CORNING INTERNATIONAL K.K. WILL PAY $66.5 MILLION FOR PRICE FIXING

FROM:  U.S. JUSTICE DEPARTMENT 

Monday, May 16, 2016

Corning International Kabushiki Kaisha to Pay $66.5 Million for Fixing Prices of Automotive Parts

Corning International Kabushiki Kaisha (Corning International K.K.) has agreed to plead guilty and pay a $66.5 million criminal fine for conspiring to fix prices, rig bids and allocate the market for ceramic substrates sold in the United States and elsewhere, and used in catalytic converters supplied to automobile manufacturers in the United States and elsewhere, the Justice Department announced today.

According to the felony charge filed today in U.S. District Court for the Eastern District of Michigan, Corning International K.K., based in Tokyo, conspired to fix prices, rig bids and allocate the market for ceramic substrates, from at least as early as July 1999 until on or about July 2011.  The products were installed in automotive emissions control systems and supplied to automobile manufacturers including Ford Motor Company, General Motors LLC, Honda Motor Company Ltd., and certain of their subsidiaries, affiliates, and suppliers in the United States and elsewhere.  Corning International K.K. agreed to cooperate in the department’s ongoing investigation.  The plea agreement will be subject to court approval.

“Corning International K.K. – and Nobuhiko Niwa, its former executive, who was indicted last week – spent more than a decade colluding on sales of an important component of emissions systems for use in cars made and sold in the United States and elsewhere,” said Deputy Assistant Attorney General Brent Snyder of the Justice Department’s Antitrust Division.  “But they have now been held accountable for the competitive harm they caused.”

“Corning International K.K.'s conspiracy to rig bids and fix prices brought the company increased revenues at a cost to auto manufacturers, suppliers, and ultimately, consumers,” said Special Agent in Charge David P. Gelios of the FBI’s Detroit Division.  “Attempts to thwart the free market system are damaging to our economy, and thereby its consumers, and will be actively investigated and prosecuted.”

Including Corning International K.K., 40 companies have been charged in connection with this investigation and have agreed to pay more than $2.7 billion in criminal fines.  In addition, 59 individuals have been charged, including a former executive of Corning International K.K.  On May 11, 2016, a federal grand jury in the Eastern District of Michigan returned an indictment against Nobuhiko Niwa, a Japanese national, for his role in the conspiracy.  Niwa was charged with participating in the conspiracy from at least as early as July 1999 until on or about July 2011.

This charge results from an ongoing investigation conducted by the Antitrust Division’s Washington Criminal I Section and the FBI’s Detroit Division with the assistance of the FBI Headquarters’ International Corruption Unit.

KOREAN COMPANY AGREES TO PLEAD GUILTY AND PAY $4 MILLION IN BID RIGGING CASE

FROM:  U.S. JUSTICE DEPARTMENT 

Monday, November 24, 2014

Continental Automotive Electronics and Continental Automotive Korea Agree to Plead Guilty to Bid Rigging on Instrument Panel Clusters

Continental Automotive Electronics LLC and Continental Automotive Korea Ltd. both have agreed to plead guilty and to pay a single criminal fine of $4 million for their roles in a conspiracy to rig bids of instrument panel clusters installed in vehicles manufactured and sold in the United States, the Department of Justice announced today.

According to a one-count felony charge filed today in U.S. District Court for the Northern District of Georgia, Newnan Division, Continental Automotive Electronics LLC, based in Cheongwon, South Korea, and Continental Automotive Korea Ltd., based in Seongnam-si, South Korea, conspired to rig bids for instrument panel clusters sold to Hyundai Motor Co., Kia Motors Corp. and Kia Motors Manufacturing Georgia in the United States and elsewhere.  In addition to the criminal fine, the companies have agreed to cooperate in the department’s ongoing investigation.  The plea agreement is subject to court approval.

“As the Antitrust Division’s prosecution of auto parts matters like this one demonstrates, we will prosecute those who participate in international cartels targeting U.S. businesses and consumers,” said Brent Snyder, Deputy Assistant Attorney General for the Antitrust Division’s criminal enforcement program.  “The Antitrust Division is working closely with competition enforcers around the world to ensure that companies and executives that engage in international cartel crimes find no refuge.”

The charged companies have acknowledged that they and their co-conspirators held meetings and conversations to discuss and agree upon allocation of sales of instrument panel clusters, and the bids and price quotations each would submit.  The charged companies’ involvement in the conspiracy began as early as March 2004 and continued until May 2012.

