UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF TEXAS
UNITED STATES OF AMERICA,
Criminal No. H-08-795
The United States of America and Misao Hioki ("defendant") hereby enter into the
following Plea Agreement pursuant to Rule 11(c)(1)(B) of the Federal Rules of Criminal
Procedure ("Fed. R. Crim. P."):
RIGHTS OF DEFENDANT
1. The defendant understands his rights:
AGREEMENT TO PLEAD GUILTY
- to be represented by an attorney;
- to be charged by Indictment;
- as a citizen and resident of Japan, to contest the jurisdiction of the United
States to prosecute this case against him in the United States District Court for the Southern
District of Texas;
- to plead not guilty to any criminal charge brought against him;
- to have a trial by jury, at which he would be presumed not guilty of the charge and the United States would have to prove every essential element of
the charged offenses beyond a reasonable doubt for him to be found guilty;
- to confront and cross-examine witnesses against him and to subpoena witnesses in his defense at trial;
- not to be compelled to incriminate himself;
- to appeal his conviction, if he is found guilty; and
- to appeal the imposition of sentence against him.
AND WAIVE CERTAIN RIGHTS
2. The defendant knowingly and voluntarily waives the rights set out in Paragraph 1(b)-(h) above, including all jurisdictional defenses to the prosecution of this case, and agrees
voluntarily to consent to the jurisdiction of the United States to prosecute this case against him in
the United States District Court for the Southern District of Texas. The defendant also knowingly
and voluntarily waives the right to file any appeal, any collateral attack, or any other writ or
motion, including but not limited to an appeal under 18 U.S.C. § 3742 or a motion under 28 U.S.C.
§ 2241 or 2255, that challenges the sentence imposed by the Court if that sentence is consistent
with or below the recommended sentence in Paragraph 10 of this Plea Agreement, regardless of
how the sentence is determined by the Court. This agreement does not affect the rights or
obligations of the United States as set forth in 18 U.S.C. § 3742(b). Pursuant to Fed. R. Crim. P.
7(b), the defendant will waive indictment and plead guilty at arraignment to a two-count
Information to be filed in the United States District Court for the Southern District of Texas. Count
1 of the Information will charge the defendant with participating in a conspiracy to suppress and
eliminate competition by rigging bids, fixing prices and allocating market shares for sales of
marine hose sold in the United States and elsewhere, beginning at least as early as January 2004
and continuing until as late as May 2007 in unreasonable restraint of foreign and interstate trade
and commerce in violation of the Sherman Antitrust Act, 15 U.S.C. § 1. Count 2 of the Information
will charge the defendant with participating in a conspiracy to violate the laws of the United States, in violation of 18 U.S.C. § 371, that is, to violate the antibribery provisions of the Foreign
Corrupt Practices Act ("FCPA"), 15 U.S.C. § 78dd-3(a).
3. The defendant, pursuant to the terms of this Plea Agreement, will plead guilty to the criminal charges described in Paragraph 2 above and will make a factual admission of guilt to
the Court in accordance with Fed. R. Crim. P. 11, as set forth in Paragraph 4 below.
FACTUAL BASIS FOR OFFENSES CHARGED
4. The defendant is pleading guilty because he is in fact guilty of the charges contained
in Counts 1 and 2 of the Information. In pleading guilty to Counts 1 and 2 of the Information, the
defendant acknowledges and admits that the facts as stated in this Plea Agreement are true, that he
was aware of these facts during his employment at a major industrial products manufacturer
("Company-1"), and that if the case proceeded to trial, the United States would be able to prove
these facts beyond a reasonable doubt. The facts set forth in this Plea Agreement are not a
complete recitation of all facts relevant to the underlying criminal conduct or known to the
defendant that relate to his conduct, nor does the factual basis include all the relevant conduct that
may be considered by the Court for sentencing purposes.
- Beginning at least as early as January 2004 and continuing until as late as
May 2007 (the "Relevant Period"), the defendant was the General Manager of Company-1's International Engineered Products Department ("IEP") in Tokyo, Japan. Company-1 is
an entity organized and existing under the laws of Japan and with its principal place of
business in Tokyo, Japan. During the Relevant Period, Company-1 was a manufacturer of
marine hose and other products, including marine fenders, conveyor belts and rubber dams,
and was engaged in the sale of marine hose and other products in the United States and
elsewhere. Marine hose is a flexible rubber hose used to transfer oil between tankers and
storage facilities and/or buoys.
