The 2002 blockbuster film “Catch Me If You Can” chronicles the exploits of notorious check-writing fraudster Frank Abagnale Jr., his narrow escapes from capture, and his eventual apprehension abroad by American law enforcement. At the film’s conclusion, the FBI offers Frank an intriguing form of clemency: come work for us. Frank accepts, assisting the FBI in enforcing the same laws he himself had violated years before.

This concept lives on. Last month, the Department of Justice’s Antitrust Division (Division) took a similar approach in a plea agreement, introducing an imaginative – and potentially novel – approach to U.S. competition enforcement: a sentence of only community service, in the form of working with the Division on antitrust compliance and education “regarding the resolution of international fugitive cases.” This requirement, combined with more traditional plea-agreement terms, represents the latest iteration of the Division’s evolving and creative efforts to police alleged unlawful conduct and increase public education about the contours of U.S. antitrust law.

The Case

In early 2019, as part of a series of criminal prosecutions relating to promotional products, the Division indicted Taiwan-based G Nova Corporation (G Nova) and its CEO Yeh Fei Chu, aka Jim Chu (Chu), for conspiring to fix prices for customized foam Koozies (United States v. Chu et al., No. 4-19-cr-00070 (S.D. Tex.)). According to the plea agreement, G Nova and Chu acted as a go-between and hub between two competing U.S.-based customized Koozie sellers, facilitating and maintaining price coordination between them through electronic messages, telephone calls, and in-person meetings. The conspiracy purportedly remained in place from around May 2012 until at least February 2014 and was corroborated by publicly available pricing data.

According to the case docket, Chu resided in Taiwan since at least the January 2019 indictment; through negotiations with the Division, he agreed to voluntarily return to the U.S. for the purpose of entering a guilty plea (Dkt. No. 20). That plea was recently executed and filed in the Southern District of Texas (Dkt. No. 34).

The Plea Agreement

The plea agreement includes a substantial $300,000 criminal fine for Chu, “which is commensurate to the corporate fine amount that would be owed by [Chu’s] company, G Nova, which is now dissolved.” Importantly, the plea agreement explicitly recommends no sentence of imprisonment and instead agrees that a sentence of two years of probation is appropriate. The plea agreement also includes a rather unique community service requirement:

The Parties agree that the Defendant will complete up to 80 hours of community service in the form of providing assistance to the U.S. Department of Justice, Antitrust Division in connection with antitrust compliance and other public education efforts subject to the Antitrust Division’s approval, including participating in the creation of educational materials regarding the resolution of international fugitive cases.

Sentencing is currently scheduled for May 30th.

Takeaways

Historically, Division plea agreements with individuals would not foreclose a sentence of imprisonment and, in fact, Division prosecutors would traditionally advocate at sentencings for a period of imprisonment, as appropriate. However, the Division plea resolutions in recent years have moved away from an insistence on imprisonment, and the Chu plea is the latest example.

The community service requirement for Chu to provide compliance and education assistance efforts to the Division appears to be a truly novel resolution. But it raises questions as well. For example, what types of compliance and public education efforts relating to the resolution of international fugitive cases will be required? Will the prepared materials be public or available internally only to the Division? Will the “educational materials” be presented as a form of public service announcement or in written form (or both)? And is this provision part of a new trend – will the Division seek to include community service provisions in future plea agreements with individuals who may have some potential to contribute to the Division’s enforcement efforts (whether related to international fugitive cases or not)? Time will tell if there are more Frank Abagnales and Jim Chus to come.

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