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Economy

Price-fixing trio to serve jail term in UK

Thursday, 13 December 2007

Three UK businessmen have pleaded guilty to price-fixing in the US and will be extradited to serve their jail sentence in a British prison.

The three men, an independent consultant and two executives of Dunlop Oil & Marine Ltd, a manufacturer of marine hose located in Grimsby, pleaded guilty and have agreed to serve record-setting prison sentences.

The trio participated in a conspiracy to rig bids, fix prices, and allocate market shares of marine hose sold in the United States, the US Department of Justice announced.

The US Antitrust Division filed a one-count felony charge on 3 December 2007 against Peter Whittle, sole proprietor of a consulting business named PW Consulting (Oil & Marine), Bryan Allison, managing director of Dunlop Oil & Marine Ltd., and David Brammar, Dunlop’s sales and marketing director.

Record-setting jail sentences

Under the terms of their plea agreements, Whittle has agreed to serve 30 months in jail, Allison has agreed to serve 24 months in jail and Brammar has agreed to serve 20 months in jail.

The Antitrust Division said that these are the longest prison sentences that foreign national defendants charged with antitrust offences have agreed to serve in its history.

As part of their plea agreements, Whittle and Allison have each agreed to pay a $100,000 fine, and Brammar has agreed to pay a $75,000 fine.

Under the terms of the plea agreements the defendants will plead guilty to the charges in the United States, then be escorted in custody back to the UK to allow them to co-operate with the Office of Fair Trading’s (OFT) investigation of violations of the UK’s Enterprise Act of 2002 and to allow them to plead guilty to violating the Enterprise Act.

Thomas O. Barnett, Assistant Attorney General in charge of the Department’s Antitrust Division, said that the investigation has not only netted record-setting jail sentences but has involved unprecedented co-ordination with the United Kingdom.

“The United Kingdom’s Enterprise Act, which provides for criminal sanctions for individuals who engage in cartel offences, is an important new weapon in the fight against international cartels. The fact that other governments are now prosecuting cartels criminally, using jail time as a deterrent, shows that the stakes are rising for antitrust violators,” Barnett added.

Marine hose cartel

Marine hose is a flexible rubber hose used to transfer oil between tankers and storage facilities. During the conspiracy, hundreds of millions of dollars worth of marine hose and related products were affected by the cartel worldwide.

The victims of this conspiracy include companies involved in the off-shore extraction and/or transportation of petroleum products and the US Department of Defence.

“The lengthy prison sentences that these defendants have agreed to serve reflect our long-held belief that jail is the most effective deterrent for antitrust defendants,” said Scott Hammond, Deputy Assistant Attorney General for Criminal Enforcement of the Department’s Antitrust Division.

Eight foreign executives, including Whittle, Allison and Brammar, were arrested on 2 May 2007 in Houston and San Francisco and charged for their roles in the marine hose cartel, following their participation in a cartel meeting in Houston.

Francesco Scaglia and Val M. Northcutt, executives with Manuli Rubber Industries SpA, were indicted in September 2007 in US District Court in Fort Lauderdale for their roles in the conspiracy. The case has been put on the court’s May 2008 trial docket.

Violation of the Sherman Act

In November 2007, Christian Caleca and Jacques Cognard, executives with Trelleborg Industrie S.A.S., pleaded guilty to charges stemming from their roles in the conspiracy and have agreed to recommended prison sentences of 14 months each.

Two other foreign executives were arrested and charged in May 2007, Vanni Scodeggio, a business unit manager at Parker ITR srl in Italy, and Misao Hioki, an executive involved in the sale of marine hose for Bridgestone Corporation in Japan.

Whittle, Allison and Brammar are each charged with a violation of the Sherman Act, which carries a maximum sentence of ten years imprisonment and a fine of $1 million 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.

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