- As General Manager, the defendant oversaw Company-1's international
sales of marine hose and other marine products, supervised sales employees in Japan and
elsewhere, and, along with his supervisors and/or subordinates, approved Company-1's
pricing decisions. Within IEP, the defendant's subordinate employees included the
individuals holding the positions of "Section Manager" and "Person in Charge" for the
products manufactured by IEP. During the Relevant Period, the staff in Company-1's IEP
subsidiaries in Malaysia, the United Kingdom, and the United States ("U.S. Subsidiary")
also reported to the defendant. U.S. subsidiary is headquartered in the United States and
sells marine hose and other products in North, Central, and South America. U.S.
subsidiary, including through its Houston office, sells marine hose and other products to
customers in Latin America.
- Beginning at least as early as 1999 and continuing until as late as May 2007, co-conspirators of the defendant entered into and engaged in a conspiracy, the
primary purpose of which was to suppress and eliminate competition by rigging bids, fixing prices and allocating market shares for sales of marine hose sold in the United States
and elsewhere. The defendant joined and participated in the conspiracy during the Relevant Period. In furtherance of the conspiracy, the defendant attended meetings and
engaged in discussions with executives from other marine hose manufacturers, and with an
individual who acted as the coordinator of the cartel. During such meetings and
discussions, the defendant and co-conspirators agreed to rig bids, fix prices and allocate
market shares for the sale of marine hose in the United States and elsewhere. The
conspiring manufacturers provided a co-conspirator, who acted as a coordinator, with
information about upcoming marine hose jobs. The coordinator then designated, based on
rules agreed to by the conspirators, which of the conspiring manufacturers would win the
job. After the winning conspirator was designated, the coordinator provided the other
conspirators with instructions regarding how much to bid on the job to ensure that the
designated conspirator would win the job.
- During the Relevant Period, marine hose sold by one or more of the
conspirator firms, and equipment and supplies necessary to the production and distribution
of marine hose, as well as payments for marine hose, traveled in interstate and foreign
commerce. The business activities of the defendant and co-conspirators in connection with
the manufacture and/or sale of marine hose affected by this conspiracy were within the flow of, and substantially affected, interstate and foreign trade and commerce. During the
Relevant Period, the volume of commerce attributable to the defendant is greater than $10
million, but less than $40 million.
- Acts in furtherance of this conspiracy were carried out within the Southern
District of Texas within the Relevant Period. On at least one occasion, members of the
conspiracy attended a meeting in Houston during which the conspirators discussed the
implementation of the conspiracy. The defendant met with the cartel's coordinator in
Houston to discuss the conspiracy.
- To sell its IEP products throughout the world, Company-1 coordinated with
its regional subsidiaries, including U.S. Subsidiary. These regional subsidiaries typically
entered into commission-based contracts with local sales agents in the countries for which
they were responsible. U.S. Subsidiary, for example, entered into contracts with local sales agents in Argentina, Brazil, Ecuador, Mexico, and Venezuela, among other countries.
Typically, local sales agents were responsible for developing relationships with and keeping apprised of upcoming work with the potential customers in their respective
territories. Many of these local sales agents had relationships with officials in the
state-owned entities that were often Company-1's customers for IEP products.
Corrupt Payments in Latin America
POSSIBLE MAXIMUM SENTENCE
- For a substantial period of time, and beginning before the Relevant Period,
Company-1 has, through its local sales agents in Latin America and elsewhere, made
corrupt payments to various foreign government officials employed at state-owned
customers and employees of private customers to secure contracts for its IEP products,
including marine hose. For a substantial period of time, including during the Relevant
Period, Company-1 has made corrupt payments to government officials and employees of
private customers in various countries in Latin America through U.S. Subsidiary. The
defendant was aware of these circumstances and, during the Relevant Period, participated
in such conduct.
- To secure projects in Latin America, and in Mexico in particular, Company-1 made corrupt payments to government officials employed by state-owned
entities through U.S. Subsidiary's local sales agents. While the specifics varied among the
different engineered products, most sales within IEP generally followed a similar pattern.
Local sales agents gathered information related to potential projects and relayed that
information to their counterparts in the Company-1 regional subsidiaries. The regional
subsidiaries then forwarded the information provided by the local agents to the IEP
employee in Japan responsible for the particular product, typically to the relevant Person in Charge.