Instrument panel clusters are a set of instruments located on the dashboard of a vehicle that contain gauges such as a speedometer, tachometer, odometer, and fuel gauge, as well as warning indicators for gearshift position, seat belt, parking-brake engagement, engine malfunction, low fuel, low oil pressure and low tire pressure.

Including Continental Automotive Electronics LLC and Continental Automotive Korea Ltd., 32 companies and 46 executives have been charged in the Justice Department’s ongoing investigation into the automotive parts industry.  Each of the charged companies have either pleaded guilty or have agreed to plead guilty and have agreed to pay more than $2.4 billion in criminal fines.  Of the 46 individuals, 26 have been sentenced to serve time in U.S. prisons.

Continental Automotive Electronics LLC and Continental Automotive Korea Ltd. are charged with bid rigging in violation of the Sherman Act, which carries maximum penalties of a $100 million criminal fine for corporations.  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.

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 Montgomery, Alabama Field Office, with the assistance of the FBI headquarters’ International Corruption Unit.

HITACHI-LG DATA STORAGE INC. EXECUTIVE AGREES TO PLEAD GUILTY FOR PARTICIPATING IN BID-RIGGING CONSPIRACIES INVOLVING OPTICAL DISK DRIVES

FROM:  U.S DEPARTMENT OF JUSTICE ANTITRUST DIVISION
Korean Executive Agrees to Serve Time in U.S. Prison
WASHINGTON — An executive of Korean-based Hitachi-LG Data Storage Inc. (HLDS) has agreed to plead guilty and to serve time in a U.S. prison for his participation in a series of conspiracies to rig bids for the sale of optical disk drives, the Department of Justice announced today.

According to the four-count felony charge filed today in the U.S. District Court for the Northern District of California in San Francisco, Senior Sales Manager Woo Jin Yang, also known as Eugene Yang, conspired with others to suppress and eliminate competition by rigging bids for optical disk drives sold to Hewlett-Packard Co. (HP). Yang participated in the conspiracies at various times between approximately August 2006 and June 2009. Under the plea agreement, which is subject to court approval, Yang has agreed to serve six months in prison, to pay a $25,000 criminal fine and to cooperate with the department’s ongoing investigation. HLDS is a joint venture between Hitachi Ltd, a Japanese corporation, and LG Electronics Inc., a Republic of Korea corporation.

“Today’s charges demonstrate the Antitrust Division’s commitment to prosecute and deter conduct that harms American businesses and consumers,” said Acting Assistant Attorney General Joseph Wayland in charge of the Department of Justice’s Antitrust Division. “The division will continue to pursue those who participated in these bid-rigging and price-fixing conspiracies so they are held accountable for their actions.”

Optical disk drives are devices such as CD-ROMs, CD-RWs (ReWritable), DVD-ROMs and DVD-RWs (ReWritable) that use laser light or electromagnetic waves to read and/or write data and are often incorporated into personal computers and gaming consoles.

According to the charges, from approximately August 2006 until February 2009, HP hosted optical disk drive procurement events in which participants would be awarded varying amounts of optical disk drive supply depending on where their pricing ranked. According to court documents, Yang and co-conspirators participated in a series of conspiracies involving meetings and discussions to predetermine bidding strategies and prices of optical disk drives, resulting in the submission of collusive and noncompetitive bids for HP’s procurement events. Yang and co-conspirators also exchanged information on sales, market share and the pricing of optical disk drives to monitor and enforce adherence to the agreements.

Including Yang, the department has charged four individuals and one company as a result of its ongoing investigation into the optical disk drive industry. On Nov. 8, 2011, HLDS pleaded guilty in the U.S. District Court for the Northern District of California in San Francisco to 14 counts of violating the federal antitrust laws between approximately June 2004 and September 2009. HLDS also pleaded guilty to one count of participating in a scheme to defraud in connection with an April 2009 procurement event. On the same day, HLDS was sentenced to pay a $21.1 million criminal fine and agreed to assist the department in its ongoing investigation into the optical disk drive industry.

HLDS executives Y.K. Park, S.H. Kim and Sik Hur pleaded guilty to multiple violations of the Sherman Act on March 27, 2012, April 17, 2012 and April 10, 2012 respectively. Park, Kim and Hur are currently awaiting sentencing.

Yang is charged with violating the Sherman Act. Each count carries a maximum fine of $1 million and up to 10 years in prison. 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.

