FOR IMMEDIATE RELEASE AT
TUESDAY, DECEMBER 3, 1996 (202) 616-2771
TDD (202) 514-1888
FORMER TOP ADM EXECUTIVES, JAPANESE EXECUTIVE,
INDICTED IN LYSINE PRICE FIXING CONSPIRACY
Korean Company Also Charged: Agrees to Plead Guilty, Pay Fine
and Cooperate with the Government's Investigation
WASHINGTON -- A Chicago federal grand jury indicted three
former top Archer Daniels Midland Co. executives and one Japanese
executive today for conspiring to fix prices and allocate sales
in the lysine market worldwide, the Department of Justice
announced. A Korean company also agreed to plead guilty to
separate charges and pay a $1.25 million fine for its role in the
conspiracy.
This is the third round of charges brought as a result of
the Department's investigation into the food and feed additives
industry. In October, ADM pleaded guilty and was sentenced to
pay a $100 million criminal fine--the largest criminal antitrust
fine ever--for its role in two international conspiracies to fix
prices and allocate sales in the lysine and citric acid markets
worldwide.
Today's indictment charged the following individuals:
-- Michael D. Andreas of Decatur, Illinois, executive vice
president of ADM (on leave).
-- Mark E. Whitacre of Chapel Hill, North Carolina, former
president of ADM's BioProducts Division.
-- Terrance S. Wilson of Decatur, Illinois, former group
vice president and president of ADM's Corn Processing
Division.
-- Kazutoshi Yamada of Tokyo, Japan, managing director of
Ajinomoto Co. Inc.
"These charges should signal to business executives, both at
home and abroad, that we will vigorously pursue individuals
involved in international cartels wherever they are," said
Joel I. Klein, Acting Assistant Attorney General in charge of the
Department's Antitrust Division.
Klein said that the Department's food and feed additives
investigations into the lysine, citric acid, and high fructose
corn syrup markets continues.
The indictment charges that the defendants conspired with
four previously charged companies--ADM, Ajinomoto Co. Inc., Kyowa
Hakko Kogyo Co. Ltd., and Sewon America Inc.--and other unnamed
corporate and individual co-conspirators to suppress competition
in the lysine market in the U.S. and elsewhere by fixing the
price and allocating sales volumes from June 1992 through June
27, 1995 in violation of the Sherman Antitrust Act.
Also today, Cheil Jedang Ltd. of Seoul, Korea, agreed to
plead guilty and pay a $1.25 million fine for participating in
the lysine price fixing and sales volume allocation conspiracy.
The plea agreement must be approved by the court.
The indictment and the criminal information against Cheil,
which were both filed today in U.S. District Court in Chicago,
charge that the defendants met with their co-conspirators in the
lysine market to set the price and allocate the sales volumes of
lysine. The defendants will be arraigned at a later date in
federal court in Chicago. Lysine, a $600 million a year
industry, is used by farmers as a feed additive to ensure the
proper growth of swine and poultry.
The indictment and information further charge that the
defendants and co-conspirators:
Agreed to charge lysine prices at agreed-upon levels and
to increase those prices accordingly.
Agreed to allocate among the corporate conspirators the
volume of lysine to be sold by each.
Issued price announcements and price quotations in
accordance with the agreements.
Participated in meetings and conversations for the
purpose of monitoring and enforcing adherence to the
agreed upon prices and sales volumes.
"Today's charges demonstrate that regardless of how much
money a corporation pays in a fine to settle criminal charges,
the individual executives at that corporation who have violated
the antitrust laws will not escape prosecution for their wrongful
conduct," said Gary R. Spratling, the Antitrust Division's Deputy
Assistant Attorney General for Criminal Enforcement.
Today's charges arose in connection with an extensive
investigation into illegal, collusive practices by the producers
of lysine being conducted by the Chicago Field Office of the
Antitrust Division, the office of United States Attorney James B.
Burns in Chicago, and the Federal Bureau of Investigation in
Springfield, Illinois.
All of the defendants previously charged in this price
fixing and sales volume allocation conspiracy have agreed to
cooperate with the government's continuing investigation. The
companies and individuals already charged in the lysine
conspiracy are:
-- ADM, which pleaded guilty on October 15 to charges that
it also participated in a separate price fixing and
sales volume allocation conspiracy in the citric acid
market. The company was sentenced to pay a record $100
million in criminal fines as a result of its
convictions for the two conspiracies. ADM is based in
Decatur, Illinois.
-- Ajinomoto Co. Inc. of Tokyo, Japan, and Kanji Mimoto,
its former general manager of the Feed Additives
Division and current associate general manager of the
International Division. Mimoto lives in Japan.
-- Kyowa Hakko Kogyo Co. Ltd. of Tokyo, Japan and Masaru
Yamamoto, its former general manager of the
Agricultural Products Department and current general
manager of the Food Division. Yamamoto lives in Japan.
-- Sewon America Inc., located in Paramus, New Jersey, and
Jhom Su Kim, its president. Sewon America is a
subsidiary of Sewon Company Ltd., located in Seoul,
South Korea. Kim is from Korea and currently lives in
Ridgewood, New Jersey.
"All of the previously charged corporate and individual
defendants agreed to cooperate fully with the Department's
investigation by providing documents and witnesses who will be
available to testify in the United States," said James B. Burns,
U.S. Attorney for the Northern District of Illinois. "Through
their cooperation, we have already received valuable
information."
Spratling said that Cheil authorized the Department to
disclose the basic terms of the company's plea agreement. Cheil
also agreed to cooperate with the investigation and prosecution
by providing documents and witnesses who will be available to
testify in the United States.
The defendants are charged with violating Section 1 of the
Sherman Act, which carries a maximum fine of $10 million for
corporations and a maximum penalty of three years imprisonment
and a $350,000 fine for individuals.
The fines for both corporations and individuals may be
increased to twice the gain derived from the crime by the
defendant or twice the loss suffered by the victims of the crime,
if either of those amounts is greater than the statutory maximum
fine of $10 million for corporations and $350,000 for
individuals.
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