Expansion of Antitrust Enforcement Continues with Extradition

by Pillsbury Winthrop Shaw Pittman LLP
Contact

On April 4, 2014, the Department of Justice’s Antitrust Division announced its first successful extradition of a foreign national to the United States on antitrust charges. Romano Pisciotti, a citizen of Italy, has been under indictment since 2010 based on his alleged involvement in a marine hose cartel that has produced a number of guilty pleas. While traveling through Germany on business, he was identified as a fugitive from United States justice, detained, and eventually extradited. Germany’s extradition of Mr. Pisciotti demonstrates both the increased willingness of the Division to pursue extradition and the increased risks posed to foreign executives, especially if they travel outside of their home countries while under indictment in the United States.

Background
The United States Department of Justice’s Antitrust Division (“DOJ” or “Division”) has steadily increased its prosecution of international cartels involving foreign companies. In 1993 and 1994, the DOJ announced its corporate and individual leniency programs. These programs provide immunity to companies and individuals who are the first to report illegal antitrust activity, and leniency to those who report their own involvement once an investigation has already begun.1 They have led to an increase in enforcement against foreign cartel defendants: both the number of foreign executives separately prosecuted for violating antitrust laws and corresponding prison sentences are on the rise.2

Foreign cartel defendants sometimes voluntarily travel to the United States to face charges brought against them. Usually this is pursuant to plea agreements negotiated in advance. In other cases, individuals may come to the United States voluntarily to contest the charges and attempt to clear their names – as happened with several AU Optronics executives who recently came to the United States from Taiwan to defend themselves at trial.3 But where individuals under indictment decide to stay in their home country or otherwise decline to come to the United States to face prosecution, that has typically been the end of the matter.

Extraditing an individual from another country to the United States is a political process. Usually, it requires: (i) an extradition treaty between the United States and the foreign country; (ii) that the foreign country also treats the individual’s alleged conduct as a criminal offense (referred to as “dual criminality”); and (iii) that the foreign country is willing to extradite the individual. Notably, some countries prohibit, or at least do not require, extradition of their own citizens.4

In 2010, the DOJ successfully extradited a foreign cartel defendant on obstruction of justice charges. The Division alleged that Ian Norris, a British national and former CEO of Morgan Crucible, participated in an international conspiracy to fix the prices of carbon products. Because the United Kingdom did not criminalize antitrust offenses at the time, the United States could not extradite Norris on antitrust charges. Instead, Norris was extradited to the United States to stand trial for obstruction (coordinating efforts to destroy and conceal documents) in connection with the antitrust investigation. He was ultimately convicted at trial and sentenced to 18 months in prison and fined $25,000.5

The Extradition of Romano Pisciotti
Italian national Romano Pisciotti’s extradition is part of the DOJ’s long-standing investigation into an alleged international conspiracy among marine hose manufacturers.6 In May 2007, the Division arrested eight foreign nationals attending a business conference in Texas and charged them with participating in a conspiracy to rig bids, fix prices and allocate market shares of marine hose sold in the United States and elsewhere. According to the DOJ, the alleged cartel significantly affected the prices of marine hose and related products sold worldwide between 1999 and 2007.

Pisciotti is a former executive of Parker ITR Srl, a marine hose manufacturer headquartered in Italy. By 2010, Parker ITR, four other manufacturers and nine executives pleaded guilty to participating in the alleged marine hose cartel. Pisciotti was “carved out” of Parker ITR’s guilty plea and separately indicted by a grand jury on August 26, 2010 in the U.S. District Court for the Southern District of Florida. The indictment claimed that Pisciotti violated the Sherman Act by participating in the marine hose conspiracy.

On June 17, 2013, Pisciotti attempted to catch a connecting flight through Frankfurt, Germany while traveling back to Italy from a business trip to Nigeria. German officials identified Pisciotti as a fugitive from United States justice and detained him for potential extradition. Because Germany and the United States have an extradition treaty and bid-rigging is a criminal offense in both countries, Pisciotti was eventually extradited.

