TWO EXECUTIVES INDICTED IN AUTO PARTS PRICE FIXING CASE

FROM:  U.S. JUSTICE DEPARTMENT 
TWO EXECUTIVES INDICTED FOR ROLES IN FIXING PRICES
ON AUTOMOBILE PARTS SOLD TO TOYOTA
TO BE INSTALLED IN U.S. CARS

WASHINGTON — A Cleveland federal grand jury returned an indictment against two executives of a Japanese automotive supplier for their roles in an international conspiracy to fix prices of automotive anti-vibration rubber parts sold to Toyota and installed in U.S. cars, the Department of Justice announced today.

The indictment, filed yesterday in U.S. District Court for the Northern District of Ohio in Toledo, charges Masao Hayashi and Kenya Nonoyama, both Japanese nationals, with participating in a conspiracy to suppress and eliminate competition in the automotive parts industry by agreeing to allocate the supply of, to rig bids for and to fix, raise and maintain the prices of anti-vibration rubber parts sold to Toyota Motor Corp., Toyota Motor Engineering & Manufacturing North America Inc. and affiliated companies (collectively Toyota) for installation in automobiles manufactured and sold in the United States and elsewhere.

Automotive anti-vibration rubber products are comprised primarily of rubber and metal, and include engine mounts and suspension bushings.  They are installed in automobiles for the purpose of reducing road and engine vibration.

The indictment alleges, among other things, that from as early as March 1996 until at least December 2008, Hayashi and Nonoyama and their co-conspirators conducted meetings and communications in Japan to reach collusive agreements.  The indictment alleges that the conspiracy involved agreements affecting the Toyota Corolla, Avalon, Tacoma, Camry, Tundra, Sequoia, Rav4, Sienna, Venza and Highlander.

“Today’s indictment reaffirms the Antitrust Division’s commitment to hold executives accountable for actions that corrupt the competitive landscape and harm consumers,” said Renata B. Hesse, Deputy Assistant Attorney General for the Department of Justice’s Antitrust Division.  “The Antitrust Division continues to work closely with its fellow competition enforcers abroad to ensure that there are no safe harbors for executives who engage in international cartel crimes.”

Hayashi and Nonoyama are charged with a violation of the Sherman Act, which carries a maximum penalty of 10 years in prison and a $1 million criminal fine for individuals.  The maximum fine may be increased to twice the gain derived from the crime or twice the loss suffered by the victims of the crime, if either of those amounts is greater than the statutory maximum fine.

Including Hayashi and Nonoyama, 21 companies and 26 executives have been charged in the Justice Department’s ongoing investigation into the automotive parts industry.  To date, more than $1.6 billion in criminal fines have been obtained and seventeen of the charged executives have been sentenced to serve time in U.S. prisons or have entered into plea agreements calling for significant prison sentences.

The charges are 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 each of the Antitrust Division’s criminal enforcement sections and the FBI.  Today’s charges were brought by the Antitrust Division’s Chicago Office and the FBI’s Cleveland Field Office, with the assistance of the FBI headquarters’ International Corruption Unit and the U.S. Attorney’s Office for the Northern District of Ohio.