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Monday, 09 May 2016 20:31

Former President of Auto Parts Company Pleads Guilty to Price Fixing

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 on April 20 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 will pay a $20,000 criminal fine and serve 18 months in a U.S. prison.

“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.

The April 20 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. 

Second Company to Plead Guilty in Ongoing Investigation

Photo: Hitachi Chemical

 

Hitachi Chemical Co. Ltd. will plead guilty for conspiring with competitors between 2002 and 2010 to fix prices for electrolytic capacitors sold to customers in the United States and elsewhere, the Department of Justice announced April 27.

“Hitachi Chemical subsidiaries and co-conspirators fixed the prices of capacitors, a fundamental component of widely used electronic products,” said Deputy Assistant Attorney General Brent Snyder.  “This is the second guilty plea in this investigation, and we will continue to pursue companies and individuals that conspire to undermine competition for technology components of all shapes and sizes.”

“We will not tolerate the behavior of companies or individuals who attempt to profit unfairly from business practices that ultimately hurt our economy and the consumer,” said Acting Special Agent in Charge Bertram Fairries of the FBI’s San Francisco Division.  “We will pursue and bring to justice those who commit these types of crimes.”

Electrolytic capacitors store and regulate electrical current in a variety of electronic products, including computers, televisions, car engine and airbag systems, home appliances and office equipment.

The one-count felony charge was filed on April 27 in the U.S. District Court of the Northern District of California in San Francisco.  In addition to pleading guilty to that charge and paying a criminal fine, Tokyo-based Hitachi Chemical has agreed to cooperate in the department’s ongoing investigation.  The plea agreement is subject to court approval.

On Jan. 21, 2016, NEC TOKIN Corp. pleaded guilty to participating in the same worldwide conspiracy from 2002 to 2013 and was sentenced to pay a fine of $13.8 million.  On March 12, 2015, a grand jury indicted Takuro Isawa, a former Global Sales General Manager for one of the capacitor manufacturers, for his participation in the conspiracy.  

The charge on April 27 results from a federal antitrust investigation being conducted by the Antitrust Division’s San Francisco Office and the FBI’s San Francisco Field Office into price fixing, bid rigging and other anticompetitive conduct in the capacitor industry.  

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