Pisciotti made his initial appearance in the U.S. District Court for the Southern District of Florida on April 4, 2014. If convicted, he faces a maximum penalty of 10 years in prison and a fine of $1 million dollars (or up to twice the amount gained by the conspirators or lost by the victims as a result of the conspiracy).

Implications
Pisciotti’s case further demonstrates the DOJ’s commitment to prosecuting foreign nationals for violations of United States antitrust law. The Division will likely point to Pisciotti’s extradition to pressure foreign companies and their employees to plead guilty and cooperate with the government.

It is unlikely that Pisciotti’s extradition will lead to a sudden increase in the extradition of foreign cartel defendants, however. Many countries remain unable or unwilling to extradite their own citizens to face antitrust charges in the United States, particularly those countries that do not criminalize cartel activity. Nevertheless, Pisciotti’s extradition demonstrates the DOJ’s continued focus on cartel activity across the globe, as well as the risks posed to foreign executives traveling outside of their home countries while under indictment in the United States.

  1. See Scott D. Hammond, Deputy Ass’t Att’y Gen., Cracking Cartels with Leniency Programs, remarks presented for the OECD Competition Committee (October 18, 2005), available at this link; see also Dept. of Justice, Corporate Leniency Policy (August 10, 1993), available at this link; Dept. of Justice, Leniency Policy for Individuals (August 10, 1994), available at this link.
  2. See John M. Connor, American Antitrust Institute, Problems with Prison in International Cartel Cases, at 27 (June 20, 2011), available at this link.
  3. Over a series of three trials, three of the AU Optronics executives were convicted and sentenced to prison terms and three were acquitted. See Renata B. Hesse, Deputy Ass’t Att’y Gen., IP, Antitrust and Looking Back on the Last Four Years, remarks presented at Global Competition Review (February 8, 2013), available at this link; see also Melissa Lipman, Law360, AUO Exec Acquitted in Price-Fixing Case (October 11, 2013), available at this link.
  4. See Michael J. Garcia and Charles Doyle, Cong. Research Serv., 98-958, Extradition To and From the United States: Overview of the Law and Recent Treaties, at 13-14 (March 17, 2010), available at this link; James A. Wilson, Extradition: The New Sword or the Mouse That Roared, The Antitrust Source, at 3 (April 2011) (finding that the number of jurisdictions that have adopted criminal sanctions for antitrust violations remains relatively small and among them most will not extradite their own citizens), available at this link; see also Gregory C. Shaffer et al., Criminalizing Cartels: A Global Trend?, 12 Sedona Conference Journal 313, at 5-6 (June 2011) (concluding that only Brazil, Canada, France, Germany, Ireland, Japan, Norway, the United Kingdom and the United States are “‘consciously targeting cartel activity by means of criminal law’”) (citation omitted), available at this link;
  5. See Dept. of Justice, Office of Public Affairs, Former CEO of Morgan Crucible Co. Found Guilty of Conspiracy to Obstruct Justice (July 27, 2010), available at this link.
  6. Marine hose is a flexible rubber hose used to transfer oil between tanks and storage facilities.
  7. In addition to Parker ITR, the following companies pleaded guilty: Bridgestone Corp. of Japan; a Florida subsidiary of Manuli SPa of Italy; Trelleborg of France; and Dunlop Marine and Oil Ltd. of the United Kingdom. Each company agreed to pay fines and many of their executives agreed to serve time in prison.

Written by:

Pillsbury Winthrop Shaw Pittman LLP
Contact
more
less

Pillsbury Winthrop Shaw Pittman LLP on:

Readers' Choice 2017
Reporters on Deadline

"My best business intelligence, in one easy email…"

Your first step to building a free, personalized, morning email brief covering pertinent authors and topics on JD Supra:
Sign up using*

Already signed up? Log in here

*By using the service, you signify your acceptance of JD Supra's Privacy Policy.
Privacy Policy (Updated: October 8, 2015):
hide

JD Supra provides users with access to its legal industry publishing services (the "Service") through its website (the "Website") as well as through other sources. Our policies with regard to data collection and use of personal information of users of the Service, regardless of the manner in which users access the Service, and visitors to the Website are set forth in this statement ("Policy"). By using the Service, you signify your acceptance of this Policy.

