Safeguarding Taxpayer Dollars: The Antitrust Division Announces Criminal Charges and Civil Settlements for Bid Rigging and Fraud Targeting U.S. Military Bases in South Korea

Antitrust Division Spring Update 2019

In November 2018 and March 2019, the Division announced global resolutions of criminal charges and civil claims against five South Korea-based companies arising from a decade-long bid-rigging conspiracy that targeted fuel supply contracts to U.S. military bases in South Korea. As a result of defendants’ conduct, the United States Department of Defense paid substantially more for fuel supply services in South Korea than it would have if the defendants had competed for the fuel supply contracts. To resolve both the criminal charges and civil claims, the companies agreed to plead guilty and pay a total of over $350 million in criminal fines and civil damages.

Criminal Cases

Five South Korean petroleum and refinery companies agreed to pay a total of over $150 million in criminal fines to resolve charges relating to a conspiracy to rig bids and fix prices for fuel supply contracts with the U.S. military. SK Energy Co. Ltd., GS Caltex Corporation, Hanjin Transportation Co. Ltd., Hyundai Oilbank, Co., Ltd., and S-Oil Corporation agreed to plead guilty for their involvement in the conspiracy.

An unsealed superseding indictment returned in September 2018 also charged seven individual defendants with participating in this bid-rigging conspiracy and scheme to defraud the U.S. Government. One individual defendant was also charged with obstruction of justice.

Civil Cases

In separate civil settlements, the same five companies also agreed to resolve parallel civil antitrust and False Claims Act violations and pay more than an additional $200 million in damages to the United States. The civil claims were brought under Section 4A of the Clayton Act, an important but underused enforcement tool that allows the Government to recover treble damages for antitrust violations when the Government is a victim. These settlements are the largest since the enactment of Section 4A and the first significant settlements under Section 4A in many years. They reflect the Division’s commitment to seeking compensation for American taxpayers when the Government has been the victim of an antitrust violation.

 

Updated March 28, 2019

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