Price fixing probes wane

U.S. official renews extradition threat

February 15, 2016 12:00 AM

Baer: U.S. still wants fugitives to face charges

TOKYO -- America's top cartel cop reiterated his threat to extradite individuals indicted on charges of auto-parts price fixing who are hiding overseas from U.S. justice.

But lawyers say the massive federal crackdown, which has largely reeled in Japanese suppliers, is winding down as statutes of limitations kick in. Even Bill Baer, head of the Department of Justice's antitrust division, hinted that his focus will increasingly shift to other matters.

That doesn't mean the numerous sales managers and other executives dodging indictments in Japan are safe. Speaking this month at the American Bar Association's International Cartel Workshop here, Baer warned that extradition is still on the table.

"Extradition is an important tool in our enforcement tool kit," Baer said at the conference. "Once we file charges, and that foreign national has not come back to the United States, he or she is considered a fugitive under U.S. law."

Even if the Justice Department doesn't seek extradition, the threat still penalizes indicted individuals. For starters, those from Japan on Interpol's fugitive list are effectively grounded for life there because they can be easily arrested once they leave.

The Justice Department executed its first antitrust extradition in 2014, when it nabbed an Italian traveling through an airport in Germany.

"That remains something that we care about, [that] we will do," Baer said. He noted that in the last two years, 21 foreign nationals returned to face charges, rather than risk extradition.

"If it means serving some prison time in the United States, at least they get their life back," Baer said of indicted individuals deciding to return and answer the charges. "They can travel again. They can seek further employment."

But as reported by Automotive News, people indicted for auto-parts price fixing increasingly opt to stay in their own country rather than risk doing time in a U.S. prison.

Some have even remained with the company that employed them when they were allegedly colluding with other companies to fix prices. In other cases, they left with retirement packages.

No individual has challenged the charges in court. Instead, 30 individuals have agreed to prison time.

Another 31 have yet to enter pleas or are otherwise ignoring their indictments, according to one lawyer who asked not to be named because the tally is related to ongoing casework.

Not targeting Japan

Baer dismissed suggestions that the U.S. Justice Department was singling out Japanese companies and individuals for prosecution.

The Justice Department and antitrust enforcers around the world have been investigating price fixing in auto parts for several years. More than 38 companies have pleaded guilty and 61 executives have been charged. Among those companies and individuals, the vast majority have been Japanese.

But when all individuals charged with any antitrust crimes over the past decade are considered, only 10 percent have been Japanese nationals.

The preponderance of Japanese companies and individuals in the auto-parts cases is about to change as the Justice Department's attention shifts.

"I think you'll see as we bring charges over the next year or two in matters currently under investigation, that it will involve U.S. companies, U.S. citizens, foreign companies, foreign nationals, and it will not be focused on one particular country," Baer said, saying there are more than 100 active cartel investigations, including nonautomotive cases.

He added that if "you watch where we go in the future, it is not fair to suggest that we are targeting any one country."

Past the peak?

Lawyers at the cartel conference said the onslaught of charges against primarily Japanese auto-parts companies is expected to slow. That is partly because the five-year statute of limitations is beginning to kick in from the last act of alleged price fixing.

Depending on the part involved, the conspiracies typically ended sometime between 2008 and 2012. Most ended in 2010.

In 2015, only 14 individuals were charged with auto-parts bid rigging, according to one U.S. defense lawyer. That compares with 25 people the year before.

Likewise, only seven companies were charged in 2015, compared with nine in 2014 and 14 the year before that.

No charges have been brought so far in 2016.

There is also ebb and flow in criminal charges as one group of antitrust cases rises and another fades, experts say. And even though criminal charges may be slowing, civil complaints by consumers and customers seeking damages remain.