Civil Investigations Uncover Evidence of Criminal Conduct

Division Update Spring 2017

Recent Division criminal cases in the packaged seafood and hop-on, hop-off tour bus markets arose in part from evidence uncovered in civil investigations in those industries. These investigations reflect civil staff’s attention to detail and the ability of both civil and criminal staff to appropriately execute parallel proceedings.

Packaged Seafood

Packaged Seafood

Photo Credit: digicomphoto/iStock/Thinkstock

The Division recently investigated the proposed merger of Thai Union Group P.C.L., owner of Tri-Union Seafoods LLC, d/b/a Chicken of the Sea International (Chicken of the Sea) and Bumble Bee Foods LLC (Bumble Bee), which was publicly announced in mid-2015. As civil attorneys reviewed information and party materials produced in the ordinary course of business, they discovered materials that appeared to raise criminal concerns. Recognizing the potential criminal implications of the materials, they reached out to their criminal counterparts in the Division.

As a result of the civil attorneys’ keen eyes, the Division opened a criminal investigation into collusion in the packaged seafood industry. To date, the criminal investigation has resulted in guilty pleas from two senior vice presidents of leading packaged seafood companies for conspiring to fix the price of packaged seafood, such as canned tuna. The Division’s criminal investigation is ongoing. The merger, however, was abandoned.

Hop-On, Hop-Off Tour Buses

Hop-On, Hop-Off Tour Buses

Photo Credit: Feng Yu/Hemera/Thinkstock

The Division’s investigation into a New York City tour bus joint venture led to a civil settlement and a criminal charge, in that case for obstruction of justice. After a civil investigation, the Division concluded that the formation of Twin America LLC gave former competitors Coach USA Inc. and City Sights LLC an unlawful monopoly over the New York City hop-on, hop-off tour bus market and allowed them to increase prices to customers. The civil investigation resulted in a settlement in March 2015 in which the defendants relinquished all of City Sights’ Manhattan bus stop authorizations and disgorged $7.5 million in ill-gotten profits.

In the course of their investigation, the civil attorneys were alerted to potential spoliation and obstruction. They alerted their criminal counterparts to this behavior, and the Division opened a criminal investigation into Coach USA Inc.’s former vice president of information technology for concealing and attempting to destroy documents relevant to the civil investigation.

In October 2016, the former vice president of information technology pleaded guilty to obstruction of justice charges relating to this conduct. On March 23, 2017, he was sentenced to 15 months’ imprisonment.

Updated March 28, 2017