Ready-Mix Concrete Company And Individuals Indicted For Fixing Prices And Rigging Bids In Violation Of Antitrust Laws
A federal grand jury returned an indictment against one company and four individuals for their roles in a long-running conspiracy to fix prices, rig bids, and allocate markets for ready-mix concrete in the greater Savannah, Georgia area, the Department of Justice announced today.
The indictment, returned in the U.S. District Court in Savannah, charges Evans Concrete, LLC; James Clayton Pedrick; Gregory Hall Melton; John “David” Melton; and Timothy “Bo” Strickland with conspiring to fix prices, rig bids, and allocate markets for the sale of ready-mix concrete used in residential, commercial, and public projects. Pedrick is also charged with making false statements, and Strickland is charged with making false statements and perjury.
“The charges continue the division’s efforts to prosecute those who cheat the American consumer by driving up prices of the building blocks of commercial enterprise in the United States,” said Assistant Attorney General Makan Delrahim of the Department of Justice’s Antitrust Division. “With support from our law enforcement partners, the Antitrust Division will hold accountable anyone who cheats the system by depriving customers of competitive pricing, as well as individuals who lie to investigating agents.”
“Activities related to illegal price-fixing, bid rigging, and market allocation do not promote an environment conducive to open competition. When this occurs, the consumer is not guaranteed the best products at the lowest prices,” said Acting Special Agent in Charge Steven Stuller, U.S. Postal Service Office of Inspector General. “The U.S. Postal Service spends hundreds of millions of dollars on new construction, maintenance, and renovation of U.S. Postal Service facilities that require concrete and other construction materials. Along with the Department of Justice and our federal law enforcement partners, the USPS Office of Inspector General will aggressively investigate those who would engage in this type of harmful conduct.”
“The charges illustrate the FBI’s dedication and ongoing efforts with our partners to ensure that U.S. markets remain free and open,” said Acting Assistant Director in Charge, James A. Dawson, FBI Washington Field Office. “The company and individuals charged all had an alleged role in a long-running conspiracy to fix prices and rig bids. The FBI will continue to investigate those who try to cheat the system and profit at the expense of consumers.”
“The stability of our free market depends on fair play from competitors, and when competing companies collude and conspire to illegally enhance their profits, consumers and taxpayers are penalized with higher prices,” said U.S. Attorney Bobby L. Christine for the Southern District of Georgia. “We applaud the actions of our law enforcement partners and the Department of Justice in helping to provide a level playing field for commerce in our district.”
Ready-mix concrete is a product comprised of ingredients including cement, aggregate (sand and gravel), water, and, at times, other additives. It is made on demand and, if necessary, delivered to work sites by concrete mixer trucks. Ready-mix concrete is purchased by do-it-yourself and commercial customers, as well as local, state, and federal governments, for use in various construction projects, including, but not limited to, sidewalks, driveways, bridges, tunnels, and roads.
According to the indictment, from as early as 2010 until approximately July 2016, the charged individuals, on behalf of their companies, participated in a conspiracy to fix prices, rig bids, and allocate markets for sales of ready-mix concrete. The conspirators submitted rigged bids and accepted payments for ready-mix concrete sold through contracts and on projects that were affected by the alleged conspiracy. In order to carry out the conspiracy, the conspirators used Pedrick as a conduit to exchange price-increase letters and other competitive information between the defendants and other co-conspirators for the purpose of coordinating price increases, rigging bids, and allocating jobs.
Timothy “Bo” Strickland was, at different times, owner, president, area manager, plant manager, and a salesperson for Evans. Gregory Melton was division manager of ready-mix concrete sales, and James Clayton Pedrick was a cement salesman, for a co-conspirator company. John David Melton was the general manager for another co-conspirator company. All of the defendants worked in the Savannah area.
An indictment merely alleges that crimes have been committed, and all defendants are presumed innocent until proven guilty beyond a reasonable doubt.
A violation of the Sherman Act carries a maximum penalty of 10 years in prison and a $1 million fine for individuals and a $100 million fine for corporations. The maximum fine for a Sherman Act charge may be increased to twice the gain derived from the crime or twice the loss suffered by the victims of the crime if either amount is greater than the statutory maximum fine. The offenses of making false statements and perjury each carries a maximum penalty of 5 years in prison and a $250,000 fine.
The charges stem from an ongoing investigation by the Antitrust Division’s Washington Criminal II Section, the United States Postal Service Office of Inspector General, and the FBI’s Washington Field Office, with the assistance of the U.S. Attorney’s Office in Savannah, Georgia, and the Department of Transportation Office of the Inspector General. Anyone with information concerning price fixing, bid rigging, or other anticompetitive conduct should contact the Antitrust Division’s Citizen Complaint Center at 1-888-647-3258 or visit www.justice.gov/atr/contact/newcase.html.