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A trio of automotive executives are alleged to have conspired to rig bids and fix prices for the sale of autobody sealing products.

By Jeff Sanford

Washington, DC -- October 14, 2015 -- A federal grand jury in Covington, Kentucky, has returned an indictment against a group of Japanese automotive executives alleged to have participated in a conspiracy to fix prices and rig bids for the sale of automotive body sealing products sold in the United States.

The indictment was filed in the U.S. District Court of the Eastern District of Kentucky. It charges Keiji Kyomoto, Mikio Katsumaru and Yuji Kuroda—all Japanese nationals—with conspiring to rig bids for and fix the prices of body sealing products sold to Honda Motor Company Ltd., Toyota Motor Corp. and certain of their subsidiaries and affiliates for installation in vehicles manufactured and sold in the United States and elsewhere. The automotive body sealing products involved consist of body-side opening seals, door-side weather-stripping, glass-run channels, trunk lids and other smaller seals, which are installed in automobiles to keep the interior dry from rain and free from wind and exterior noises.

“These executives conspired for years with their competitors to fix the prices of body sealing products sold to Honda and Toyota and installed in US cars,” said Deputy Assistant Attorney General Brent Snyder of the Justice Department’s Antitrust Division. “Today’s indictment is another reminder that antitrust violations are not just corporate offenses but also crimes by individuals. The Antitrust Division will continue to vigorously prosecute executives who orchestrate their companies’ efforts to break the law.”

“The FBI is committed to aggressively investigating individuals who engage in criminal conduct that corrupts the global marketplace,” said Special Agent in Charge Howard S. Marshall of the FBI’s Louisville Division. “We will continue our work with the Department of Justice Antitrust Division to uncover schemes aimed at creating an unfair competitive advantage by way of price fixing, bid rigging or other illegal means.”

The indictment alleges that Kyomoto, Katsumaru and Kuroda participated in the conspiracy from early as September 2003 until at least October 2011. For most of this period, Kyomoto resided in the US and served as president of an unnamed joint venture with offices in Indiana and Michigan, which manufactured and sold automotive body sealing products.

Katsumaru, who resided in Japan, served in multiple managerial positions during the conspiracy period, including manager of the sales and marketing division, for an unnamed company based in Hiroshima, Japan, that partially owned the joint venture and also manufactured and sold automotive body sealing products. Kuroda, who resided in Japan, served as a sales branch manager at the same Hiroshima-based company for the entirety of the charged period.

According to the indictment, Kyomoto, Katsumaru and Kuroda each instructed subordinates at their respective companies to communicate with co-conspirators at other companies in order to allocate sales of, rig bids for, and fix the prices of automotive body sealing products; were aware that employees under their supervision were engaging in such communications; and condoned such communications. The indictment further alleges that Kyomoto attended meetings with co-conspirators during which Kyomoto and the co-conspirators reached agreements regarding sales of automotive body sealing products to Honda and Toyota. The indictment also alleges that Katsumaru and Kuroda instructed and encouraged certain employees at their company to destroy evidence of the conspiracy. Each individual faces a maximum penalty to 10 years in prison and a $1 million criminal fine if convicted.

Today’s charge is the result of an ongoing federal antitrust investigation into price fixing, bid rigging and other anticompetitive conduct in the automotive parts industry. The investigation is being conducted by the Antitrust Division’s criminal enforcement sections and the FBI. A total of 58 individuals and 37 companies have been charged and have agreed to pay more than $2.6 billion in criminal fines. This indictment was brought by the Antitrust Division’s Chicago Office and the FBI’s Louisville Field Office, Covington Resident Agency, with the assistance of the FBI’s International Corruption Unit and the U.S. Attorney’s Office of the Eastern District of Kentucky.

 

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