Criminal Program Update 2015

Criminal Program Update 2015

Division Update Spring 2015

The Antitrust Division continues to hold both executives and corporations accountable for antitrust crimes. Last year, 44 executives and 18 companies were charged with price-fixing, bid-rigging, and fraud offenses. These prosecutions help ensure that American consumers reap the benefits of competitive markets. The Division benefits from the assistance provided by colleagues at other Federal law enforcement agencies, including the Federal Bureau of Investigation, the Internal Revenue Service, the Defense Criminal Investigative Service, and the Inspectors General for the Post Office and Department of Commerce.

Holding Individuals Accountable

The 44 individuals charged by the Division in FY 2014 included 22 auto parts executives and 11 real estate investors. Twenty-one individuals were sentenced to serve time in jail in FY 2014. These results reflect the Division’s long-running efforts to ensure that corporate executives face the consequences of their crimes, including significant jail time. As shown below, the average number of individuals sentenced to jail terms, and the average length of those terms, continue to increase.

Average Number of Individuals Sentenced to Prison Each Year

Average Prison Sentence in Months




Extraditing Foreign Defendants

Last year, the Division secured the first ever extradition on an antitrust charge. An Italian national was extradited from Germany on a charge of participating in a conspiracy to suppress and eliminate competition by rigging bids, fixing prices, and allocating market shares for marine hose sold in the United States and elsewhere. In connection with the environmental services investigation, the Division also successfully extradited a Canadian national charged with a kickback and fraud conspiracy and major fraud against the United States. As part of the alleged schemes, the co-conspirators would exchange kickbacks for the award of subcontracts at New Jersey Superfund sites.

These extraditions mark continuing progress in the Division’s efforts to collaborate with antitrust enforcers worldwide to ensure that all offenders who violate U.S. laws are brought to justice. The Division continues to work closely with antitrust agencies around the world on individual cases and policy matters.

Obtaining Significant Fines

In the last fiscal year, the Division obtained nearly $1.3 billion in criminal fines and penalties, the largest amount ever obtained by the Division in a single fiscal year. Additionally, as part of a Department-wide initiative, the Division recently began reporting the amount of criminal fines and penalties actually collected which totaled $1.86 billion for FY 2014. All criminal fines obtained by the Division are deposited into the Crime Victims Fund, which provides support to victims and families whose lives have been impacted by crime throughout our nation.

Criminal Antitrust Fines and Penalties Obtained


New Prosecutions: Online Sales and Parking Heaters

Wall Décor—Division’s First Online Marketplace Prosecution

On April 6, 2015, the Division prosecuted its first defendant in connection with an online price-fixing scheme. The defendant and his co-conspirators sold art posters on Amazon Marketplace. But rather than competing, they used pricing algorithms to fix prices. Those pricing algorithms allowed the co-conspirators to coordinate the changes to their prices in conformity with the price-fixing agreement. The Division’s investigation into other conspirators continues.

Parking Heaters—First Defendant Pleads Guilty

On March 12, 2015, the Division obtained the first guilty plea in its ongoing investigation of collusion among manufacturers of aftermarket commercial vehicle parking heaters. Parking heaters heat a truck’s passenger compartment even if the engine is not running. Espar, Inc. pleaded guilty to conspiring to fix the price of aftermarket parking heaters and has agreed to pay a fine of $14.97 million. The Division’s investigation into other conspirators continues.

Updates on Ongoing Prosecutions

The Division’s vigorous enforcement efforts against domestic and international cartels continue to generate positive results for American consumers in diverse industries such as auto parts, financial services, and environmental services.

More Auto Parts Prosecutions

The Division’s efforts to prosecute collusion among automobile parts manufacturers continue to yield significant results. In FY 2014, an additional nine companies and 22 individuals were charged with participating in conspiracies to fix prices and rig bids on automobile parts. These recently filed cases involved more than 20 different auto parts ranging from brake hoses to spark plugs to seatbelts. The Division continues to cooperate on this investigation with its counterparts in Japan, South Korea, the European Commission, Canada, and other jurisdictions.

To date, the auto parts investigation has resulted in charges against 34 companies and 52 individuals. In total, 29 executives have pleaded guilty and been sentenced to an average of nearly 15 months in jail. Additionally, 34 corporations have pleaded guilty or agreed to plead guilty and have agreed to pay more than $2.4 billion in criminal fines.

Prosecuting Collusion and Fraud in Financial Services

109 individuals convicted since 2009; $1.3 billion in fines and penalties obtained in since 2009

The Division continues to prosecute collusion and fraud in the financial services industry, including real estate investors and bidders at tax lien auctions. Since 2009, the Division has obtained 109 convictions and more than $1.3 billion in corporate fines, penalties, and settlements from the investigation and prosecution of collusion and fraud in the municipal bond securities, LIBOR, real estate, and tax lien industries.

In the last year, 30 individuals have been charged in the real estate foreclosure auction investigations. To date, 81 individuals have pleaded guilty or been convicted and 21 are awaiting trial.

And in the tax liens investigation, in FY 2014, five individuals and two companies were charged. Overall, 16 individuals and five companies have been charged; 15 convictions have been obtained; and $2 million in criminal fines have been imposed. Four individuals and two companies are still awaiting trial.

Cleaning Up Environmental Services

In the environmental services investigation, nine individuals and three companies have pleaded guilty or been convicted of charges arising out of this investigation. To date, more than $6 million in criminal fines and restitution have been imposed and six defendants have been sentenced to serve prison sentences. The last defendant to be sentenced received a 14-year sentence, the longest jail term ever imposed involving an antitrust crime in a multicount indictment.

Ninth Circuit Affirms AU Optronics Conviction

In 2012, the Division won guilty verdicts against AU Optronics, its U.S. subsidiary, and two top executives for conspiring to fix the prices of liquid crystal display panels sold worldwide.  The district court imposed substantial jail terms on the executives, a record $500 million criminal fine against AU Optronics, and appointed an independent monitor as a term of the company’s probation.

In July 2014, the Ninth Circuit affirmed these convictions and sentences. It held that the Sherman Act applied to the conspiracy, despite its foreign origins, because it involved U.S. import commerce. And in January 2015, the court denied the defendants’ rehearing petitions. At the same time, it amended its opinion to further hold that the Sherman Act also applied because the conspiracy had a direct effect on U.S. import commerce. These holdings reaffirm prior court rulings that price-fixing cartels that involve and significantly affect U.S. commerce cannot escape the reach of U.S. antitrust enforcement by operating overseas.