Former President of Auto Parts Company Pleads Guilty to Participating in Body Sealing Products Bid-Rigging Conspiracy
The former president of an automotive parts company pleaded guilty today and was sentenced to serve 18 months in a U.S. prison for his role in a conspiracy to fix prices and rig bids for the sale of automotive body sealing products sold in the United States, the Justice Department announced.
Keiji Kyomoto, a former executive of an automotive body sealing products supplier based in Hiroshima, Japan, and former president of its U.S. joint venture, pleaded guilty today in the U.S. District Court for the Eastern District of Kentucky to a single-count indictment charging him with bid rigging and price fixing. As part of his plea agreement, Kyomoto also agreed to pay a $20,000 criminal fine.
“Today’s plea is yet another example of our commitment to holding senior-level executives accountable for corporate wrongdoing,” said Deputy Assistant Attorney General Brent Snyder of the Justice Department’s Antitrust Division. “Whether collusion has affected automobile parts, shipping services, financial products, electronic components or even heir location services, the department has a strong and ever increasing record of prosecuting individuals in order to deter criminal antitrust practices.”
“The FBI is committed to aggressively investigating individuals who engage in criminal conduct that corrupts the global marketplace,” said Special Agent in Charge Howard S. Marshall of the FBI’s Louisville Division. “We will continue our work with the Department of Justice Antitrust Division to uncover schemes aimed at creating an unfair competitive advantage by way of price fixing, bid rigging or other illegal means.”
On Oct. 8, 2015, a federal grand jury in Covington, Kentucky, returned an indictment against Kyomoto and two other individuals, charging them with conspiring to rig bids for and fix the prices of body sealing products sold to Honda Motor Company Ltd., Toyota Motor Corp. and certain of their subsidiaries and affiliates for installation in vehicles manufactured and sold in the United States and elsewhere. Automotive body sealing products consist of body-side opening seals, door-side weather-stripping, glass-run channels, trunk lids and other smaller seals, which are installed into automobiles to keep the interior dry from rain and free from wind and exterior noises.
According to the indictment, Kyomoto and his co-conspirators instructed subordinates at their respective companies to communicate with co-conspirators at other companies in order to allocate sales of, rig bids for and fix the prices of automotive body sealing products; were aware that employees under their supervision were engaging in such communications; and condoned such communications. The indictment further alleged that Kyomoto attended meetings in the United States with co-conspirators during which Kyomoto and the co-conspirators reached agreements regarding sales of automotive body sealing products to Honda and Toyota. The indictment charged Kyomoto with participating in the conspiracy beginning at least as early as September 2003 until at least October 2011. For most of this period, Kyomoto resided in the United States and served as president of an unnamed joint venture with offices in Indiana and Michigan, which manufactured and sold automotive body sealing products.
Today’s guilty plea is the result of an ongoing federal antitrust investigation into price fixing, bid rigging and other anticompetitive conduct in the automotive parts industry, which is being conducted by the Antitrust Division’s criminal enforcement sections and the FBI. A total of 58 individuals and 39 companies have been charged and have agreed to pay more than $2.6 billion in criminal fines. This case was brought by the Antitrust Division’s Chicago Office and the FBI’s Louisville Division, Covington Resident Agency, with the assistance of the FBI’s International Corruption Unit and the U.S. Attorney’s Office of the Eastern District of Kentucky. Anyone with information about anticompetitive conduct in the automotive parts industry should contact the Antitrust Division’s Citizen Complaint Center at 888-647-3258, visit www.justice.gov/atr/contact/newcase.html or call the FBI’s Louisville Division at 502-263-6000.