CRIMINAL HIGHLIGHTS:

• Investigated and prosecuted criminal antitrust violations across many sectors of the economy, with over $3.243 billion in criminal fines imposed in FYs 2016-17. In fiscal year 2017, investigated and prosecuted individual cases that resulted, in the highest number of individuals sentenced to prison terms since 2012.  (30 individuals were sentenced to prison terms in FY 2017.)
• Devoted substantial resources to individual prosecutions and sentencings. 
  • Over FYs 2016-17, 52 defendants in Antitrust Division cases have been sentenced to prison terms, totaling 15,110 days of incarceration.
  • Many of the Division’s individual convictions were the result of investigations into anticompetitive conduct at public real estate foreclosure auctions.  This conduct was widespread and harmed homeowners and others.
• Trial due to start on October 9 in a price-fixing case against three traders from major banks, who are charged with manipulating the foreign currency exchange spot market for U.S. dollars and Euros.  This follows corporate pleas in 2015.
• A record-setting number of criminal cases (nine) went to trial in FY 2017—the highest number in the last two decades.
• Actively engaged in outreach and training for agents at offices of inspectors general at numerous federal agencies.  Such engagement and training arms these agents with the ability to detect and report antitrust crimes.  In many instances these agencies also join our investigative efforts.
• Implemented no-poach initiative, investigating and prosecuting “no-poach” and wage-fixing agreements.
• Updated Leniency Program information designed to increase transparency and self-reporting of cartel behavior.
• Held a public roundtable discussion on “the role that corporate antitrust compliance programs play in preventing and detecting antitrust violations and ways to further promote corporate antitrust compliance.”
• Hosted event on the 25^th anniversary of the Division’s Leniency Program

Mr. Delrahim expanded on these highlights:

Criminal Enforcement

The Division investigated and prosecuted antitrust violations across many sectors of the economy, with over $3.243 billion in criminal fines imposed in FYs 2016-17.  In the most recent fiscal year, the Division investigated and prosecuted individual cases that resulted in the highest number of individuals sentenced to prison terms since 2012.  The Division also has made efforts to increase self-reporting of cartel behavior through its clarification of its amnesty program.

Criminal enforcement has long been a vital tool to protect competition and consumers.  The Sherman Act has been a criminal statute ever since it was signed into law in 1890.  Antitrust violations such as price-fixing, bid-rigging, and market allocation unambiguously disrupt the integrity of the competitive process, harm consumers, and reduce faith in the free market system.  Such harmful agreements among competitors are subject to a rule of per se illegality, and individuals who engage in such conduct appropriately face criminal accountability along with the corporations they serve.  At the Division, we focus our criminal enforcement efforts on holding culpable corporations and individuals accountable, including high-level executives.

In an important example, the Division brought charges against and obtained guilty pleas from executives of a generic pharmaceutical company for price fixing, bid rigging, and customer allocation for an antibiotic and a drug used to treat diabetes.  (E.g., Plea Agreement, U.S. v. Glazer, 2:16-cr-00506 (E.D. Pa. Jan. 9, 2017), https://www.justice.gov/atr/case-document/file/931381/download.)  It is particularly galling that, when healthcare prices in the United States are already high, certain corporations and executives engaged in anticompetitive activities at the expense of individuals who depend on critical medications.

In another area that has a profound impact on American consumers, the Division actively prosecuted bid rigging and fraud relating to real estate foreclosure auctions.  To date, 138 individuals and 3 companies have been charged as a result of the Division’s investigations of bid rigging and fraud relating to real estate foreclosure auctions in California, Alabama, North Carolina, Georgia, and Mississippi.  (E.g., Press Release, U.S. Dep’t of Justice, Seventh Mississippi Real Estate Investor Pleads Guilty to Conspiring to Rig Bids At Public Foreclosure Auctions (July 19, 2018), https://www.justice.gov/opa/pr/seventh-mississippi-real-estate-investor-pleads-guilty-conspiring-rig-bids-public-foreclosure.)  On an individual basis, each of these cases is relatively small, but on an aggregate basis, these cases are important to the economy, particularly because the convicted investors subverted competition and lined their pockets by illegal bid rigging and fraud while diverting money from the homeowners and mortgage holders entitled to any proceeds.

The Division has many open criminal investigations.  The Division is trying more criminal cases than ever before and obtaining more prison sentences for individuals than in recent years.  Corporate leaders and business executives who consider deviating from the rules of our free enterprise system should take notice.

Moreover, the American public should know that the Antitrust Division is looking out for their salaries, as well.  We have put employers on notice that agreements between employers that eliminate competition for hiring employees in the form of no-hire or non-solicitation agreements (often referred to as “no-poach” agreements) are per se violations of the Sherman Act when they are not ancillary to legitimate collaborations.  In October 2016, the Division reminded the business community that no-poach and wage-fixing agreements can be prosecuted as criminal violations when they are not reasonably necessary to a separate, legitimate transaction or collaboration between employers.  As a matter of prosecutorial discretion, the Division will pursue no-poach agreements terminated before October 2016 through civil actions.  Defendants should anticipate potential criminal enforcement actions for any such naked no-poach agreements we uncover that post-date our October 2016 guidance, although we reserve discretion as appropriate in making our ultimate determinations.

The Division will continue to be diligent in detecting and deterring collusion that harms American consumers, and we will remain focused on crucial industries that affect Americans deeply, such as real estate, food, financial services, and health care, just to name a few.

As mentioned, the full statement on the Antitrust Division’s activities can be found here and its worth checking out.

Thanks for reading!