BIG, BIG BANK AND THE RIGGED BID

The following excerpt is from the SEC website:
“Washington, D.C., Dec. 8, 2011
The SEC alleges that Wachovia generated millions of dollars in illicit gains during an eight-year period when it fraudulently rigged at least 58 municipal bond reinvestment transactions in 25 states and Puerto Rico. Wachovia won some bids through a practice known as “last looks” in which it obtained information from the bidding agents about competing bids. It also won bids through “set-ups” in which the bidding agent deliberately obtained non-winning bids from other providers in order to rig the field in Wachovia’s favor. Wachovia facilitated some bids rigged for others to win by deliberately submitting non-winning bids.
Wachovia agreed to settle the charges by paying $46 million to the SEC that will be returned to affected municipalities or conduit borrowers. Wachovia also entered into agreements with the Justice Department, Office of the Comptroller of the Currency, Internal Revenue Service, and 26 state attorneys general that include the payment of an additional $102 million. The settlements arise out of long-standing parallel investigations into widespread corruption in the municipal securities reinvestment industry in which 18 individuals have been criminally charged by the Justice Department’s Antitrust Division.
“Wachovia won bids by playing an elaborate game of ‘you scratch my back and I’ll scratch yours,’ rather than engaging in legitimate competition to win municipalities’ business.” said Robert Khuzami, Director of the SEC’s Division of Enforcement.
Elaine C. Greenberg, Chief of the SEC’s Municipal Securities and Public Pensions Unit, added, “Wachovia hid its fraudulent practices from municipalities by affirmatively assuring them that they had not engaged in any manipulative conduct. This settlement will result in significant payments to municipalities harmed by Wachovia’s unlawful actions.”
Wachovia Bank is now Wells Fargo Bank following a merger in March 2010.
When municipal securities are sold to investors, portions of the proceeds often are not spent immediately by municipalities but rather temporarily invested in municipal reinvestment products until the money is used for the intended purposes. These products are typically financial instruments tailored to meet municipalities’ specific collateral and spend-down needs, such as guaranteed investment contracts (GICs), repurchase agreements (repos), and forward purchase agreements (FPAs). The proceeds of tax-exempt municipal securities generally must be invested at fair market value, and the most common way of establishing that is through a competitive bidding process in which bidding agents search for the appropriate investment vehicle for a municipality.
According to the SEC’s complaint filed in U.S. District Court for the District of New Jersey, Wachovia engaged in fraudulent bidding of GICs, repos, and FPAs from at least 1997 to 2005. Wachovia’s fraudulent practices and misrepresentations not only undermined the competitive bidding process, but negatively affected the prices that municipalities paid for reinvestment products. Wachovia deprived certain municipalities from a conclusive presumption that the reinvestment instruments had been purchased at fair market value, and jeopardized the tax-exempt status of billions of dollars in municipal securities because the supposed competitive bidding process that establishes the fair market value of the investment was corrupted.
Without admitting or denying the allegations in the SEC’s complaint, Wachovia has consented to the entry of a final judgment enjoining it from future violations of Section 17(a) of the Securities Act of 1933 and has agreed to pay a penalty of $25 million and disgorgement of $13,802,984 with prejudgment interest of $7,275,607. The settlement is subject to court approval.
Financial institutions have now paid a total of $673 million in settlements resulting from the ongoing investigations into corruption in the municipal reinvestment industry. Others charged prior to Wachovia are:– The Securities and Exchange Commission today charged Wachovia Bank N.A. with fraudulently engaging in secret arrangements with bidding agents to improperly win business from municipalities and guarantee itself profits in the reinvestment of municipal bond proceeds.


Banc of America Securities LLC – $137 million settlement with SEC and other federal and state authorities on Dec. 7, 2010. UBS Financial Services Inc. – $160 million settlement with SEC and other federal and state authorities on May 4, 2011. J.P. Morgan Securities LLC – $228 million settlement with SEC and other federal and state authorities on July 7, 2011. In a related action to the Banc of America matter, the SEC today charged the firm’s former vice president and marketer Dean Pinard for his role in various improper bidding practices. Pinard is the beneficiary of a grant of conditional amnesty from criminal prosecution by the Department of Justice provided to Banc of America’s parent corporation. Pinard, who cooperated with the investigation, agreed to pay more than $40,000 to settle the SEC’s case without admitting or denying the findings. He is barred from association with any broker, dealer, investment adviser, municipal securities dealer, or municipal advisor.
The SEC’s investigation, which is continuing, has been conducted by Deputy Chief Mark R. Zehner and Assistant Municipal Securities Counsel Denise D. Colliers, who are members of the Municipal Securities and Public Pensions Unit in the Philadelphia Regional Office. The SEC thanks the other agencies with which it has coordinated this enforcement action, including the Antitrust Division of the U.S. Department of Justice, Federal Bureau of Investigation, Internal Revenue Service, Office of the Comptroller of the Currency, and 26 State Attorneys General.”