- The local agents often agreed to pay officials within the state-owned
customer a percentage of the total value of the proposed deal. Employees of Company-1's
regional subsidiaries, as well as their supervisors in Japan, were aware of and authorized
- Company-1 IEP and U.S. Subsidiary employees took steps to conceal these
payments. For example, to avoid creating an email or written record of the corrupt payments, some of the facsimiles sent from U.S. Subsidiary to Company-1 IEP that contained details of the payments, often including the exact amounts of the payments and the
identities of the individuals within the customer to whom the payments would be made,
reflected the handwritten notation: "Read and Destroy." On other occasions, in a further
effort to avoid creating a written record, Company-1 IEP and U.S. Subsidiary employees
addressed issues surrounding the corrupt payments by telephone.
- Company-1 IEP employees within the marine hose section, including the
Persons in Charge, Section Manager, or the General Manager, indicated their approval of a
proposed IEP deal by stamping their names on a financial spreadsheet that outlined the terms of the particular deal. In Japanese, this spreadsheet was called a Kessai Sho. The
Kessai Sho would include the expected sales price and/or profit and would sometimes
include the commission percentage for the particular deal. In certain circumstances, the
General Manager sought the approval of his supervisors for deals that included corrupt
- After Company-1 agreed to make corrupt payments to employees of the
customer to secure a project, Company-1's regional subsidiary placed the bid through the
local sales agent. Typically, if the regional subsidiary secured the project, it paid the local
sales agent a "commission," which included not only the local sales agent's actual
commission, but also whatever corrupt payments were to be paid to employees of the
customer. The local sales agent was then responsible for passing the agreed upon corrupt
payments to the employees of the customer.
- For a period of time starting before the Relevant Period, and continuing
through the end of the Relevant Period, co-conspirators of the defendant entered into and
engaged in a conspiracy to make corrupt payments to foreign government officials to secure
business and contracts for the purchase of IEP products, including the purchase of marine
hose. The defendant joined and participated in the conspiracy throughout the Relevant
Period. During the Relevant Period, Company-1, U.S. Subsidiary, and their local sales agents authorized more than $1,000,000 in corrupt payments to be given either directly or
indirectly to employees of state-owned customers.
- As General Manager, the defendant authorized and/or participated in having
the local agents make corrupt payments to employees of Company-1's and U.S. Subsidiary's customers in order to secure business for Company-1 and U.S. Subsidiary. The defendant's involvement included, but was not limited to, both his specific authorization of certain corrupt payments and his stamped approval on Kessai Shos for
projects which he knew included corrupt payments to employees of Company-1's and U.S.
Subsidiary's customers. In authorizing and/or participating in having the local agents make
corrupt payments to employees of Company-1's and U.S. Subsidiary's customers, the
defendant was aware that certain of those customers were state-owned enterprises, in whole or in part, and that, therefore, certain of their employees were foreign government
officials. Furthermore, during his employment as General Manager, the defendant was
aware that the authorization and payment of money or things of value corruptly to foreign
government officials to assist in obtaining business was illegal under U.S. law.
- In furtherance of the conspiracy described in Paragraph 4(f)-(n), the
following acts, among others, occurred within the Southern District of Texas and
- U.S. Subsidiary employees in Houston, Texas corresponded by
facsimile with employees of Company-1 IEP in Tokyo, Japan, identifying both the
percentages of the corrupt payments and the ultimate foreign public official
recipients (on occasion by name, position and/or initials) of those corrupt payments
in connection with contracts to sell IEP products to state-owned customers in
various Latin American countries;
- U.S. Subsidiary employees in Houston, Texas corresponded by
email with the defendant and other employees of Company-1 IEP in Tokyo, Japan,
discussing projects in which corrupt payments were made to employees of state-owned customers; and
- U.S. Subsidiary employees in Houston, Texas communicated by
telephone with employees of Company-1 IEP in Tokyo, Japan, discussing and
planning corrupt payments, including payments to employees of state-owned
5. For Count 1, the defendant understands that the statutory maximum penalty which may be imposed against him upon conviction for a violation of Section One of the Sherman
Antitrust Act is:
- a term of imprisonment for 10 years (15 U.S.C. § 1);
- a fine in an amount equal to the greatest of (1) $1 million, (2) twice the gross pecuniary gain the conspirators derived from the crime, or (3) twice the
gross pecuniary loss caused to the victims of the crime by the conspirators (15 U.S.C. § 1;
18 U.S.C. § 3571(b) and (d)); and
- a term of supervised release of three (3) years following any term of imprisonment. If the defendant violates any condition of supervised release, the defendant could be imprisoned for up to two (2) years (18 U.S.C. § 3559(a)(3); 18
U.S.C. § 3583(b)(2) and (e)(3); and United States Sentencing Guidelines ("U.S.S.G.," "Sentencing Guidelines," or "Guidelines") §5D1.2(a)(2)).
