Antitrust Law Daily Wrap Up, ANTITRUST NEWS: Price-fixing guilty plea entered by executive of water treatment chemical manufacturer, (Oct 27, 2015)

By Edward L. Puzzo, J.D.

As a result of an investigation into collusion in the liquid aluminum sulfate industry, Frank A. Reichl , a former executive of a water treatment chemicals manufacturer, has pleaded guilty for his role in a conspiracy to eliminate competition in the liquid aluminum sulfate market by fixing prices, rigging bids, agreeing not to compete for contracts and allocating customers, the Justice Department’s Antitrust Division announced today. Liquid aluminum sulfate is a coagulant used by municipal water treatment facilities to treat drinking and wastewater. It is also used by pulp and paper companies in their manufacturing processes.

According to documents filed with the court, from 1997 until July 2010, Reichl and his co-conspirators met to discuss each other’s liquid aluminum sulfate business, submitted intentionally losing bids to favor the intended winner of the business, withdrew inadvertently winning bids and discussed prices to be quoted or bid to customers. Reichl is the first defendant to plead guilty to participating in this decade-and-a-half-long conspiracy.

The investigation was conducted by the Antitrust Division’s New York office and the FBI’s New Jersey office. “By agreeing not to disturb each other’s ‘historical’ business, Reichl and his co-conspirators cheated municipalities and paper companies out of competitive prices for their supplies of liquid aluminum sulfate, a key water treatment chemical,” said Assistant Attorney General Bill Baer of the Justice Department’s Antitrust Division. “We continue to work with our partners at the FBI to hold offenders in this industry criminally accountable.”

A violation of the Sherman Act carries a maximum penalty of 10 years in prison and a $1 million fine for individuals. The maximum fine for a Sherman Act charge may be increased to twice the gain derived from the crime or twice the loss suffered by the victims if either amount is greater than the statutory maximum fine.

News: Antitrust AntitrustDivisionNews