The U.S. Department of Justice’s (DOJ) Antitrust Division recently demonstrated its commitment to holding executives accountable for antitrust violations, regardless of their nationality or location. On April 4, 2014, DOJ announced its first-ever extradition of a foreign national to the U.S. to face criminal charges of participating in a worldwide bid-rigging conspiracy.
DOJ touts this success as a major step in its efforts to deter violations of the Sherman Antitrust Act and garner cooperation from individuals, who might otherwise choose fugitive status.
In 2010, Romano Pisciotti — an Italian national — was indicted by a grand jury and pled guilty to one count of violating the Sherman Act by conspiring to fix prices, rig bids and allocate market shares for marine hose products sold by his former employer Parker ITR Srl. in the U.S. and elsewhere. While under indictment, Pisciotti was arrested and jailed in Germany on June 17, 2013. Because bid-rigging is a criminal offense in Germany, extradition was granted pursuant to an extradition treaty between the U.S. and Germany.
Pisciotti made his initial appearance in the U.S. District Court in the Southern District of Florida on April 4, 2014.
Extradition is a complex diplomatic process, over which DOJ has little control, especially if there are no local laws in the foreign jurisdiction that criminalize the same conduct as charged in the U.S.
In 2004, for example, DOJ sought to extradite Ian Norris — a UK national charged with antitrust and obstruction of justice violations. It took six years of litigation to extradite him, but only for the obstruction of justice charges. At the time of his crime, the UK did not have a criminal antitrust law in place.
Fortunately, however, the relevant factors lined up in the Pisciotti case, although it’s unclear whether he would have been extradited had he been a German national. With one success under DOJ’s belt — and the fact that Pisciotti will likely face a longer prison sentence because of his fugitive status — future fugitives may think twice before risking harsher penalties by avoiding U.S. courts.
Individuals violating the Sherman Act face up to 10 years’ imprisonment and $1 million fine.
Despite the hurdles to extradition, aggressive enforcement of antitrust violations has resulted in criminal fines topping $4 billion over the last five years. DOJ is clearly dedicated to deterring criminal behavior by continuing this trend and imposing significant criminal penalties and treble damages on corporations, while increasing the risk of jail time and penalties imposed on individual executives. Vigilance is needed in the face of this enforcement atmosphere and companies need to take measures to avoid antitrust violations.