6. For Count 2, the defendant understands that the statutory maximum penalty which may be imposed against him upon conviction for a violation of 18 U.S.C. § 371 is:
- a term of imprisonment for 5 years;
- a fine in an amount equal to the greatest of (1) $250,000, (2) twice the gross pecuniary gain the conspirators derived from the crime, or (3) twice the gross
pecuniary loss caused to the victims of the crime by the conspirators (18 U.S.C. § 3571);
- a term of supervised release of three (3) years following any term of imprisonment (18 U.S.C. § 3559(a)(4); 18 U.S.C. § 3583(b)(2); and U.S.S.G.
§5D1.2(a)(2)). If the defendant violates any condition of supervised release, the defendant could be imprisoned for up to two (2) years (18 U.S.C. § 3583(e)(3)).
7. In addition, the defendant understands that:
- pursuant to U.S.S.G. §5E1.1 or 18 U.S.C. § 3663, the Court may order him to pay restitution to the victims of the offenses; and
- pursuant to 18 U.S.C. § 3013(a)(2)(A), the Court is required to order the defendant to pay a $100.00 special assessment for each Count upon conviction for the
8. The defendant understands that the Sentencing Guidelines are advisory, not
mandatory, but that the Court must consider the Guidelines in effect on the day of sentencing, along
with the other factors set forth in 18 U.S.C. § 3553(a), in determining and imposing sentence. The
defendant understands that the Guidelines determinations will be made by the Court by a
preponderance of the evidence standard. The defendant understands that although the Court is not
ultimately bound to impose a sentence within the applicable Guidelines range, its sentence must be
reasonable based upon consideration of all relevant sentencing factors set forth in 18 U.S.C. §
3553(a). Accordingly, Defendant will have the right to present to the Court relevant factors as
contemplated by 18 U.S.C. §3553(a) in support of the recommended sentence contained in
Paragraph 10 of this Agreement. Pursuant to U.S.S.G. §1B1.8, the United States agrees that
self-incriminating information that the defendant provides to the United States pursuant to this Plea
Agreement will not be used in determining the defendant's applicable Guidelines range, except to
the extent provided in U.S.S.G. §1B1.8(b).
9. The United States and the defendant agree that Counts 1 and 2 should not be
grouped together as "closely related counts" under U.S.S.G. §3D1.2, and pursuant to U.S.S.G.
§6B1.4, enter into the following stipulations:
- Count 1
- The base offense level applicable to Count 1, as established by
U.S.S.G. §2R1.1(a), is 12.
- The offense to which the defendant is pleading guilty in Count 1
involved participation in an agreement to submit non-competitive
bids, within the meaning of U.S.S.G. §2R1.1(b)(1), which increases
the offense level by 1.
- The volume of commerce attributable to the defendant within the
meaning of U.S.S.G. §2R1.1(b)(2) for the offense in Count 1 is more
than $10,000,000, but less than $40,000,000, which increases the
offense level by 4.
- Based on the defendant's role in the offense charged in Count 1, a
three-level increase in the offense level is appropriate pursuant to
- The adjusted offense level for Count 1 is 20.
- Count 2
- The base offense level applicable to Count 2, as established by
U.S.S.G. §2C1.1(a)(2), is 12.
- The offense to which the defendant is pleading guilty in Count 2
involved more than one bribe within the meaning of U.S.S.G. §2C1.1(b)(1), which increases the offense level by 2.
- The amount of corrupt payments attributable to the defendant within
the meaning of U.S.S.G. §2C1.1(b)(2) for the offense in Count 2 is more
than $1,000,000, which increases the offense level by 16.
- The adjusted offense level for Count 2 is 30.
- The combined offense level for Counts 1 and 2, pursuant to U.S.S.G. §3D1.4, is 30.
