The U.S. Department of Justice’s (DOJ) Procurement Collusion Strike Force (PCSF) has struck again, this time with the help of a Title III wiretap.
On May 8, 2024, the Antitrust Division announced a guilty plea in the case of a contractor who provided fuel truck services to the U.S. Forest Service’s wildfire fighters.1 The contractor was indicted in December 2023 for rigging bids and allocating markets for fuel truck contracts.2
In a superseding information, a charge of conspiring to monopolize the wildfire fuel truck service market was added to the bid rigging and market allocation charges, in violation of Sections 1 and 2 of the Sherman Act.3
Of particular note in the wildfire case is that the DOJ utilized a wiretap—judicially‑authorized eavesdropping on phone calls—that led to the discovery of “smoking gun” conversations.4
The reliance on wiretaps is a vivid reminder that the DOJ remains focused on antitrust crime and is committed to dedicating all of its available resources to investigating antitrust violations in cases involving federal contracting.
Case Overview
According to his plea agreement, as to the first conspiracy to rig bids, for an eight‑year period from 2015 to 2023, the defendant and his companies worked with a co-defendant and his companies to coordinate their respective bids to the U.S. Forest Service for wildfire fuel truck services.5 The two co-defendants agreed to avoid bidding against each other at all in certain geographic areas or coordinate to bid higher or lower than the other in order to increase the chances of one of their bids being chosen. The DOJ identified transcripts of phone conversations between the direct competitors when they shared proposed bids:
- “Yeah, I’d say if we both were in the ballpark at like, 2,500 bucks – I bet that would do the trick on the Type 2s.”
- “The day we can get it contracted we’ll, we’ll send you a text, kind of like I’ve done before. … Of what, what we’re actually going to do, so we really know where we’re at.”
- “Okay, that’s what I was – I haven’t punched anything through. And so I thought I better, better go over it with ya and make sure that I don’t step on toes or nothin’ bad.”
As to the second count alleging conspiracy to monopolize the wildfire fuel truck service market, according to his plea agreement, beginning in 2020, the co‑defendants sought to remove competitors from the market. In 2020, one defendant approached a competitor’s shop and offered to either rig bids with the competitor or for the competitor to sell his trucks to the defendant and agree not to compete with him. The DOJ overheard a conversation in 2023 between the co-conspirators, where the parties discussed and coordinated the specifics of their bids to the Forest Service for the purpose of “low balling” two other competitors.
Antitrust Implications for Companies and Executives
Vigilance in federal contracting markets. With the establishment of the Procurement Collusion Strike Force in 2019, the Antitrust Division sharpened its focus on detecting and prosecuting criminal conspiracies—whether through rigged bids, fixed prices, allocated markets or attempts to monopolize—which reduce competition for projects funded by federal tax dollars.
Since the launch of the PCSF, a steady stream of Antitrust Division prosecutions of companies and executives have involved conspiracies to secure contracts for projects supported by federal taxpayers.
The wildfire fuel truck plea is the latest reminder that the Antitrust Division will continue to remain vigilant in policing procurement markets funded by federal contracts and taxpayer dollars.
Using all the tools in the toolbox. The DOJ’s employment of wiretaps in its wildfire investigation and prosecution reinforces its public statements that it will rely on all available methods for detecting antitrust crimes. The Antitrust Division has noted that “[t]ools used to investigate antitrust crime include confidential informants, wiretaps, undercover agents, surveillance, consensual monitoring, cooperators, search warrants and foreign assistance requests.”6
More recently, the Antitrust Division’s Director of Criminal Enforcement Emma Burnham noted that the Division is committed to “using covert techniques [to] obtain the type of irrefutable evidence juries can’t ignore: wiretaps, video recordings and, more recently, things like capturing ephemeral messaging.”7
Earlier this year, the DOJ and the Federal Trade Commission (FTC) issued new guidance warning companies that they must preserve ephemeral messaging—short-lived and often-times disappearing mobile-to-mobile messages—the same way traditional communications are saved or risk potential criminal or civil liability.8
The conversations quoted in the wildfire indictment are reminiscent of the infamous lysine cartel tapes in the 1990s.9 There, with the help of a cooperating informant, an undercover FBI agent recorded a multitude of videos and phone calls of meetings between executives from multinational companies conspiring to fix prices for lysine, a popular animal feed additive. 10 The lysine cartel prosecution was one of the largest price-fixing schemes ever uncovered.
