In June 2013, Romano Pisciotti, an Italian national, was arrested at Frankfurt Airport in Germany while in transit from Nigeria to Italy. His arrest was executed upon request of the U.S. Department of Justice's Antitrust Division (DOJ) for price-fixing charges, pursuant to a bilateral extradition treaty between Germany and the United States. On April 3, 2014, Pisciotti was extradited to the United States to appear before a U.S. District Court in Florida. Two weeks later, he pleaded guilty and was sentenced to serve 24 months in prison and to pay a $50,000 fine, but was credited the nine-month period already served in Germany pending the extradition. He also must cooperate with the DOJ in its ongoing probe of the marine hose industry.

For more than 20 years, until he left the company in 2006, Pisciotti was a manager at Parker ITR. In 2007, it was uncovered that Parker ITR had participated in a worldwide cartel with respect to marine hoses. The cartel agreed to allocate shares of the marine hose market, to use a price list for marine hose, and not to compete for customers with other sellers either by not submitting prices or bids or by submitting intentionally high prices or bids. Pisciotti and his co-conspirators would also provide information gleaned from customers about upcoming marine hose jobs to another conspirator, who would serve as a coordinator. The coordinator would act as a clearinghouse for bidding information, and was paid by the manufacturers for coordinating the conspiracy.

Antitrust proceedings in the United States, European Union, United Kingdom, Brazil and Canada ensued, where the companies involved in the cartel received multimillion-dollar fines. In addition, several individuals were sent to prison by the courts in the United States and the United Kingdom, including Pisciotti's successor at Parker ITR. Pisciotti was also indicted for his participation in the cartel; however, he managed to avoid prosecution by remaining outside the U.S. until his arrest in Frankfurt.

As in most extradition treaties, the applicable rules between Germany and the United States require "dual criminality," meaning that the conduct in question must constitute a criminal offense in both jurisdictions. Unlike bid-rigging, participation in a cartel in general is not a criminal offense under German law. Pisciotti's alleged cartel conduct included bid-rigging, which made his extradition to the United States possible. The case illustrates how the increased criminalization of cartels around the globe extends the reach of prosecutors in the United States and elsewhere. In fact, the marine hoses cartel already made headlines in 2008 when antitrust enforcers in the United Kingdom secured the first-ever criminal sentences against three British citizens who had participated in the cartel. At the time, the close cooperation between antitrust enforcers in the United Kingdom and the United States allowed for the transfer of the individuals from the United States, where they had originally been arrested, to the United Kingdom, where they were convicted with prison sentences of between 20 and 30 months.

Pisciotti has since complained before the German courts and the European Commission that his extradition was in breach of fundamental EU law principles that prohibit discrimination between a country's own nationals and citizens from other EU Member States. Indeed, a German citizen in the same situation as Pisciotti would not have been extradited because of the protections granted by the German Constitution to Germans but not to foreigners. While the German courts have rejected the complaint, the Commission is still assessing its merits. In addition, Pisciotti is understood to have brought complaints against Germany before the European Court of Human Rights, the Italian courts and the public prosecutor in Rome. The European Court of Human Rights reportedly has rejected the case.

Pisciotti may be permitted to serve his remaining prison term in Italy under the DOJ's International Prisoner Transfer Program, if an Italian public prosecutor or the Italian government so requests, and if certain other requirements are satisfied. It is understood that the DOJ's Criminal Division would not oppose such a request. The DOJ has previously approved the transfer of at least three other European citizens convicted on antitrust charges, including the case of Christian Caleca, a French national also involved in the marine hoses cartel who was sentenced in 2007 to serve 14 months in prison. When Caleca returned to France, he was subsequently released by the French authorities on the grounds that his conduct had not been a crime in France.

The DOJ case file is available here.

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