U.S. Justice Dept. Had Busy Year Busting Corporate Fraud

Dec. 24, 2006
Second highest sum of criminal fines ever.

Criminal prosecutions of corrupt executives and businesses through 2006 secured some of the biggest fines in the department's history. In a summary issued earlier this month, the department said its antitrust division obtained the second highest sum of criminal fines ever in 2006 as prosecutors tackled corporate price-fixing, bid-rigging and procurement fraud schemes.

The highest criminal penalties ever were recorded in 1999, mainly due to a $500 million fine lodged against Swiss pharmaceutical giant F. Hoffmann-La Roche Ltd. over a vitamins price-fixing scheme.

For the fiscal year ending September 30, the Justice Department said it had obtained criminal fines totaling $473.45 million, marking a 40% increase over 2005, as it filed 33 criminal cases, many involving multiple defendants.

The government's largest fine of the fiscal year, $300 million, was levied against Samsung Electronics Co. and its U.S. subsidiary, Samsung Semiconductor Inc., after it pleaded guilty to a price-fixing conspiracy related to high-tech dynamic random access memory (DRAM) chips. Government investigators are continuing to probe the international cartel that fixed prices for DRAM chips, a key component in computers and other electronics.

A separate probe into the concrete industry in the U.S. Midwest has resulted in fines so far of over $35 million after five companies and 10 executives pleaded guilty to, or were convicted of, conspiring to fix the price of ready-mixed concrete.

The government said it also secured guilty pleas or convictions against price-fixing cartels and bid-rigging conspiracies across a number of industries in 2006, including rubber chemicals, hydrogen peroxide and sodium perborates, gas pipeline construction and even marine fenders supplied to the U.S. Navy and Coast Guard.

Copyright Agence France-Presse, 2007

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