Antitrust Law Daily Wrap Up, TOP STORY: Japanese auto parts executives agree to plead guilty in U.S. price fixing investigation, (Jan 31, 2014)

By Jeffrey May, J.D.

Former executives of Diamond Electric Mfg. Co. Ltd., a Japanese automobile parts manufacturer, have agreed to plead guilty to U.S. charges that they participated in a conspiracy to fix prices for automobile ignition coils, the Department of Justice announced today. Separate felony charges were filed in federal district court in Detroit against the former company president—Shigehiko Ikenaga—and the former company vice-president—Tatsuo Ikenaga. The individuals have agreed to serve prison time and to pay fines (U.S. v. Shigehiko Ikenaga, Criminal No. 2:14-cr-20045; U.S. v. Tatsuo Ikenaga, Criminal No. 2:14-cr-20046).

Diamond Electric, which manufactures ignition coils, pleaded guilty in September 2013 for its involvement in the conspiracy. The company was fined $19 million. Diamond Electric was the first company charged in the government’s ongoing probe of the auto parts industry with participating in a conspiracy involving auto parts sold directly to a U.S.-based automobile company, Ford Motor Company. The company also sold ignition coils to automotive manufacturers Toyota Motor Corp. and Fuji Heavy Industries Ltd. and to certain of their subsidiaries. Ignition coils are part of a car’s fuel ignition system and release electric energy suddenly to ignite a fuel mixture.

The current defendants were allegedly executives at Diamond Electric during the period of the alleged conspiracy, approximately July 2003 to February 2010. According to the government, Shigehiko Ikenaga was the company president, and Tatsuo Ikenaga was a managing director, and then vice president, and simultaneously served as president of Diamond Electric’s U.S. subsidiary during the relevant period. Diamond Electric Mfg. Corp. is based in Michigan and has a manufacturing plant in West Virginia.

Under a plea agreement that requires court approval, Shigehiko Ikenaga will serve 16 months in a U.S. prison and pay a $5,000 fine. Tatsuo Ikenaga has agreed to serve 13 months in a U.S. prison and pay a $5,000 fine. Both individuals have pledged to cooperate with the Justice Department’s investigation.

According to the Justice Department, these two defendants are the 27th and 28th individuals charged in the government’s ongoing investigation into price fixing and bid rigging in the auto parts industry. Twenty four companies have been charged.

Companies: Diamond Electric Mfg. Co. Ltd.; Ford Motor Co.

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