- For purposes of U.S.S.G. §3E1.1, a three-level reduction of the combined
offense level for defendant's acceptance of responsibility is appropriate, in the
event that the defendant enters a plea of guilty to the Information pursuant to this
plea agreement. However, should the United States obtain or receive additional
evidence or information prior to sentencing that, in its sole discretion, it determines
to be credible and materially in conflict with this stipulation, then the United States
shall no longer be bound by this stipulation.
- Based on the foregoing, defendant's adjusted offense level for the offense to
which he is pleading guilty is 27. The Guidelines sentencing range for offense level 27 is 70 to 87 months imprisonment. The defendant's appropriate Guidelines
fine range within the meaning of §2R1.1(c)(1) for the offense in Count 1 is
$107,000 to $535,000. The defendant's appropriate Guidelines fine range within
the meaning of §5E1.2(c)(3) for the offense in Count 2 is $12,500 to $125,000.
10. Pursuant to Fed. R. Crim. P. 11(c)(1)(B), the United States agrees that it will
recommend, as the appropriate disposition of this case, that the Court impose a sentence requiring
the defendant to pay to the United States a criminal fine of $80,000 to be paid, pursuant to U.S.S.G.
§5E1.2(f), in installments with interest accruing under 18 U.S.C. § 3612(f)(1)-(2) as follows:
within fifteen (15) days of imposition of sentence -- $40,000; at the one-year anniversary of
imposition of sentence$40,000; provided, however, that the defendant shall have the option at any
time before the one-year anniversary of prepaying the remaining balance then owing on the fine, and requiring the defendant to serve a period of imprisonment of twenty-four (24) months ("the
recommended sentence"). The defendant agrees that he will not oppose this recommendation. The
parties agree that there exists no aggravating or mitigating circumstance of a kind, or to a degree,
not adequately taken into consideration by the U.S. Sentencing Commission in formulating the
Sentencing Guidelines justifying a departure pursuant to U.S.S.G. §5K2.0. The parties agree not to
seek or support any sentence outside of the Guidelines range nor any Guidelines adjustment for any
reason that is not set forth in this Plea Agreement. The parties further agree that the recommended
sentence set forth in this Plea Agreement is reasonable. The parties further agree that no term of
supervised release following imprisonment is necessary. The United States agrees that it will not
seek an order of restitution in relation to Count 1 because of the availability of civil causes of
action. The defendant understands that the Court will order him to pay a $100 special assessment
per count of conviction pursuant to 18 U.S.C. § 3013(a)(2)(A) in addition to any fine imposed.
11. The United States will not object to defendant's request to waive a pre-sentence
investigation and report and for the Court to conduct a sentencing hearing and impose sentence
immediately upon entry of the defendant's plea. The United States will not object to defendant's
request that the Court recommend to the U.S. Bureau of Prisons that the defendant be assigned to
the minimum security satellite prison camp at the Lompoc Federal Correctional Complex in
Lompoc, California to serve his sentence. The United States also agrees not to object to defendant's request to be released, following imposition of sentence, on his personal
recognizance, under 18 U.S.C. §3142, and to be allowed to self-surrender to the assigned facility
on the date specified by the Court or the U.S. Bureau of Prisons.
12. The United States and the defendant agree that the defendant's applicable
Guidelines imprisonment and fine ranges set out in Paragraph 9 exceed the term of imprisonment
and fine contained in the recommended sentence set out in Paragraph 10. Subject to the full and
continuing cooperation of the defendant, as described in Paragraph 15 of this Plea Agreement, and
prior to sentencing in this case, the United States agrees that it will make a motion, pursuant to
U.S.S.G. §5K1.1, for a downward departure from the Guidelines imprisonment and fine ranges in
this case and will request that the Court impose the recommended sentence as set out in Paragraph
10 of this Plea Agreement because of the defendant's substantial assistance in the investigations
and prosecutions of violations of criminal laws including: the criminal antitrust conspiracy in the
marine hose industry; the conspiracy to violate the Foreign Corrupt Practices Act; and any other
investigation and prosecution resulting from the investigation and prosecution of these crimes.
13. Subject to the ongoing, full, and truthful cooperation of the defendant described in Paragraph 15 of this Plea Agreement, and before sentencing in the case, the United
States will fully advise the Court and the Probation Office of the fact, manner, and extent of the
defendant's cooperation and his commitment to prospective cooperation with investigations and
prosecutions, all material facts relating to the defendant's involvement in the charged offenses, and
all other relevant conduct.
