When I was the Chief of the Philadelphia Field Office, we had the first successful extradition by the Antitrust Division of a fugitive defendant. In 2010 a British executive, Ian Norris, was extradited to the U.S. The UK authorities declined to extradite Norris to face the antitrust violation he was charged with, but he was extradited to face charges of obstruction of justice in connection with an international cartel grand jury investigation. He was ultimately convicted at trial of one count of obstruction and sentenced to 18 months in prison.
More recently, the Division successfully litigated an extradition proceeding on an antitrust charge. Romano Pisciotti, an Italian national who had been placed on an Interpol “red notice” after being indicted for involvement in the marine hose cartel, was arrested in Germany during a layover at the Frankfurt airport. He lost his ten-month fight against extradition and was brought to the United States in April 2014 to face a one-count felony indictment. Pisciotti quickly reached a plea agreement. http://www.justice.gov/atr/cases/f305500/305542.pdf.
The Pisciotti case has thrust the mechanics and possibility of extradition to the forefront of attention. The Division has used the Pisciotti case as an opportunity to publicly state in numerous forums that it will seek extradition wherever feasible. And, these days, with the exception of the local real estate bid rigging auction cases, nearly all of the Division’s defendants are citizens of foreign nations.
On June 24th, the ABA Antitrust Section, Criminal Cartel and Practice Committee http://apps.americanbar.org/dch/committee.cfm?com=AT307000 hosted a timely and informative teleconference to discuss current issues around extradition. The lineup of experienced cartel practioneers was as follows:
- Adam C. Hemlock, Weil, Gotshal & Manges, New York
- Dr. Markus Röhrig, Hengeler Mueller, Brussels
- Toshiaki Tada, Hibiya Sogo Law Offices, Tokyo
- Wendy W.H. Waszmer, King & Spalding LLP, New York
Below is a recap of some of what I thought were the highlights of this excellent discussion. [Note: This is not an exhaustive list of the insightful comments made by the panelists and any errors in the report are mine.]
Wendy Waszmer, a former Assistant Chief of the New York Field Office of the Antitrust Division, spoke about the policies and procedures within the DOJ in considering whether to seek extradition. Ms. Waszmer noted that extradition was infrequent, in part because it is a decision that involves the entire Department of Justice, not just the Antitrust Division. In the first instance, a host of factors need to be considered regarding whether extradition is even feasible. Is there an extradition treaty? Does the law of the country from which the U.S. is seeking extradition provide that the conduct is criminal and punishable as a felony by at least one year in prison (dual criminality)? Are there statute of limitations issues? Can the case be successfully tried if extradition is achieved? But, even where conditions may permit extradition, the DOJ will still weigh whether an extradition request would be well received or possibly be a negative in overall cooperation between the U.S. and the other country. The overall interests of the U.S. (such as cooperation on other issues, including terrorism) may weigh against seeking extradition in any given antitrust case.
Ms. Waszmer also mentioned several valuable resources that discuss extradition issues: Two of them were the U.S. Attorneys Manual, Title 9-15.000 (INTERNATIONAL EXTRADITION AND RELATED MATTERS) and CRIMINAL RESOURCE MANUAL which discusses some of the considerations that go into evaluating whether to seek extradition. Title 18 U.S. Code § 3181 also covers extradition issues.
Dr. Markus Röhrig of Brussels discussed extradition considerations from the EU perspective. Dr. Röhrig noted that the US and the EU have an extradition treaty, but that extradition requests are really governed by the rules of the member states. The likelihood of extradition depends primarily on two issues. First, half of the EU member states will not extradite a fugitive of their own nationality. (Mr. Pisciotti, who was extradited by Germany, was an Italian citizen). Second, there has to be dual criminality (or double criminality as it is also called). The EU, while it imposes heavy fines, does not impose criminal penalties for cartel behavior. But many EU member states have criminal provisions for some types of cartel behavior—particularly bid-rigging. The sentiment in Europe is changing with the public (and legislators) taking a harsher view towards collusion in the market place. Dr. Röhrig felt that extradition could become more commonplace; particularly where the fugitive sought is not citizen of the country considering the extradition request.
