Antitrust Law Daily Wrap Up, ANTITRUST NEWS: Former Tokai Rika executive indicted for price fixing conspiracy, obstruction of justice, (May 27, 2014)

By Greg Hammond, J.D.

Hitoshi Hirano, previously the executive managing director at automotive parts manufacturer Tokai Rika Co. Ltd. (Tokai Rika), has been indicted by a Detroit federal grand jury for allegedly participating in a conspiracy to fix heater control panel prices and for obstruction of justice. The two-count indictment alleges that Hirano ordered employees to destroy evidence relating to the conspiracy, according to a U.S. Department of Justice (DOJ) announcement.

“The Antitrust Division will not tolerate executives directing their subordinates to engage in illegal cartels and conspiracies,” stated Antitrust Division Deputy Assistant Attorney General Brent Snyder. “Attempts to then obstruct justice and destroy evidence will give rise to additional charges.”

According to the DOJ, the indictment was filed in the federal district court in Ann Arbor and charges Hirano with engaging in “a conspiracy to suppress and eliminate competition in the automotive parts industry by agreeing to rig bids for, and to fix, stabilize and maintain the prices of heater control panels sold to Toyota Motor Corp. and Toyota Motor Engineering & Manufacturing North America Inc. (collectively, Toyota) for installation in vehicles manufactured and sold in the United States and elsewhere.” Specifically, it was alleged that Hirano and other individuals participated in conspiratorial meetings and reached collusive agreements from October 2003 through February 2010, or longer. In addition, the indictment alleges that Hirano was a direct participant in the conspiratorial conduct and that he “directed, authorized and consented to his subordinates’ participation.”

Hirano was additionally charged with “knowingly and corruptly persuading, and attempting to persuade” employees to destroy documents and electronic data that might contain evidence of antitrust crimes within the U.S. and other countries. The indictment alleges that Hirano’s obstruction of justice conduct occurred after he discovered the FBI searched Tokai Rika’s U.S. subsidiary.

Tokai Rika pleaded guilty for participating in the conspiracy and for obstruction of justice on December 12, 2012. The company was sentenced to pay $17.7 million in criminal fines. Besides Hirano, 33 other individuals were charged as a result of the government’s continued investigation of price fixing and bid rigging in the auto parts industry. Of those charged, 24 pleaded guilty or have agreed to plead guilty, and 22 of those individuals have been sentenced to serve prison terms ranging from one year and one day to two years. Twenty-seven companies have also pleaded guilty and have cumulatively agreed to pay more than $2.3 billion in fines.

Hirano could face a maximum of 10 years in prison and a $1 million criminal fine for his charge of price fixing in violation of the Sherman Act. According to the DOJ, “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.” He could also face an additional maximum of 20 years in prison for the charge of obstruction of justice, as well as an additional $250,000 criminal fine.

The government’s ongoing antitrust investigation of the auto parts industry is being conducted by four of the Antitrust Division’s criminal enforcement sections, as well as the FBI. The Antitrust Division’s Washington Criminal I Section and the FBI’s Detroit Field Office were responsible for bringing the charges against Hirano, with assistance from the FBI’s International Corruption Unit.

Companies: Tokai Rika Co., Ltd.; Toyota Motor Corp.; Toyota Motor Engineering & Manufacturing North America Inc.

News: Antitrust AntitrustDivisionNews