On August 5, two Denso Corp executives were sentenced to over a
year in prison following their guilty plea to participating in a
conspiracy to fix prices in violation of the antitrust laws. Yuji
Suzuki, a former senior manager in the Toyota Parts Division, was
sentenced to 16 months in prison and Hiroshi Watanabe, a former
group leader in the same division, was sentenced to 15 months.
Their conspiracy to rig bids and fix prices involved electronic
control units and heater control panels sold to Toyota Motor
Company. Their part in the conspiracy spanned 3 years.
Previously, two other Denso executives have plead guilty to
antitrust violations. Norihiro Imai, a former assistant manager of
the Toyota Sales Division, was sentenced to 12 months and one day
in prison and a $20,000 fine and Makoto Hattori was sentenced to 14
months in prison and a $20,000 fine. In addition, Denso agreed to
pay $78 million in 2012 to settle the antitrust investigation of
Indeed, the auto parts antitrust investigation has spawned a
number of criminal prosecutions of individuals. For example, six
Yazaki executives were criminally prosecuted receiving sentences
ranging from 14-24 months in prison and fines of $20,000 each and
three Furukawa Electric executives were criminally prosecuted and
received sentences ranging from 12-18 months in prison and a fine
of $20,000 each. To date, the DOJ has garnered guilty pleas from
nine companies and 14 executives.
The DOJ views the prosecution of individuals as one of its best
weapons to deter unlawful conduct. Companies act through their
executives and in cases where the companies have the ability to pay
hefty fines, the threat of prison sentences against individuals may
be a much bigger stick. Attorneys representing individuals in these
cases need to be mindful of this policy incentive. And, companies
under investigation, need to get separate counsel for their
individual executives at the first sign that they may have engaged
in wrongful conduct. Such action will protect both the company and
its individual executives.
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King Drug involved the settlement of patent infringement litigation over a brand-name drug used to treat epilepsy and bipolar disorder, Lamictal®, brought by GSK against Teva Pharmaceuticals under the framework of the Hatch-Waxman Act.
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