Plenary 3: Case Resolution (Relating to Hypothetical) 2012 ICN Cartel Workshop P a n a m a C i t y , P a n a m a , T h u r s d a y , O c t o b e r 4 th, 2 0 1 2 Lisa M. Phelan Chief of the National Criminal Enforcement Section (NCES) United States Department of Justice, Antitrust Division The views expressed in this presentation are strictly my own and do not necessarily reflect the views of the United States Department of Justice. Overview of the Case Resolution Method in the United States Criminal System All hardcore cartel offenses (price fixing, bid rigging, customer and market allocation) are prosecuted as criminal offenses. • Both corporations and individual executives are prosecuted. • Numbers for 2011 & 2012 of Corporate and Individual Cases Prosecuted: • Overview of the Case Resolution Method in the United States Penalties • • • Corporations • Corporations are subject to a max $100 million fine under Sherman Act statute OR twice the gain or loss caused by the conduct. • More than 20 companies have paid over $100 million in fines. The maximum fine to date is $500 million. Individual Executives • Individual executives are subject to up to 10 years in prison. • To date, the maximum sentence imposed is 4 years. Determination of Penalties • The level of penalty is determined by the volume of commerce affected by the cartel. • The US Sentencing Guidelines set certain standard fine and jail term levels, depending on VOC and certain aggravating and mitigating factors. Overview of the Case Resolution Method in the United States 2 Ways a Criminal Case is Prosecuted 1. Admission of guilt results in a Plea Agreement • • • • A corporation or executive can admit guilt and agree to cooperate fully with the government’s investigation. In that circumstance the USDOJ will file a charging document called a ‘Criminal INFORMATION.’ Typically a plea agreement, signed by the defendant and the USDOJ, will be filed with the court at the same time the Information is filed. This resolves the case on agreed terms. Sometimes the parties agree to a specific fine amount (for a corporation) or jail sentence (for an individual), and the court must accept and impose that amount or the deal is void. For other plea agreements, the parties agree on the facts of the case, and the court decides the level of penalty. Overview of the Case Resolution Method in the United States 2 Ways a Criminal Case is Prosecuted 2. Indictment and Jury Trial • If a corporation or individual does not admit guilt for cartel conduct, the USDOJ will ask a grand jury (23 private citizens) to INDICT the defendant. • If indicted, a corporation or individual will have a trial in front of a judge and a jury of 12 private citizens. • During a trial, the USDOJ will call witnesses, play tape recordings, and show the jury documents that evidences the cartel’s existence and that the defendant participated in the cartel. • The jury must find the defendant guilty beyond a reasonable doubt in order to convict the corporation and/or the individual. Overview of the Case Resolution Method in the United States Cooperative Non-Cooperative Company admits guilt and wants to cooperate with USDOJ’s Investigation. Company DOES NOT admit guilt and thus won’t cooperate with USDOJ’s Investigation. USDOJ will ask a Grand Jury to Indict the company. Criminal Information and Plea Agreement are filed with the court. If indicted the company will stand trial. Fine is determined either by the company and government or strictly by the court. To be deemed guilty, the jury must find the defendant guilty ‘beyond a reasonable doubt.’ Treatment of Hypothetical Case CropPro : the first leniency applicant before the initiation of the Antitrust Division’s case. AgForce: has indicated its intent to cooperate with the investigation. It must plead guilty to a criminal Sherman Act charge. RuralPro: Refuses to cooperate or admit guilt. Treatment of Hypothetical Case CropPro : the first leniency applicant before the initiation of the Antitrust Division’s case. • • The evidence submitted by CropPro was sufficient for it to receive the conditional amnesty letter. No other applicants for leniency will be accepted for this conspiracy. It must meet the requirements of the leniency program, including making RESTITUTION. It will NOT however be criminally charged, nor will it’s executives, if they cooperate. Treatment of Hypothetical Case AgForce: has indicated its intent to cooperate with the investigation. It must plead guilty to a criminal Sherman Act charge. • • • • • It will be subject to pay a fine based on its U.S. affected VOC, and pursuant to the U.S. Sentencing Guidelines. It’s fine can be reduced if it gives significant cooperation – average is 30-35% for a ‘second-in.’ The scope of the charge may be limited to only what the Division already learned from CropPro. One or more executives will be ‘carved out’ of the corporate plea agreement and may be separately prosecuted. It can further reduce its fine level if it brings new ‘Amnesty Plus’ matters to the Division. Indictment of RuralPro RuralPro: Refuses to cooperate or admit guilt. • • • • • • • Will be recommended for Indictment to a Federal Grand Jury. If indicted by the Grand Jury, it will stand trial. One or more of its executives (Amato? Trereira?) may be indicted as well. If convicted, will ask court to impose a maximum fine based on conspirators’ VOC and US Sentencing GLs. Subject to fine based on revenues of ALL cartel members. Individuals likely subject to jail term of several years. If individual executives are outside of US jurisdiction and they refuse to come to the US for trial, they will be placed on Interpol Red Notice.