.

These cases were investigated by the Federal Bureau of Investigation, IRS-Criminal Investigation, FDA Office of Criminal Investigations, and the Antitrust Division of the United States Department of Justice.

Posted in Price fixing |

Justice Department Extradites Italian National on Antitrust charges

The United States has extradited Romano Pisciotti from Germany to face price-fixing charges in what the Justice Department is calling its first successful extradition for antitrust violations. Pisciotti arrived in Miami on April 3rd and is scheduled to make his initial appearance today in the United States District Court of the Southern District of Florida.

The one count felony indictment accuses Piscotti, a former executive with Italy’s Parker ITR SRL, of rigging bids and allocating the market share in the marine hose industry.  The Department of Justice’s Antitrust Division believes Piscotti participated in the conspiracy from as early as 1999 until at least November 2006.

Pisciotti is charged with violating the Sherman Act, which carries a maximum penalty of 10 years in prison and a $1 million criminal fine for individuals.  The maximum fine can be increased to twice the gain derived from the crime or twice the loss suffered by the victims, if either of those amounts is determined greater than the statutory maximum fine.

In total, five companies and nine individuals have been pleaded guilty as a result of the department’s ongoing marine hose investigation.  The guilty companies include:

-Parker ITR

-Bridgestone Corp. of Japan

-Manuli SPa of Italy’s Florida subsidiary

-Trelleborg of France

-Dunlop Marine and Oil Ltd, of the United Kingdom

The investigation of this case was conducted by the Antitrust Division’s Washington Criminal I Section, the Defense Criminal Investigative Service of the Department of Defense’s Office of Inspector General, the United States Navy Criminal Investigative Service, and the Federal Bureau of Investigation



Posted in AntiTrust Law |

Alabama Customers to Receive Credits from E-Book Settlement

Attorney General Luther Strange has announced that Alabama consumers will receive $1.956 million as part of a national antitrust settlement regarding the price-fixing of electronic books by five of the nation’s top book publishers.  “I am pleased that we have been able to recover nearly $2 million due to Alabamians, and that the entirety of this settlement is being used to compensate consumers for their damages,” Strange said in a release.

State attorneys general from 33 jurisdictions claim Hachette, HarperCollns, Macmillan, Penguin and Simon & Schuster conspired with Apple Inc. to raise and fix prices on e-book purchases.  The publishers maintain that no wrongdoing took place, but agreed to the settlement in order to avoid trial costs.

Individual payments will be electronically transmitted this week back to the accounts through which consumers made the purchases.  In cases where this is undetermined, paper checks will be mailed.

The refunds will be determined by the amount of eligible e-book purchases between April 1, 2010 and May 21, 2012.  Eligible customers will be noticed via email by their E-book retailer or from the lawsuit Settlement Administrator.

In addition to Alabama, others joining the settlement include: Alaska, Arizona, Arkansas, Colorado, Connecticut, Washington, D.C., Delaware, Idaho, Illinois, Indiana, Iowa, Kansas, Louisiana, Maryland, Massachusetts, Michigan, Missouri, Nebraska, New Mexico, New York, North Dakota, Ohio, Pennsylvania, Puerto Rico, South Dakota, Tennessee, Texas, Utah, Vermont, Virginia, West Virginia and Wisconsin.

More information is available on the settlement website,

Posted in AntiTrust Law |

Brokerage Founder Sentenced for Bid Rigging

David Rubin, the founder of CDR Financial Products Inc., was spared prison for his role in a municipal bond bid-rigging scheme that involved employees from some of the world’s biggest financial institutions. United States District Judge Kimba Wood sentenced Rubin to two years’ probation and 500 hours of community service on March 12th.  He must also pay $3.5 million in fines and $2.1 million in restitution.

Rubin was central in a wide-ranging probe of the $3.7 trillion United States municipal bond market.  He pleaded guilty in December 2011 to wire fraud and conspiracy charges stemming from a scheme involving more than 200 investment contracts.  Prosecutors say this scheme lasted from 1998 through 2006.

Rubin, 52, began cooperating with the government after his plea deal and testified at the 2012 trial of Peter Ghavami, and two other UBS AG bankers.  Gary Heinz and Michael Welty were found guilty at a trial and sentenced to prison terms ranging from 16 to 27 months.

UBS become one of five large financial institutions that agreed to pay about $743 million in restitution, disgorgement, and penalties as a result of the probe.  The other companies were Bank of America Corp, JPMorgan Chase & Co, General Electric Co, and Wells Fargo & Co.

Seventeen individuals have been convicted as part of the investigation, including seven employees from CDR.  Zevi Wolmark, CDR’s former financial officer, received the longest prison term of three to 18 months.

Posted in Bid Rigging |

Charlotte Based Shipping Company Settles in Price Fixing Case

Horizon Lines LLC has agreed to pay a $1.5 million settlement relating to price fixing charges that came out of a 2008 federal investigation which accused the company of fixing prices on routes between the United States and Puerto Rico.  The settlement announced on March 7th resolves complaints from the United States departments of agriculture, defense, and the postal service.

According to the complaint, collusion between Horizon and Sea Star line caused the government to be overcharged for shipping mail, food, and other products.  Sea Star Line LLC agreed to pay nearly $1.9 million in penalties for their involvement in the scheme.

The lawsuit’s allegations claim that former executives of Sea Star and Horizon would engage in secret email exchanges on personal accounts to trade confidential bidding information.  The Department of Justice alleges that the companies were able to gain an unfair advantage in establishing transportation routes which led to inflated prices from 2002 to 2008.

A former Sea Star executive, William Stallings, first brought the suit as a whistle-blower and will now receive more than $512,719 from the settlement.

Horizon has been reporting improved financial results since 2011.  In its most recent report, Horizon said it had recorded a $17.7 million loss for the first nine months of the fiscal year.  This compares favorably to a $76.7 million loss for the same period in the previous year.

Posted in Price fixing |