Plenary 3: Case Resolution
(Relating to Hypothetical)
2012 ICN Cartel Workshop
P a n a m a C i t y , P a n a m a , T h u r s d a y , O c t o b e r 4 th, 2 0 1 2
Lisa M. Phelan
Chief of the National Criminal Enforcement Section (NCES)
United States Department of Justice, Antitrust Division
The views expressed in this presentation are strictly my own and do not
necessarily reflect the views of the United States Department of Justice.
Overview of the Case Resolution Method in the United States
 Criminal System
All hardcore cartel offenses (price fixing, bid rigging, customer and
market allocation) are prosecuted as criminal offenses.
• Both corporations and individual executives are prosecuted.
• Numbers for 2011 & 2012 of Corporate and Individual Cases
Prosecuted:
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Overview of the Case Resolution Method in the United States
 Penalties
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Corporations
• Corporations are subject to a max $100 million fine under Sherman
Act statute OR twice the gain or loss caused by the conduct.
• More than 20 companies have paid over $100 million in fines. The
maximum fine to date is $500 million.
Individual Executives
• Individual executives are subject to up to 10 years in prison.
• To date, the maximum sentence imposed is 4 years.
Determination of Penalties
• The level of penalty is determined by the volume of commerce
affected by the cartel.
• The US Sentencing Guidelines set certain standard fine and jail
term levels, depending on VOC and certain aggravating and
mitigating factors.
Overview of the Case Resolution Method in the United States
 2 Ways a Criminal Case is Prosecuted
1.
Admission of guilt results in a Plea Agreement
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A corporation or executive can admit guilt and agree to cooperate
fully with the government’s investigation. In that circumstance
the USDOJ will file a charging document called a ‘Criminal
INFORMATION.’
Typically a plea agreement, signed by the defendant and the
USDOJ, will be filed with the court at the same time the
Information is filed. This resolves the case on agreed terms.
Sometimes the parties agree to a specific fine amount (for a
corporation) or jail sentence (for an individual), and the court
must accept and impose that amount or the deal is void.
For other plea agreements, the parties agree on the facts of the
case, and the court decides the level of penalty.
Overview of the Case Resolution Method in the United States
 2 Ways a Criminal Case is Prosecuted
2.
Indictment and Jury Trial
• If a corporation or individual does not admit guilt for
cartel conduct, the USDOJ will ask a grand jury (23
private citizens) to INDICT the defendant.
• If indicted, a corporation or individual will have a trial in
front of a judge and a jury of 12 private citizens.
• During a trial, the USDOJ will call witnesses, play tape
recordings, and show the jury documents that evidences
the cartel’s existence and that the defendant participated
in the cartel.
• The jury must find the defendant guilty beyond a
reasonable doubt in order to convict the corporation
and/or the individual.
Overview of the Case Resolution Method in the United States
Cooperative
Non-Cooperative
Company admits guilt and
wants to cooperate with
USDOJ’s Investigation.
Company DOES NOT admit
guilt and thus won’t cooperate
with USDOJ’s Investigation.
USDOJ will ask a Grand Jury
to Indict the company.
Criminal Information and
Plea Agreement are filed with
the court.
If indicted the company will
stand trial.
Fine is determined either by
the company and government
or strictly by the court.
To be deemed guilty, the jury
must find the defendant guilty
‘beyond a reasonable doubt.’
Treatment of Hypothetical Case
 CropPro : the first leniency applicant before the
initiation of the Antitrust Division’s case.
 AgForce: has indicated its intent to cooperate with
the investigation. It must plead guilty to a criminal
Sherman Act charge.
 RuralPro: Refuses to cooperate or admit guilt.
Treatment of Hypothetical Case
 CropPro : the first leniency applicant before the
initiation of the Antitrust Division’s case.
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The evidence submitted by CropPro was sufficient for it to receive
the conditional amnesty letter. No other applicants for leniency
will be accepted for this conspiracy.
It must meet the requirements of the leniency program, including
making RESTITUTION. It will NOT however be criminally
charged, nor will it’s executives, if they cooperate.
Treatment of Hypothetical Case
 AgForce: has indicated its intent to cooperate with
the investigation. It must plead guilty to a criminal
Sherman Act charge.
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It will be subject to pay a fine based on its U.S. affected VOC, and
pursuant to the U.S. Sentencing Guidelines.
It’s fine can be reduced if it gives significant cooperation – average
is 30-35% for a ‘second-in.’
The scope of the charge may be limited to only what the Division
already learned from CropPro.
One or more executives will be ‘carved out’ of the corporate plea
agreement and may be separately prosecuted.
It can further reduce its fine level if it brings new ‘Amnesty Plus’
matters to the Division.
Indictment of RuralPro
 RuralPro: Refuses to cooperate or admit guilt.
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Will be recommended for Indictment to a Federal Grand Jury.
If indicted by the Grand Jury, it will stand trial.
One or more of its executives (Amato? Trereira?) may be indicted
as well.
If convicted, will ask court to impose a maximum fine based on
conspirators’ VOC and US Sentencing GLs.
Subject to fine based on revenues of ALL cartel members.
Individuals likely subject to jail term of several years.
If individual executives are outside of US jurisdiction and they
refuse to come to the US for trial, they will be placed on Interpol
Red Notice.