Former Top Executive of Japanese Automotive Parts Manufacturer Indicted for Role in Conspiracy to Fix Prices
|U.S. Department of Justice June 05, 2014|
WASHINGTON—A Detroit federal grand jury returned a one-count indictment against a former top executive of a Japanese manufacturer of automotive parts for his participation in a conspiracy to fix prices of seatbelts, the Department of Justice announced today.
The indictment, filed today in the U.S. District Court for the Eastern District of Michigan, charges Gikou Nakajima, a former executive at Takata Corp., with participating in a conspiracy to suppress and eliminate competition in the automotive parts industry by agreeing to rig bids for and to fix, stabilize, and maintain the prices of seatbelts sold to Toyota Motor Corp., Honda Motor Company Ltd., Nissan Motor Co. Ltd., Mazda Motor Corp., Fuji Heavy Industries Ltd.—more commonly known by its brand name, Subaru—and/or certain of their subsidiaries for installation in vehicles sold in the United States and elsewhere. Nakajima served as director of customer relations division at Takata, the highest-level global sales executive at the company, from June 2005 until at least June 2009.
“Today’s indictment demonstrates that the Antitrust Division continues to hold accountable executives who collude with their competitors,” said Brent Snyder, Deputy Assistant Attorney General for the Antitrust Division’s criminal enforcement program. “The division will not tolerate executives participating in—and directing their subordinates to participate in—conspiracies to raise the prices on automotive parts that are essential to the safety of U.S. consumers.”
The indictment alleges, among other things, that from at least as early as September 2005 and continuing until June 2009, Nakajima and others attended meetings with co-conspirators and reached collusive agreements to rig bids, allocate the supply, and fix the prices of seatbelts sold to the automobile manufacturers. It alleges that Nakajima participated directly in the conspiratorial conduct and that he directed, authorized, and consented to his subordinates’ participation.
Takata is a Tokyo-based manufacturer of automotive parts, including seatbelts. Takata supplies automotive parts to automobile manufacturers in the United States, in part, through its U.S. subsidiary, TK Holdings Inc., located in Auburn Hills, Michigan. Takata pleaded guilty on December 5, 2013, for its involvement in the conspiracy and was sentenced to pay criminal fine of $71.3 million. Four other executives from Takata have pleaded guilty and have been sentenced to serve time in a U.S. prison and to pay criminal fines for their roles in the conspiracy.
Including Nakajima, 35 individuals have been charged in the government’s ongoing investigation into price fixing and bid rigging in the auto parts industry, 24 of whom have pleaded guilty or agreed to plead guilty. Of those, 22 have been sentenced to serve prison terms ranging from a year and one day to two years. Additionally, 27 companies have pleaded guilty or agreed to plead guilty and have agreed to pay a total of more than $2.3 billion in fines.
Nakajima is charged with price fixing in violation of the Sherman Act, which carries a maximum penalty of 10 years in prison and a $1 million criminal fine for individuals. The maximum fine may be increased to twice the gain derived from the crime or twice the loss suffered by the victims of the crime, if either of those amounts is greater than the statutory maximum fine.
Today’s indictment is the result of an ongoing federal antitrust investigation into price fixing, bid rigging and other anticompetitive conduct in the automotive parts industry, which is being conducted by four of the Antitrust Division’s criminal enforcement sections and the FBI. Today’s charge was brought by the Antitrust Division’s Washington Criminal I Section and the FBI’s Detroit Field Office, with the assistance of the FBI Headquarters’ International Corruption Unit. Anyone with information on price fixing, bid rigging, and other anticompetitive conduct related to other products in the automotive parts industry should contact the Antitrust Division’s Citizen Complaint Center at 888-647-3258, visit www.justice.gov/atr/contact/newcase.html, or call the FBI’s Detroit Field Office at 313-965-2323.