On June 30, 2008, the Federal Trade Commission (“FTC”), in a 4-0 vote, issued a complaint against the proposed acquisition of INEOS Group Limited (“INEOS”) by Carlyle Partners IV (“Carlyle”). INEOS is the third largest sodium silicate producer and seller in the highly concentrated Midwest region of the United States. PQ Corporation (“PQ”), owned by Carlyle Partners IV, is the largest sodium silicate producer. According to the FTC, the proposed transaction is anticompetitive and in violation of antitrust laws. In the complaint, the FTC contends that PQ has 50 percent of the sodium silicate market while INEOS has 12 percent. Because there is not a close substitute of sodium silicate, which has high transportation costs, other products will not constrain pricing.
On June 30, 2008, Joel M. Gostomelsky, the director of the Hines, IL Department of Veteran Affairs (“VA”) Consolidated Mail Outpatient Pharmacy (“CMOP”) pled guilty to one count of conspiring to allow a subordinate to participate in decisions directly affecting the financial interests of the subordinate's spouse and one count of accepting illegal gratuities.
MAJOR INTERNATIONAL AIRLINES PLEAD GUILTY AND AGREE TO PAY FINES FOR THEIR ROLE IN MAJOR CONSPIRACY TO FIX AIR CARGO RATES
On June 26, 2008, five major international airlines including Socit Air France (Air France), Cathay Pacific Airways Limited (Cathay), Koninklijke Luchtvaart Maatschappij N.V. (KLM Royal Dutch Airlines), Martinair Holland N.V. (Martinair), and SAS Cargo Group A/S (SAS) pled guilty and agreed to pay fines for their role in a major international conspiracy to fix prices for cargo shipments to and from the United States.
U.S. ARMY OFFICER AND WIFE PLEAD GUILTY TO CHARGES OF CONSPIRACY TO COMMIT BRIBERY AND MONEY LAUNDERING INVOLVING DOD CONTRACTS AT U.S. BASE IN KUWAIT
On June 24, 2008, John Cockerham, a U.S. Army office, and his wife, Melissa Cockerham, of San Antonio pled guilty to charges of conspiracies to commit bribery and money laundering. Mr. Cockerham pled guilty to one count of conspiracy to commit bribery and one count of money laundering. Mrs. Cockerham pled guilty to one count of money laundering.
NEW YORK CITY EMPLOYEE PLEADS GUILTY FOR HIS ROLE IN A CONSPIRACY TO COMMIT BRIBERY ON NEW YORK PIER 86 PROJECT
On June 20, 2008, Charles N. Kriss, a former New York City Department of Citywide Administrative Services engineer, pled guilty to conspire to commit bribery in connection with a repair project to reconstruct Pier 86 where the Intrepid Sea, Air, and Space Museum is located. Mr. Kriss agreed to serve a sentence and pay a fine (yet to be determined) and cooperate with the ongoing investigation.
CALIFORNIA ELECTRIC COMPANY PLEADS GUILTY FOR ITS ROLE IN RIGGING BIDS ON FCC E-RATE PROJECTS FOR FRESNO AREA SCHOOLS
On June 18, 2008, Howe Electric Inc., a California-based electrical contractor, pled guilty and agreed to pay a fine of $3.3 million for rigging bids on Federal Communications Commission’s (“FCC”) E-Rate Program (“E-Rate”) projects in two Fresno, CA schools. The company will pay a total of $300,000 in criminal fines and $3 million in restitution.
On June 17, 2003, Home City Ice Company pled guilty to conspiracy in allocating packaged-ice customers and territories among its co-conspirators. The DOJ alleged that Home City along with its co-conspirators suppressed competition by allocating customers and territories in the Detroit Metropolitan area and southeastern Michigan amongst themselves. This conspiracy took place between January 2001 and July 2007.
On June 13, 2008, Frank Granizo, a former president of a licensed freight forwarding company based in Florida, pled guilty to wire fraud related to paying kickbacks to an unnamed executive at an unnamed manufacturing company. Mr. Granizo also agreed to help the Department of Justice (“DOJ”) in its ongoing investigation.
On June 12, 2008, James P. Robinson of Atlanta, GA was charged with two counts of income tax evasion and one count of conspiracy to commit wire fraud in a kickback scheme against Home Depot. After appearing in court, the presiding judge granted Mr. Robinson a $10,000 bond. Allegedly, Mr. Robinson took kickbacks from foreign vendors who were interested in doing business with Home Depot. Also, he evaded taxes for the years 2005 and 2006 in the hundreds of thousands of dollars.
THREE EXECUTIVES SENTENCED IN UK’S FIRST OFFICE OF FAIR TRADE’S CRIMINAL PROSECUTION FOR BID RIGGING
On June 11, 2008, Peter Whittle, David Brammar and Bryan Allison pled guilty for running a cartel in UK’s first criminal prosecution for bid rigging. Mr. Allison and Mr. Whittle were both sentenced to three years in prison while Mr. Brammar received a two and a half year sentence. Mr. Allison also had to pay a fine of £25,000.
On June 10, 2008 the Department of Justice (“DOJ”) along with the State of Vermont entered into a settlement agreement that would allay their concerns that Verizon Communication Corp.’s (“Verizon”) acquisition of Rural Cellular Corp. (“RCC”) for $2.7 billion as proposed is anticompetitive. To resolve antitrust concerns, the DOJ required Verzion to divest assets in six different geographic locations in Vermont, New York and Washington. Verizon and RCC provide service to approximately 60 percent of the consumers in those areas. The Department said that the transaction as originally proposed would have substantially lessened competition to the detriment of consumers of mobile wireless telecommunications services in those areas, potentially resulting in higher prices, lower quality and reduced network investments.
On June 10, 2005, Levonda J. Selph, a retired colonel in the U.S. Army, pled guilty to charges of conspiracy and bribery for her role in influencing Department of Defense (“DOD”) contracts at Camp Victory, Iraq in 2004 and 2005. In addition to pleading guilty, Lieutenant Colonel Selph agreed to serve a term of imprisonment and pay the DOD a restitution fee of $9,000.
On June 5, 2008, Charles N. Kriss, a former New York City Department of Citywide Administrative Services engineer, was indicted for his role in a conspiracy to commit bribery by a federal grand jury in the U.S. District Court in Inslip, NY. The Department of Justice accused Mr. Kriss of accepting bribes from a co-conspirator company supplying New York City with plastic marine pilings for a project to reconstruct Pier 86 the home of the Intrepid Sea, Air, and Space Museum.
On June 5, 2008, the Department of Justice (“DOJ”) approved a joint venture between SABMiller plc and Molson Coors Brewing Company which combined their operations in the United States and Puerto Rico. While the transaction combined two of three largest U.S. brewers in the United States, the DOJ’s Antitrust Division did not find any evidence that this joint venture would reduce competition.
On June 3, 2008, Raman International Inc. (“Raman”), a defense contractor, pled guilty to one count of conspiracy to commit bribery. It agreed to pay the maximum criminal fine for a corporation charged with conspiracy to commit bribery of $500,000 and restitution fees amounting to $327,192 to the Department of Defense (“DOD”).
On June 2, 2008 Chancellor William B. Chandler III of Delaware decided to unseal the complaint in a case brought by two pension fund shareholder groups against Yahoo and its Board of Directors. The plaintiffs accused the Yahoo Board of Directors, especially CEO Jerry Yang, of violating their fiduciary duties and enacting barriers such as a severance package for employees to thwart an acquisition by Microsoft.