DOJ SAYS HITACHI-LG DATA STORAGE INC. AGREES TO PAY $21.1 MILLION IN FINES FOR BID RIGGING

The following is an excerpt from the Department of Justice website:
“WASHINGTON — Hitachi-LG Data Storage Inc. has agreed to plead guilty and to pay a $21.1 million criminal fine for its participation in a series of conspiracies to rig bids and fix prices for the sale of optical disk drives, the Department of Justice announced today. This is the department’s first charge resulting from its ongoing investigation into the optical disk drive industry.
A 15-count felony charge was filed today in U.S. District Court in San Francisco against Hitachi-LG Data Storage, a joint venture between Hitachi Ltd., a Japanese corporation, and LG Electronics Inc., a Republic of Korea corporation. Of the 14 counts, seven charge Hitachi-LG Data Storage with conspiring with others to suppress and eliminate competition by rigging bids on optical disk drives sold to Dell Inc.; six counts charge Hitachi-LG Data Storage with rigging bids on optical disk drives sold to Hewlett-Packard Company (HP); and one count charges Hitachi-LG Data Storage with conspiring with others to fix the prices of optical disk drives sold to Microsoft Corporation. The final count charges Hitachi-LG Data Storage for its participation in a scheme to defraud HP in an April 2009 optical disk drive procurement event.
“The bid-rigging and price-fixing conspiracies involving optical disk drives undermined competition and innovation in the high tech industry,” said Sharis A. Pozen, Acting Assistant Attorney General in charge of the Department of Justice’s Antitrust Division. “The Antitrust Division is committed to prosecuting those who harm competition in the optical disk drive industry.”
Under the plea agreement, which is subject to court approval, Hitachi-LG Data Storage has agreed to assist the department in its ongoing investigation into the optical disk drive industry.
Optical disk drives are devices such as CD-ROM, CD-RW (ReWritable), DVD-ROM and DVD-RW (ReWritable) that use laser light or electromagnetic waves to read and/or write data and are often incorporated into personal computers and gaming consoles.
According to the court document, Dell hosted optical disk drive procurement events in which bidders would be awarded varying amounts of optical disk drive supply depending on where their pricing ranked. From approximately June 2004 to approximately September 2009, Hitachi-LG Data Storage and co-conspirators participated in a series of conspiracies involving meetings and conversations to discuss bidding strategies and the prices of optical disk drives. As part of the conspiracies, Hitachi-LG Data Storage and co-conspirators bid on optical disk drives at collusive and noncompetitive prices and exchanged information on sales, market share and the pricing of optical disk drives to monitor and enforce adherence to the agreements.
The department said that from approximately June 2007 to approximately March 2008, Hitachi-LG Data Storage and co-conspirators participated in meetings and conversations in Taiwan and the Republic of Korea to discuss and fix the prices of optical disk drives sold to Microsoft. As part of the conspiracy, Hitachi-LG Data Storage and co-conspirators issued price quotations in accordance with the agreements reached and exchanged information on the sales of optical disk drives to monitor and enforce adherence to the agreed-upon prices.
According to the court document, HP also hosted optical disk drive procurement events in which participants would be awarded varying amounts of optical disk drive supply depending on where their pricing ranked. The department said that from approximately November 2005 to approximately March 2009, Hitachi-LG Data Storage and co-conspirators participated in a series of conspiracies involving meetings and discussions to predetermine pricing and rank order, and submitted collusive and noncompetitive bids for the procurement event.
Hitachi-LG Data Storage is also charged with one count of wire fraud for devising a scheme to subvert HP’s competitive bidding process for an April 2009 procurement event. According to the charge, Hitachi-LG Data Storage executed the scheme through interstate communications, including an email sent by one of its employees to co-conspirators in San Jose, Calif., and the Republic of Korea, that contained first round bidding results and non-public, competitively sensitive information relating to the April 2009 event.
Hitachi-LG Data Storage is charged with multiple violations of the Sherman Act and one violation of the wire fraud statute. Sherman Act violations carry a maximum penalty of a $100 million criminal fine. The maximum fine may be increased to twice the gain derived from the crime or twice the loss suffered by the victims, if either of those amounts is greater than the statutory maximum fine. The wire fraud violation carries a maximum penalty of the greatest of a $500,000 fine, twice the gain a person derived from the offense or twice the loss suffered by the victims.”