14. The United States and the defendant understand that the Court retains complete
discretion to accept or reject the recommended sentence provided for in Paragraph 10 of this Plea
Agreement. The defendant understands that, as provided in Fed. R. Crim. P. 11(c)(3)(B), if the
Court does not impose a sentence consistent with the recommendation contained in this Plea
Agreement, he nevertheless has no right to withdraw his plea of guilty.
15. The defendant will cooperate fully and truthfully. That cooperation includes, but is
not limited to, cooperating with the United States in the prosecution of this case and the United
States' investigations and prosecutions of violations of federal criminal laws including the
criminal antitrust conspiracy in the marine hose industry and the conspiracy to violate the Foreign
Corrupt Practices Act; any other federal investigation resulting from the investigation and
prosecution of these crimes; and any litigation or other proceedings arising or resulting from any
such investigation to which the United States is a party ("Federal Proceeding"). The ongoing, full,
and truthful cooperation of the defendant shall include, but not be limited to:
UNITED STATES' AGREEMENT
- producing in the United States and at other mutually agreed-upon locations all non-privileged documents, including claimed personal documents, and
other materials, wherever located, in the possession, custody, or control of the defendant,
requested by attorneys and agents of the United States;
- making himself available for interviews in the United States and at other mutually agreed-upon locations, not at the expense of the United States, upon the request of attorneys and agents of the United States;
- responding fully and truthfully to all inquiries of the United States in connection with any Federal Proceeding, without falsely implicating any person
or intentionally withholding any information, subject to the penalties of making false
statements (18 U.S.C. § 1001) and obstruction of justice (18 U.S.C. § 1503, et seq.);
- otherwise voluntarily providing the United States with any non-privileged material or information, not requested in (a) - (c) of this paragraph, that he
may have that is related to any Federal Proceeding; and
- when called upon to do so by the United States in connection with any Federal Proceeding, testifying in grand jury, trial, and other judicial proceedings in the United States, fully, truthfully, and under oath, subject to the
penalties of perjury (18 U.S.C. § 1621), making false statements or declarations in grand
jury or court proceedings (18 U.S.C. § 1623), contempt (18 U.S.C. §§ 401 - 402), and
obstruction of justice (18 U.S.C. § 1503, et seq.).
16. Subject to the full, truthful, and continuing cooperation of the defendant, as
described in Paragraph 15 of this Plea Agreement, and upon the Court's acceptance of the guilty
plea called for by this Plea Agreement and the imposition of sentence, the United States will not
bring further criminal charges against the defendant for any act or offense committed before the
date of this Plea Agreement that was undertaken in furtherance of either an antitrust conspiracy
involving the manufacture or sale of marine hose or the corrupt payments conspiracy (including
bribery and related offenses) arising out of the facts as described in Paragraphs 2 and 4 of this Plea Agreement or undertaken in connection with any investigation of such conspiracies
("Relevant Offenses"). The nonprosecution terms of this paragraph do not apply to civil matters of
any kind, to any violation of the federal tax or securities laws, or to any crime of violence.
17. The United States agrees that when the defendant travels to the United States for interviews, grand jury appearances, or court appearances pursuant to this Plea Agreement, or for
meetings with counsel in preparation therefor, the United States will take no action, based upon
any Relevant Offenses, to subject the defendant to arrest, detention, or service of process, or to
prevent the defendant from departing the United States. This paragraph does not apply to the
defendant's commission of perjury (18 U.S.C. § 1621), making false statements (18 U.S.C. §
1001), making false statements or declarations in grand jury or court proceedings (18 U.S.C. §
1623), obstruction of justice (18 U.S.C. § 1503, et seq.), or contempt (18 U.S.C. §§ 401 - 402) in
connection with any testimony or information provided or requested in any Federal Proceeding.
18. The defendant understands that he may be subject to administrative action by federal or state agencies other than the United States Department of Justice, Antitrust and Criminal
Divisions, based upon the convictions resulting from this Plea Agreement, and that this Plea
Agreement in no way controls whatever action, if any, other agencies may take. However, the
United States agrees that, if requested, it will advise the appropriate officials of any governmental
agency considering such administrative action of the fact, manner, and extent of the cooperation of
the defendant as a matter for that agency to consider before determining what administrative action,
if any, to take.