Toshiaki Tada is an experienced cartel attorney in Japan. His comments were of great interest given that the auto parts cartel is the largest criminal investigation in antitrust history. Mr. Tada also noted that sentiment in Japan is turning against cartels. While Japan’s Anti-Monopoly law has criminal sanctions for cartels, in the not too distant past cooperation (rationalization) among competitors was accepted. Even when Japanese authorities began to challenge cartels the proceedings were usually civil. And, if there was a criminal proceeding, suspended jail sentences were the norm. In 2009, however, the penalties for cartel behavior were increased from three to five years, an indication from the Japanese legislature that courts should become more serious about imprisonment as a punishment. Still, Mr. Tada noted many cartel matters, including auto parts, have been handled administratively. Mr. Tada opined that while Japan is taking cartel enforcement more seriously, actual extradition of a Japanese citizen to the U.S., in the auto parts investigation for example, might not be likely. Mr. Tada felt that if there were a successful extradition request from Japan, it would likely involve some charge of obstruction.
Mr. Tada also noted that Japan’s Anti Monopoly law might not cover “component” price fixing such as the LCD conspiracy where the LCD panels were incorporated into finished products such as cell phones.
Commentary (My Two-Cents)
The mood of the panel, which I agree with, is that the U.S. will undoubtedly be looking for further extradition opportunities, but wholesale extradition of antitrust fugitives, even from countries with which the U.S. has an extradition treaty, is not likely. Even where the dual criminality is requirement met, imprisonment is still rare in most countries besides the U.S. Many foreign governments may still be unwilling to extradite one of their own citizens to the U.S.—especially to face a possible ten-year jail sentence.
There was consensus among the speakers that extradition is most likely to occur in one of two scenarios: 1) where a fugitive defendant on a “red notice” is arrested in a country where he is not a citizen and detained for extradition proceedings. This was the case with Pisciotti; and 2), where the defendant sought by the U.S. is a citizen of the country from which the U.S. is seeking extradition and the charges will likely include obstruction of justice of a cartel investigation. This was the case with Norris.
When I was with the Antitrust Division we indicted defendants who were citizens of many countries: Germany, South Africa, Japan to name a few. But the only time we sought extradition was when we believed the grand jury cartel investigation was obstructed by an elaborate cover-up. Obstruction is a sure way to make yourself a priority with the Antitrust Division since protecting the integrity of grand jury investigations is crucial to cartel enforcement. Also, it is much easier to convince another country that obstruction is a serious crime that merits the extraordinary remedy of extradition and prison.
The extradition proceedings against Norris took seven years. Many defenses were raised—more than can be recounted in this short recap. Success in the Norris extradition could not possibly have been achieved without the full cooperation and “buy in” of the UK authorities who in fact litigated the case in their courts on behalf of the United States. The takeaway for extradition possibilities is, as is often the case, “the cover-up is worse than the crime.”
I believe the U.S. may have hurt itself in future extraditions with an increase in the maximum jail term to 10 years. The Antitrust Division has done an admirable job of convincing much of the world to recognize the anticompetitive harms of price-fixing and to increase cartel enforcement. But, with a ten-year maximum jail sentence, the U.S. may be viewed as seeking to impose draconian sentences on citizens of other countries.
Even if extradition continues to be a fairly infrequent occurrence, the possibility of extradition is a strong card for the Antitrust Division to hold in plea negotiations. Foreign citizens voluntarily submit to U.S. jurisdiction for two related reasons: 1) they need to make their peace with the U.S. so that they can freely travel around the world and pursue their business interests; and 2) even if they retire, fire their travel agent and stay at home, they can never be entirely sure that extradition won’t take another step forward—with their case being the main event. Mr. Tada commented that many Japanese defendants in the auto parts cartel investigation might have had extradition in the back, or even forefront, of their minds when deciding to plead and serve jail terms in the United States. This is exactly the result the Antitrust Division hopes to achieve with its extradition successes, limited as they may be. Sometimes it is only necessary to hiss, not bite, to get the desired result.