ACCENTURE LLP PAYS OVER $63 MILLION FOR ALLEGEDLY DEFRAUDING THE U.S. GOVERNMENT

The following is an excerpt from the Department of Justice website:

Monday, September 12, 2011
WASHINGTON – Accenture LLP has agreed to pay the United States $63.675 million to resolve a whistleblower lawsuit, the Justice Department announced today. The lawsuit, filed in the U.S. District Court for the Eastern District of Arkansas, alleges that Accenture submitted or caused to be submitted false claims for payment under numerous contracts with agencies of the United States for information technology services.
Accenture has agreed to resolve allegations that it received kickbacks for its recommendations of hardware and software to the government, fraudulently inflated prices and rigged bids in connection with federal information technology contracts.
“Kickbacks and bid rigging undermine the integrity of the federal procurement process,” said Tony West, Assistant Attorney General for the Justice Department’s Civil Division. “At a time when we're looking for ways to reduce our public spending, it is especially important to ensure that government contractors play by the rules and don’t waste precious taxpayer dollars.”
“We strive each and every day to bring justice to the citizens of the Eastern District of Arkansas,” stated Christopher R. Thyer, U.S. Attorney for the Eastern District of Arkansas. “Fraudulent business practices that steal hard earned and much needed tax dollars from appropriate use will not be tolerated. The United States Attorney’s Office is committed to pursuing these cases to the full extent of the law.”
The lawsuit was initially filed by Norman Rille and Neal Roberts under the qui tam or whistleblower provisions of the federal False Claims Act, which permit private individuals, called “relators” to bring lawsuits on behalf of the United States and receive a portion of the proceeds of a settlement or judgment awarded against a defendant. The portion of the proceeds to be paid in this case has not yet been resolved.
“Companies profiting off the breach of their government contracts will pay,” said Brian D. Miller, General Services Administration Inspector General.
The case was handled by the Department of Justice’s Civil Division and the US Attorney’s Office for the Eastern District of Arkansas, with the assistance of the Defense Criminal Investigative Service and the Offices of Inspector General of the Department of Energy, the Department of Education, Department of Treasury Tax Administration (TIGTA), General Services Administration, Department of State and Transportation Security Administration.”

PRICE FIXING AND BID-RIGGING, AN IOWA COMPANY PLEADS GUILTY

The following is an excerpt from the Department of Justice website:
Wednesday, August 24, 2011
“Iowa Company Pleads Guilty to Participating in Ready-Mix Concrete Price-Fixing and Bid-Rigging Conspiracy
WASHINGTON - An Iowa ready-mix concrete company pleaded guilty today to participating in a price-fixing and bid-rigging conspiracy for the sales of ready-mix concrete, the Department of Justice announced.
According to a one-count felony charge filed on Aug. 15, 2011, in U.S. District Court in Sioux City, Iowa, Great Lakes Concrete Inc., a producer of ready-mix concrete with headquarters in Spencer, Iowa, participated in a conspiracy with another ready-mix concrete company to fix prices and rig bids for ready-mix concrete sold in the northern district of Iowa. The department said the company participated in the conspiracy beginning at least as early as January 2008 and continuing until as late as August 2009.
Ready-mix concrete is a product comprised of cement, aggregate (sand and gravel), water and other additives. The concrete generally is produced in a concrete plant and is transported by concrete-mixer trucks to work sites, where it is used in various types of construction projects, including buildings and roads.
According to court documents, Kent Robert Stewart, the president of Great Lakes Concrete, participated in the conspiracy by engaging in conversations and reaching agreements regarding the conspirators’ price lists and project bids for ready-mix concrete sold in the northern district of Iowa. Great Lakes Concrete then accepted payment for those sales at collusive and noncompetitive prices, the department said. On May 24, 2010, Stewart pleaded guilty in U.S. District Court in Sioux City to participating in a conspiracy to fix prices and rig bids of the sale of ready-mix concrete, and, on Feb. 8, 2011, was sentenced to serve a year and a day in prison and to pay a $83,427.09 criminal fine.
Great Lakes Concrete is charged with violating the Sherman Act, which carries a maximum fine of $100 million for corporations. 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.
Today’s guilty plea arose from an ongoing federal antitrust investigation of the ready-mix concrete industry in Iowa and surrounding states. As a result of the investigation, three individuals have been convicted and sentenced to serve prison time, and, including Great Lakes Concrete, four ready-mix concrete companies have pleaded guilty and are awaiting sentencing.”