Wednesday, July 30, 2008

A Big Week for Plea Bargains

It seems there have been a number of interesting plea bargains recently, and I've compiled a list below describing some of the big ones.

(1) The DOJ announced on Tuesday that two DOD contractors pleaded guilty to various conspiracy charges related to their business of providing fuel supply services.

Paul Wilkinson and Christopher Cartwright, who were scheduled to begin trial today, entered into plea agreements filed in the U.S. District Court in Baltimore.

Wilkinson pleaded guilty to conspiring to defraud the United States, to commit wire fraud, and to steal trade secrets by hiring another individual, Matthew Bittenbender, to steal those trade secrets from his employer, Avcard. Avcard is a division of Kropp Holdings Inc., a Hunt Valley, Md., company which provides fuel and fuel services to commercial and government aircraft. Wilkinson used the inside information to underbid Avcard at every location where the companies were bidding against each other, thereby subverting DOD's competitive bidding procedures.

Cartwright pleaded guilty to conspiring to commit wire fraud by defrauding Avcard of the honest services of its employee, Bittenbender. Bittenbender pleaded guilty in May 2008 for his role in the conspiracy. Avacard ultimately lost each of the contested bids.

(2) The DOJ announced Monday that an Army Lieutenant Colonel pleaded guilty to honest services wire fraud in connection with a scheme to defraud the Coalition Provisional Authority - South Central Region in Al-Hillah, Iraq.
[Debra] Harrison, 50, of Trenton, N.J., entered her guilty plea today before the Honorable Mary L. Cooper at the U.S. District Court for the District of New Jersey, Trenton Division. At the plea hearing, Harrison admitted that in August 2004 she received a Cadillac Escalade from Philip Bloom, a contractor at the CPA-SC. The Escalade was financed through a series of wire transfer payments, which form the basis of the wire fraud charge. Harrison also admitted that she took more than $300,000 from the CPA-SC while deployed there and that she used some of the stolen money to make improvements at her home. Harrison also admitted that in July 2004 she helped to move unregistered firearms from a hotel in North Carolina to the home of Robert Stein, a co-conspirator who worked with Harrison at the CPA-SC.
(3) The DOJ announced on Monday that the former highest-ranking executive in the U.S. for SAS Cargo Group A/S, a Scandinavian-based airline, has agreed to plead guilty for participating in a conspiracy to fix prices for air cargo rates.

According to the charges filed today in U.S. District Court for the District of Columbia, Timothy Pfeil, while in his capacity as SAS's area director of sales and marketing for North America, conspired with competitors to fix the rates charged to U.S. and international customers on air cargo shipments, in violation of the Sherman Act. In accordance with the plea agreement, which is subject to court approval, Pfeil has agreed to cooperate with the Department's ongoing investigation.

In July 2008, SAS pleaded guilty and was sentenced to pay a $52 million criminal fine for conspiring to fix prices on air cargo rates.

(4) The DOJ announced on Monday that a Milan, Italy-based marine hose manufacturer and the former president of its former U.S. subsidiary agreed to plead guilty for participating in a conspiracy to rig bids, fix prices, and allocate market shares of marine hose sold in the United States and elsewhere.
A one-count felony charge was filed today in U.S. District Court in West Palm Beach, Fla., against Manuli Rubber Industries SpA (Manuli) and Robert L. Furness, the former president of Manuli’s former Plantation, Fla.-based subsidiary. Under the terms of the plea agreements, which are subject to court approval, Manuli has agreed to pay a criminal fine of $2 million, and Furness has agreed to serve 14 months in prison and pay a $75,000 criminal fine. Both Manuli and Furness have also agreed to cooperate fully in the Department’s ongoing antitrust investigation. Manuli is the first corporation to be charged in the investigation.
It sounds as though the defendants here missed an opportunity to self-report to the DOJ Antitrust division. Under the DOJ Antitrust division corporate and individual leniency policies, it is possible to avoid prosecution if certain requirements are met. One of the major requirements is that the self-reporting must occur prior to the DOJ receiving information regarding the Antitrust violation from another source.