FOR IMMEDIATE RELEASE AT
THURSDAY, SEPTEMBER 26, 1996 (202) 616-2771
TDD (202) 514-1888
OHIO EXPLOSIVES CO. AND EXECUTIVE PLEAD GUILTY TO PRICE FIXING
IN EXPLOSIVES INDUSTRY, PAY MORE THAN $7 MILLION
Total Criminal Fines Top $36 Million
WASHINGTON, D.C. -- A Cleveland explosives company and its
Evansville, Indiana regional manager agreed to plead guilty today
and pay more than $7 million in criminal antitrust fines for
conspiring to fix prices and rig bids in the sale of commercial
explosives, the Justice Department announced.
Today's pleas are the result of the Justice Department's
ongoing criminal antitrust investigation of collusion in the
commercial explosives industry. To date, the investigation has
resulted in a total of 13 guilty pleas by 11 corporations and two
individuals, and the assessment of a record $36 million in
criminal fines.
Austin Powder Co. has agreed to pay $7 million in criminal
fines and Thomas F. Mechtenberg has agreed to pay $20,000 in
fines. Mechtenberg also faces up to 10 months in federal prison.
The plea agreements are subject to court approval.
In court papers filed in U.S. District Court in Dallas,
Austin Powder was charged with conspiring with competitors
between 1987 and 1992 in Michigan to fix prices of commercial
explosives and to rig bids that were submitted to certain
customers.
The company was also charged with conspiring to fix prices
between the fall of 1988 and mid-1992 on the sale of certain
commercial explosives in western Kentucky, southern Indiana, and
southern Illinois.
The government charged that Mechtenberg, an Austin Powder
regional manager in western Kentucky from the fall of 1988 to
mid-1992, conspired with Austin Powder's competitors to set the
prices of commercial explosives and rig certain customer bids.
"The Antitrust Division will be unrelenting in its
investigation and punishment of those who choose to undermine
competition by fixing prices or rigging bids," said Anne K.
Bingaman, Assistant Attorney General in charge of the Antitrust
Division.
With sales of approximately $1 billion per year in the
United States, commercial explosives, such as dynamite and ANFO
(ammonium nitrate mixed with fuel oil), are used primarily in the
mining, construction, and oil and gas exploration industries.
Today's cases resulted from a Dallas investigation conducted
by the Antitrust Division's Litigation I Section, which
previously netted guilty pleas from three major explosives
manufacturers--ICI Explosives USA, which agreed to pay a $10
million fine; DYNO NOBEL, which agreed to pay a $15 million fine;
and ETI, which agreed to pay a $950,000 fine. A related
investigation in Pittsburgh resulted in six guilty pleas by
explosives distributors last week. Those companies agreed to pay
a total of $900,000 in fines.
The maximum penalty for a corporation convicted of an
antitrust violation under the Sherman Act is a fine of $10
million, twice the pecuniary gain derived by the corporation from
the crime, or twice the pecuniary loss suffered by the victims of
the crime, whichever is greater.
The maximum penalty for an individual is three years in jail
and a fine of $350,000, twice the pecuniary gain the individual
derived from the crime, or twice the pecuniary loss suffered by
the victims of the crime, whichever is greater.
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