The DOJ’s use of wiretaps makes one thing clear: the government is taking criminal antitrust violations seriously and will use all the tools in its toolbox to investigate and prosecute criminal conspiracies.
The same is true for state antitrust enforcers who are ramping up criminal antitrust investigations. The head of the Antitrust Section of the California Attorney General’s Office recently announced that the state’s Department of Justice—which can also employ wiretapping—plans to pursue criminal investigations under California’s antitrust statute, the Cartwright Act, after a more than two-decade lull in such prosecutions.11
Participants in public contracting markets should be aware of the DOJ’s aggressive stance on antitrust violations and its willingness to deploy all available resources to combat market manipulation and collusion, including wiretaps and other tools, to secure incriminating evidence.
1 Press Release, U.S. Dep’t of Justice, Executive Pleads Guilty to Conspiring to Monopolize, Rig Bids and Allocate Territories for Wildfire Services (May 8, 2024), https://www.justice.gov/opa/pr/executive-pleads-guilty-conspiring-monopolize-rig-bids-and-allocate-territories-wildfire.
2 Indictment, Count 7, U.S. v. Tomlinson, No. 1:23-cr-00326 (D. Idaho Dec. 12, 2023), Dkt. 2, https://www.justice.gov/d9/2023-12/231212_idaho_fire_indictment_1-23-cr-00326-akb_dkt_2.pdf. Tomlinson was also charged with wire fraud and conspiracy to commit wire fraud.
3 First Superseding Information as to Defendant Ike Tomlinson, Count 2, U.S. v. Tomlinson, No. 1:23-cr-00326 (D. Idaho Apr. 8, 2024), Dkt. 35, https://www.justice.gov/opa/media/1351491/dl?inline.
4 18 U.S.C. § 2516(r) (DOJ may secure “an order authorizing or approving the interception of wire or oral communications … when such interception may provide or has provided evidence of … any criminal violation of … the Sherman Act”).
5 Rule 11 Plea Agreement, U.S. v. Tomlinson, No. 1:23-cr-00326 (D. Idaho Apr. 8, 2024), Dkt. 36, https://www.justice.gov/opa/media/1351486/dl?inline.
6 U.S. Dep’t of Justice, Federal Antitrust Crime: A Primer for Law Enforcement Personnel, at 9 (Oct. 2023) https://www.justice.gov/atr/page/file/1091651/dl.
7 Speech, Director Emma Burnham of the Antitrust Division's Criminal Enforcement Section Delivers Remarks to the New York State Bar Ass’n (Oct. 18, 2023), https://www.justice.gov/opa/speech/director-emma-burnham-antitrust-divisions-criminal-enforcement-section-delivers-remarks.
8 See Press Release, Fed. Trade Comm’n, FTC and DOJ Update Guidance That Reinforces Parties’ Preservation Obligations for Collaboration Tools and Ephemeral Messaging (Jan. 26, 2024), https://www.ftc.gov/news-events/news/press-releases/2024/01/ftc-doj-update-guidance-reinforces-parties-preservation-obligations-collaboration-tools-ephemeral; Reichenberg, David et al., Law360, Complying With Enforcers’ Ephemeral Messaging Guidance (March 4, 2024), https://www.law360.com/articles/1808514.
9 Indictment, U.S. v. Andreas, No. 96-CR-00762 (N.D. Ill. Dec. 3, 1996), https://www.justice.gov/atr/case-document/file/486296/dl.
10 Speech, Scott Hammond, Dir. of Crim. Enforcement, U.S. Dept. of Justice, Antitrust Div., The Fly On The Wall Has Been Bugged--Catching An International Cartel In The Act (May 15, 2001), https://www.justice.gov/atr/speech/fly-wall-has-been-bugged-catching-international-cartel-act.
11 U.S. Dep’t of Justice, Protocol for Increased State Prosecution of Criminal Antitrust Offenses (Mar. 1996), https://www.justice.gov/sites/default/files/atr/legacy/2006/04/27/0618.pdf.