Information Collection and Use by JD Supra

JD Supra collects users' names, companies, titles, e-mail address and industry. JD Supra also tracks the pages that users visit, logs IP addresses and aggregates non-personally identifiable user data and browser type. This data is gathered using cookies and other technologies.

The information and data collected is used to authenticate users and to send notifications relating to the Service, including email alerts to which users have subscribed; to manage the Service and Website, to improve the Service and to customize the user's experience. This information is also provided to the authors of the content to give them insight into their readership and help them to improve their content, so that it is most useful for our users.

JD Supra does not sell, rent or otherwise provide your details to third parties, other than to the authors of the content on JD Supra.

If you prefer not to enable cookies, you may change your browser settings to disable cookies; however, please note that rejecting cookies while visiting the Website may result in certain parts of the Website not operating correctly or as efficiently as if cookies were allowed.

Email Choice/Opt-out

Users who opt in to receive emails may choose to no longer receive e-mail updates and newsletters by selecting the "opt-out of future email" option in the email they receive from JD Supra or in their JD Supra account management screen.

Security

JD Supra takes reasonable precautions to insure that user information is kept private. We restrict access to user information to those individuals who reasonably need access to perform their job functions, such as our third party email service, customer service personnel and technical staff. However, please note that no method of transmitting or storing data is completely secure and we cannot guarantee the security of user information. Unauthorized entry or use, hardware or software failure, and other factors may compromise the security of user information at any time.

If you have reason to believe that your interaction with us is no longer secure, you must immediately notify us of the problem by contacting us at info@jdsupra.com. In the unlikely event that we believe that the security of your user information in our possession or control may have been compromised, we may seek to notify you of that development and, if so, will endeavor to do so as promptly as practicable under the circumstances.

Sharing and Disclosure of Information JD Supra Collects

Except as otherwise described in this privacy statement, JD Supra will not disclose personal information to any third party unless we believe that disclosure is necessary to: (1) comply with applicable laws; (2) respond to governmental inquiries or requests; (3) comply with valid legal process; (4) protect the rights, privacy, safety or property of JD Supra, users of the Service, Website visitors or the public; (5) permit us to pursue available remedies or limit the damages that we may sustain; and (6) enforce our Terms & Conditions of Use.

In the event there is a change in the corporate structure of JD Supra such as, but not limited to, merger, consolidation, sale, liquidation or transfer of substantial assets, JD Supra may, in its sole discretion, transfer, sell or assign information collected on and through the Service to one or more affiliated or unaffiliated third parties.

Links to Other Websites

This Website and the Service may contain links to other websites. The operator of such other websites may collect information about you, including through cookies or other technologies. If you are using the Service through the Website and link to another site, you will leave the Website and this Policy will not apply to your use of and activity on those other sites. We encourage you to read the legal notices posted on those sites, including their privacy policies. We shall have no responsibility or liability for your visitation to, and the data collection and use practices of, such other sites. This Policy applies solely to the information collected in connection with your use of this Website and does not apply to any practices conducted offline or in connection with any other websites.

Changes in Our Privacy Policy

We reserve the right to change this Policy at any time. Please refer to the date at the top of this page to determine when this Policy was last revised. Any changes to our privacy policy will become effective upon posting of the revised policy on the Website. By continuing to use the Service or Website following such changes, you will be deemed to have agreed to such changes. If you do not agree with the terms of this Policy, as it may be amended from time to time, in whole or part, please do not continue using the Service or the Website.

Contacting JD Supra

If you have any questions about this privacy statement, the practices of this site, your dealings with this Web site, or if you would like to change any of the information you have provided to us, please contact us at: info@jdsupra.com.

- hide
*With LinkedIn, you don't need to create a separate login to manage your free JD Supra account, and we can make suggestions based on your needs and interests. We will not post anything on LinkedIn in your name. Or, sign up using your email address.