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Wed September 28, 2011
Three corporate executives indicted in compressor price-fixing case
The U.S. Department of Justice announced that a federal grand jury in Detroit has indicted three former executives from a Whirlpool Corporation subsidiary, a Panasonic Corporation, and a Tecumseh Products Company subsidiary for conspiring to fix prices on refrigerant compressors.
The compressors are used in refrigerators and freezers.
From the DOJ's press release:
The indictment, returned today in U.S. District Court in Detroit, charges Ernesto Heinzelmann, former president and chief executive officer of Empresa Brasileira de Compressores S.A. (Embraco), a division of Whirlpool S.A.; Gerson Veríssimo, former president of Tecumseh do Brasil Ltda., a subsidiary of Tecumseh Products Company; and Naoki Adachi, general manager of global sales & SE group, refrigeration devices division at Panasonic Corporation, with conspiring to suppress and eliminate competition by coordinating price increases for refrigerant compressors to customers in the United States and elsewhere.
Sharis A. Pozen, Acting Assistant Attorney General from the DOJ's Antitrust Division said:
“Cracking down on international price fixing cartels has been and will continue to be among the most significant priorities for the Antitrust Division. Our investigation into the refrigerant compressors industry has already resulted in two companies – Panasonic and Embraco North America – pleading guilty and paying a total of $140.9 million in criminal fines. Our investigation is continuing.”
The three are being charged for price fixing under the Sherman Act. The maximum penalty they each face is 10 years in prison and a $1 million fine.
The DOJ reports that their investigation led to guilty pleas in 2010 from Panasonic and Embraco North America Inc:
On Nov. 15, 2010, Panasonic Corporation pleaded guilty and was sentenced to pay a $49.1 million criminal fine, and on Dec.16, 2010, Embraco North America Inc. pleaded guilty and was sentenced to pay a $91.8 million criminal fine.