The Antitrust Division continues to send a strong message to businesses, executives, and individuals engaged in potential bid rigging and price fixing schemes. Recent investigations of the ready mixed concrete industry, glyphosate industry, and roofing products industry have resulted in guilty pleas and indictments. The recent activity indicates that the Antitrust Division continues to make criminal enforcement a priority.
Ready Mixed Concrete Investigation
On June 29, the DOJ announced that Irving Materials Inc., a ready mixed concrete producer in Greenfield, Indiana, pleaded guilty and was sentenced to pay a $29.2 million criminal fine for fixing the price of ready mixed concrete in the Indianapolis, Indiana metropolitan area. The fine is the largest ever in a domestic antitrust investigation. Additionally, four executives have agreed to plead guilty, pay criminal fines, and serve time in prison for their roles in the same conspiracy. All of the executives have agreed to assist the government in its ongoing investigation.
Irving Materials Inc., Daniel C. Butler, John Huggins, Fred R. “Pete” Irving, and Price Irving were charged with conspiring with their competitors to fix the price of ready mixed concrete sold in the Indianapolis metropolitan area from approximately July 2000 until May 2004. One of the executives, Pete Irving, has agreed to pay a $200,000 fine and the other three executives have agreed to pay $100,000 fines each for their role in the conspiracy. The four executives charged have also agreed to serve five months in prison, followed by five months of home detention.
The charges resulted from the Antitrust Division’s ongoing investigation of the ready mixed concrete industry being conducted by its Chicago Field Office in conjunction with the Indianapolis office of the FBI.
On June 23, the DOJ announced that Patrick J. Crowe III, a former salesman for Chemical Products Technologies, LLC (“CPT”), a Georgia-based chemical manufacturer, agreed to plead guilty to participating in two conspiracies to defraud his former employer. While employed as a salesman by CPT, Mr. Crowe allegedly received kickback payments from the owner and operator of an independent Tennessee trucking company in exchange for ensuring that the trucking company received business from CPT. In addition to the kickback payments, Mr. Crowe allegedly diverted profits from CPT and used the money for his own personal benefit.
From approximately July 2000 to October 2003, Mr. Crowe and his co-conspirators allegedly participated in a kickback scheme involving the hauling of anthraquinone, a pulping additive used to increase production in the pulp and paper industry. Kickback payments were allegedly made to Mr. Crowe’s shell corporation at an agreed-upon rate for each load of anthraquinone hauled for CPT. In order to facilitate this scheme, Mr. Crowe and his co-conspirators mailed and/or caused to be mailed inflated invoices, kickback checks, and other documents pertaining to the fraudulent scheme.
According to the second conspiracy charge, from April 2002 to December 2002, Mr. Crowe and his co-conspirators misled CPT to believe that CDFD Inc., a Wyoming corporation owned by Mr. Crowe, was an escrow agent with no ownership connection to Mr. Crowe or anyone else employed by CPT. CPT was also led to believe by Mr. Crowe and his co-conspirators that funds generated by CPT’s glyphosate business and placed in a CDFD Inc. business account would be used to pay CPT’s suppliers. Glyphosate is a herbicide used to control grasses and weeds. Mr. Crowe and his co-conspirators then allegedly diverted funds from the CDFD Inc. business account for their own personal use.
Mr. Crowe is charged with conspiracy, a violation of 18 U.S.C. Section 371, which carries a maximum term of imprisonment of five years and a maximum fine of $250,000 for an individual for each count. The charges are the first to arise out of an ongoing investigation in the Northern District of Georgia being conducted by the Antitrust Division’s Atlanta Field Office. The Antitrust Division is investigating possible price fixing, bid rigging or kickback schemes in the anthraquinone or glyphosate industries.
Roofing Products Investigation
On June 7, Paul Sleasman, pleaded guilty to rigging bids and conspiring to commit mail fraud. His guilty plea is the fourth obtained in the government’s ongoing investigation of the roofing industry in the Albany area.
According to the charge, Mr. Sleasman participated in a conspiracy to rig bids for, and allocate roofing contracts awarded by, the General Electric Company’s Waterford, New York facility, the Albany Medical Center, and other purchasers of roofing products and services in the State of New York, from sometime in 1995 until June 2002.
Mr. Sleasman and co-conspirators are charged with carrying out the conspiracy by: discussing the submission of prospective bids on certain roofing contracts; agreeing among themselves which company would be the low bidder; and arranging for co-conspirators to submit bids that were intentionally higher.
With the guilty plea of Mr. Sleasman, the Division has now obtained four guilty pleas relating to its investigation of the roofing industry in the Albany area. In April of 2005, Sean Moran pleaded guilty to rigging bids. In June 2004, Waterblock Roofing and Sheetmetal Inc. and its president, Walter J. Vivenzio, pleaded guilty to bid rigging and fraud charges. Mr. Sleasman, Moran, and Mr. Vivenzio have agreed to cooperate with the Antitrust Division’s ongoing investigation of the alleged bid rigging and allocation of contract activity for roofing products and services in the Albany, New York area.