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Japanese Supplier Admits Price Fixing

Will pay $18 fine in Justice Dept. probe.

by on Oct.31, 2012

Supplier Tokai Rika likely wasn't delighted at the reality of being convicted for price-fixing.

A Japanese supplier has pled guilty in a probe by the U.S. Justice Department into price fixing in the auto industry, which continues to grow and has now snared nine different companies on three different regions of the world.

Nagoya, Japan-based Tokai Rika Co. Ltd. has agreed to plead guilty and to pay a $17.7 million criminal fine for its role in a conspiracy to fix prices of heater control panels installed in cars sold in the United States and elsewhere, the Department of Justice announced.

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Tokai Rika has also agreed to plead guilty to a charge of obstruction of justice related to the investigation of the antitrust violation. The company’s American arm is based in Plymouth, and it also has units in Battle Creek and Jackson.

According to a two-count felony charge filed in U.S. District Court for the Eastern District of Michigan in Detroit, Tokai Rika engaged in a conspiracy, by agreeing during meetings and conversations to rig bids for, and to fix, stabilize and maintain the prices of heater control panels sold to Toyota in the United States and elsewhere, on a model-by-model basis.

According to the court document, Tokai Rika and its co-conspirators carried out the conspiracy from at least as early as September 2003 until at least February 2010 when the probe began.

Tokai Rika manufactures and sells a variety of automotive parts, including heater control panels. Heater control panels are located in the center console of an automobile and control the temperature of the interior environment of a vehicle.

“The conspirators used code names and chose meeting places and times to avoid detection,” said Scott D. Hammond, deputy assistant attorney general of the Antitrust Division’s criminal enforcement program.

“They knew their actions would harm American consumers, and attempted to cover it up when caught. The division will continue to hold accountable companies who engage in anti-competitive conduct and who obstruct law enforcement,” Hammond said.

Hammond said after the company and its executives and employees became aware that the FBI had executed a search warrant on Tokai Rika’s U.S. subsidiary, a company executive directed employees to delete electronic data and destroy paper documents likely to contain evidence of antitrust crimes in the United States and elsewhere.

Some of the deleted electronic data and destroyed paper documents were non-recoverable, he said.

“Those who engage in price fixing and obstruction of legal process will face severe consequences for their illegal acts,” said Robert D. Foley III, special agent in charge of the FBI’s Detroit Division.

As part of the plea agreement, which will be subject to court approval, Tokai Rika has agreed to cooperate with the department’s ongoing investigation.

So far, nine companies, including Tokai Rika, and 11 executives have pleaded guilty or agreed to plead guilty in the department’s ongoing investigation into price fixing and bid rigging in the auto parts industry. Furukawa Electric Co. Ltd., DENSO Corp., Yazaki Corp., G.S. Electech Inc., Fujikura Ltd., Autoliv Inc. and TRW Deutschland Holding GmbH pleaded guilty in the probe, which has ranged across three continents.

They have agreed to pay a total of more than $790 million in criminal fines. Nippon Seiki Co. Ltd., has agreed to plead guilty and awaits arraignment and sentencing.

The 11 executives have been sentenced to pay criminal fines and to serve jail sentences ranging from a year and a day to two years each.

 

 

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