REPRESENTATION BY COUNSEL
19. The defendant has reviewed all legal and factual aspects of this case with his
undersigned attorneys and is fully satisfied with his attorneys' legal representation. The defendant
has thoroughly reviewed this Plea Agreement with his attorneys and has received satisfactory
explanations from his attorneys concerning each paragraph of this Plea Agreement and alternatives
available to the defendant other than entering into this Plea Agreement. After conferring with his
attorneys and considering all available alternatives, the defendant has made a knowing and
voluntary decision to enter into this Plea Agreement.
20. The defendant's decision to enter into this Plea Agreement and to tender a plea ofguilty is freely and voluntarily made and is not the result of force, threats, assurances, promises, or
representations other than the representations contained in this Plea Agreement. The United States
has made no promises or representations to the defendant as to whether the Court will accept or
reject the recommendations contained within this Plea Agreement.
VIOLATION OF PLEA AGREEMENT
21. The defendant agrees that, should the United States determine in good faith, during the period that any Federal Proceeding is pending, that the defendant has failed to provide
full and truthful cooperation, as described in Paragraph 15 of this Plea Agreement, or has
otherwise violated any provision of this Plea Agreement, the United States will notify the
defendant or his counsel in writing by personal or overnight delivery or facsimile transmission and
may also notify his counsel by telephone of its intention to void any of its obligations under this
Plea Agreement (except its obligations under this paragraph), and the defendant shall be subject to
prosecution for any federal crime of which the United States has knowledge including, but not
limited to, the substantive offenses relating to the investigation resulting in this Plea Agreement.
The defendant agrees that, in the event that the United States is released from its obligations under
this Plea Agreement and brings criminal charges against the defendant for any Relevant Offenses,
the statute of limitations period for such offense shall be tolled for the period between the date of the signing of this Plea Agreement and six (6) months after the date the United States gave notice of
its intent to void its obligations under this Plea Agreement.
22. The defendant understands and agrees that in any further prosecution of him resulting from the release of the United States from its obligations under this Plea Agreement based
on the defendant's violation of the Plea Agreement, any documents, statements, information,
testimony, or evidence provided by him to attorneys or agents of the United States, federal grand
juries, or courts, and any leads derived therefrom, may be used against him in any such further
prosecution. In addition, the defendant unconditionally waives his right to challenge the use of such evidence in any such further prosecution, notwithstanding the protections of Fed. R. Evid. 410.
23. The defendant agrees to and adopts as his own the factual statement contained in Paragraph 4. In the event that the defendant breaches the Plea Agreement, the defendant agrees that
this Plea Agreement, including the factual statement contained in Paragraph 4, provides a sufficient
basis for any possible future extradition request that may be made for his return to the United States
to face charges either in the Information referenced in Paragraph 2 of this Plea Agreement or in any
related indictment. The defendant further waives any right to, and agrees not to, oppose or contest,
on any grounds, any request for extradition by the United States to face charges either in the
Information referenced in Paragraph 2 of this Plea Agreement or in any related indictment.
ENTIRETY OF AGREEMENT
24. This Plea Agreement constitutes the entire agreement between the United States and the defendant concerning the disposition of the criminal charges in this case. This Plea
Agreement cannot be modified except in writing, signed by the United States and the defendant.
25. The undersigned attorneys for the United States have been authorized by the Attorney General of the United States to enter this Plea Agreement on behalf of the United States.
26. A facsimile signature shall be deemed an original signature for the purpose of executing this Plea Agreement. Multiple signature pages are authorized for the purpose of
executing this Plea Agreement.
James H. Mutchnik, P.C.
Christopher T. Casamassima, Esq.
Kirkland & Ellis LLP
200 East Randolph Drive
Chicago, Illinois 60601
Counsel for Defendant
Philip H. Hilder, Esq.
State Bar #09620050
Hilder & Associates, P.C.
819 Lovett Blvd.
Houston, TX 77006-3905
Counsel for Defendant
J. Brady Dugan
Craig Y. Lee
Portia R. Brown
Mark C. Grundvig
Attorneys, Antitrust Division
U.S. Department of Justice
National Criminal Enforcement Section
450 5th Street, NW, Suite 11300
Washington, DC 20005
Counsel for the United States
Steven A. Tyrrell
Chief, Fraud Section
Deputy Chief, Mark F. Mendelsohn
Trial Attorney, Brigham Q. Cannon
U.S. Department of Justice
1400 New York Avenue NW
Washington, DC 20530
Counsel for the United States