More Guilty Pleas in Marine Hose Price Fixing Case

A Milan, Italy-based marine hose manufacturer and the former president of its former US subsidiary have agreed to plead guilty and pay more than US$2 million in criminal fines for participating in a global price fixing conspiracy. The former subsidiary president had also agreed to serve time in prison. Furthermore, an Italian executive of another marine hose manufacturer located in Veniano, Italy has also agreed to plead guilty for participating in the same conspiracy.

A one-count felony charge was filed today in US District Court in West Palm Beach, Florida against Manuli Rubber Industries SpA (Manuli) and Robert L. Furness, the former president of Manuli’s former Florida based subsidiary. Under the terms of the plea agreements, which are subject to court approval, Manuli has agreed to pay a criminal fine of $2 million, and Furness has agreed to serve 14 months in prison and pay a $75,000 criminal fine. Both Manuli and Furness have also agreed to cooperate fully in the Department’s ongoing antitrust investigation. Manuli is the first corporation to be charged in the investigation.

Giovanni Scodeggio, an Italian citizen who is the manager of Parker ITR S.r.l.’s Oil & Gas Business Unit, which is responsible for the sale of marine hose, was charged in a separate one-count felony information today in US District Court in Houston, Texas. Under the terms of his plea agreement, which is subject to court approval, Scodeggio has agreed to let the court determine his sentence, to pay a $20,000 criminal fine, and to cooperate with the Department’s ongoing antitrust investigation. Scodeggio was arrested and first charged by a criminal complaint in May 2007.

“The cases filed today follow the prosecution of multiple participants in the marine hose conspiracy,” said Thomas O. Barnett, assistant Attorney General in charge of the Department’s Antitrust Division. “Those who target US businesses and consumers with their price-fixing schemes will be brought to justice.”

Both Manuli and Furness are charged with participating in the conspiracy from at least as early as 2000 until as late as May 2007. Scodeggio is charged with participating in the conspiracy from at least as early as January 2007 until as late as May 2007.

Three other Manuli executives have already been charged for their roles in the conspiracy. Charles J. Gillespie, a former regional sales manager, pleaded guilty in May 2008 to a charge stemming from his role in the conspiracy. Gillespie has yet to be sentenced. Francesco Scaglia, the deputy manager of Manuli’s Oil & Marine Division, and Val M. Northcutt, another regional sales manager, were indicted in September 2007 in the Southern District of Florida for their roles in the conspiracy. The case is currently set to go to trial in West Palm Beach, Florida, in October 2008.

Eight foreign executives, including Scaglia and Scodeggio, were arrested on May 2, 2007, in Houston and San Francisco and charged for their role in the marine hose cartel, following a cartel meeting in Houston. On Dec. 12, 2007, two of those executives, Bryan Allison and David Brammar, of Dunlop Oil & Marine Ltd., a manufacturer of marine hose located in Grimsby, Lincolnshire, pleaded guilty to participating in the marine hose conspiracy. Under the terms of their plea agreements, Allison was sentenced to pay a $100,000 criminal fine and agreed to serve 24 months in prison and Brammar was sentenced to pay a $75,000 criminal fine and agreed to serve 20 months in prison. Another arrested executive, Peter Whittle, formerly a Dunlop employee and now the sole proprietor of PW Consulting (Oil & Marine) Ltd., pleaded guilty for his leadership role in the conspiracy in December 2007, was sentenced to pay a $100,000 criminal fine, and agreed to serve 30 months in prison.

Allison, Brammar and Whittle were also arrested and criminally charged with cartel offences by UK authorities. On June 11, 2008, the UK Crown Court sentenced Allison to serve 36 months in jail, Brammar to serve 30 months in jail, and Whittle to serve 36 months in jail. The US plea agreements in effect provided for concurrent prison sentences in the US and in the UK. Thus, because the UK prison sentences were longer than the sentences recommended in the US plea agreements, the defendants will not be required to serve prison sentences in the United States.

Executives with Trelleborg Industrie S.A.S., Christian Caleca and Jacques Cognard, pleaded guilty to charges stemming from their roles in the conspiracy. In December 2007, each was sentenced to serve 14 months in prison. Caleca was sentenced to pay a $75,000 criminal fine and Cognard was sentenced to pay a $100,000 criminal fine.

In May 2007, Misao Hioki, an executive involved in the sale of marine hose for Bridgestone Corporation in Japan, was charged for his involvement in the conspiracy. The charges involving Hioki are pending in US District Court in the Southern District of Florida. In addition, Uwe Bangert, a German national, was indicted on July 19, 2007, for his participation in the marine hose cartel. A trial date has not been set.