On April 4, 2014, the United States Department of Justice's
Antitrust Division announced the first successful extradition of a
foreign national to the United States to stand trial for alleged US
criminal antitrust law violations. Romano Pisciotti, an Italian
national and a former executive with Parker ITR Srl, headquartered
in Italy, has arrived in Miami, Florida and will face charges under
the Sherman Act for allegedly participating in an international
cartel involving sales of marine hoses. Pisciotti, who has been
under indictment in the United States since 2010, was extradited
from Germany.
Although Department of Justice (DOJ) has previously secured the
arrest of foreign nationals at US borders, and on one prior
occasion successfully extradited a foreign national to the United
States based on obstruction of justice charges relating to an
antitrust investigation, this is the first time that any foreign
national has been extradited to the United States for an antitrust
charge. DOJ's announcement demonstrates its commitment to
pursuing criminal prosecution of antitrust offenders wherever they
may be found. It also emphasizes the risks that such individuals
face when they travel while under indictment.
Background
Criminal prosecution of individuals is an essential component of
DOJ's cartel enforcement program. Over the last two decades,
DOJ has increasingly focused its investigations on international
cartels involving foreign companies. DOJ has made it high priority
to hold foreign nationals living outside the United States
accountable for violations of the US antitrust laws.
DOJ may use information provided by whistleblowers, cooperating
with DOJ (typically under its corporate or individual leniency
programs), to identify and arrest alleged antitrust violators
visiting the United States on business trips. In 2007, DOJ arrested
seven British, French, and Italian executives attending an energy
industry convention in Houston to face charges in connection with
its marine hose investigation—the same one that has now led
to Pisciotti's extradition. DOJ alleges that from roughly 1999
to 2007, several international companies conspired to rig bids for
marine hose procurements.
Even absent advance information about visits to the United States,
DOJ can impose a border watch to detain individuals whenever they
might enter the country. For example, in July 2011, an executive of
auto lights manufacturer Eagle Eyes Traffic Industrial and
Taiwanese national, Homy Hong-Ming Hsu, was arrested and held for
trial when his plane touched down at Los Angeles International
Airport en route to Mexico.
DOJ can also seek extradition of individuals from their home
countries. Its likelihood of success depends on whether the home
country has an extradition treaty with the United States, the
content of the home country's extradition laws, and, in some
cases, the political will of the home country to enforce those laws
under the particular circumstances. Extradition commonly requires
"dual criminality," that is the conduct alleged to
violate US antitrust laws must also constitute a crime in the
individual's home country. For example, in March 2010, Ian
Norris, a UK national and the former CEO of Morgan Crucible, was
extradited to the United States to stand trial for allegedly
obstructing and conspiring to obstruct an antitrust investigation
of carbon component manufacturers. DOJ was unable to extradite
Norris to face US antitrust charges because antitrust violations
were not criminal offenses in the United Kingdom at that time (they
now are). Conduct amounting to conspiracy to obstruct, on the other
hand, was a crime in both the United States and the United Kingdom.
Norris was later convicted of conspiracy to obstruct justice and
sentenced to 18 months in US prison.
DOJ, however, has not yet obtained extradition of any foreign
national from his or her home country to face antitrust charges in
the United States. Some nations' laws prohibit extradition of
their own citizens. For example, although some forms of bid rigging
are illegal under German criminal law (as bid rigging usually is in
the United States), and would thus meet the dual criminality
requirement, German constitutional law generally prohibits
extradition of German citizens to the United States.
Pisciotti had been "carved out" of his former
employer's guilty plea, meaning that DOJ had specifically
reserved the right to prosecute him. DOJ obtained an indictment
against him personally on August 26, 2010, but kept it secret by
filing it under seal. DOJ apparently put Pisciotti on
Interpol's Red Notice, asking participating countries to hold
Pisciotti for extradition.
Pisciotti likely faced less risk of extradition from his home
country of Italy, because anticompetitive conduct is generally not
a criminal offense there. But while returning from a business
assignment in Nigeria, he landed in Germany for his connecting
flight to Italy. Because he was on Interpol's Red Notice, he
was detained for potential extradition to the United States. The
indictment was unsealed on August 6, 2013, following
Pisciotti's arrest in Germany. As a non-German citizen, he was
subject to potential extradition under German law. Pisciotti sought
to avoid extradition by claiming that extradition would violate
European law prohibiting discrimination based on Member State
nationality, but his claim was rejected by a German court.
(Pisciotti is continuing to pursue his discrimination claims
against Germany, seeking monetary damages, but whatever the
ultimate outcome of that dispute, he is likely to remain in the
United States through the resolution of his criminal antitrust case
and to serve time in US prison if convicted.)
Implications for Future Cases
Pisciotti's extradition, like that of Ian Norris, demonstrates
that DOJ is prepared to pursue aggressively antitrust wrongdoers
for prosecution in the United States, including foreign nationals
living abroad. But it does not suggest that foreign countries are
necessarily changing their approach to determining whether to
extradite antitrust violators, especially when it comes to their
own nationals.
Pisciotti's case and several others do graphically illustrate
the risks fugitives from US antitrust charges face when they choose
to travel from their home countries. In criminal cartel cases,
counsel routinely advise clients who are known to be under
indictment (or may be under sealed indictment) to refrain from
international travel. But that is easier said than done, especially
for senior executives at international companies, who may have
difficulty doing their jobs without leaving their home countries.
Despite the risks, some individuals known to be wanted for US
antitrust violations have apparently continued to travel
internationally. Pisciotti's extradition, like Hsu's
arrest, may cause such individuals to reconsider that choice.
Pisciotti's extradition could also create additional incentives
to voluntarily come to the United States to address antitrust
charges, by contesting the charges or pleading guilty. Becoming a
fugitive from US antitrust prosecution and a life-long restriction
on international travel can impose significant personal and
professional burdens. In addition, if arrested while a fugitive,
the individual is likely to serve a longer sentence, will generally
serve that sentence at a higher security prison facility, and will
be barred from returning to the United States following release
from prison. On the other hand, by pleading guilty, the individual
can often obtain a reduced sentence, serve that sentence at a
minimum security work camp, and continue to travel to the United
States following release from prison as a result of a memorandum of
understanding between the DOJ's Antitrust Division and its
former Immigration and Naturalization Service (now administered by
the Department of Homeland Security's US Immigration and
Customs Enforcement arm). In some cases, individuals may even
choose to come to the United States to stand trial, rather than
live their lives as fugitives. Several Taiwanese, German and Dutch
executives have made that choice—some were acquitted, others
convicted and some pled guilty before verdict.
DOJ vigorously pursues individual antitrust wrongdoers located
outside the United States, and is aggressively using Interpol's
Red Notice, border watches, and other tools available to do so.
Extradition laws are complicated, vary by country, may depend on
the nationality of the individual, and can sometimes be
inconsistently applied, especially where they leave room for
discretion. When traveling, fugitives from US antitrust charges
must worry about potential extradition from their home country,
destination country, and all countries in which they may connect
along the way. Moreover, notwithstanding the best laid travel
plans, there is always a risk that a plane may land in an
unexpected country due to weather, mechanical difficulties, or
other unanticipated circumstances. Pisciotti's extradition may
cause individuals in similar circumstances to think twice before
venturing from their home countries, or to reconsider whether to
refuse voluntarily to come to the United States to face charges in
the first place.
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