Taiwan Aftermarket Auto Lights Manufacturer and Its Chairman Indicted for Alleged Participation in Price-Fixing Conspiracy

December 1, 2011

The Federal Bureau of Investigation (FBI) on November 30, 2011 released the following:

“WASHINGTON— A federal grand jury in San Francisco returned a superseding indictment yesterday against a Taiwan aftermarket auto lights manufacturer, its U.S.-based subsidiary distributor and its chairman for participating in an international conspiracy to fix the prices of aftermarket auto lights, the Department of Justice announced. Aftermarket auto lights are incorporated into an automobile after its original sale, often as repairs following a collision or as accessories and upgrades.

The one-count felony superseding indictment, filed today in U.S. District Court in San Francisco, charges that Eagle Eyes Traffic Industrial Co. Ltd., which is based in Tainan County, Taiwan, participated in a conspiracy to fix the prices of aftermarket auto lights in the United States and elsewhere from about July 2001 to about September 2008. The indictment also charges Eagle Eyes’ highest-ranking officer, Chairman Yu-Chu Lin, aka David Lin, for his participation in the conspiracy from about July 2001 to about September 2008. Lin is a resident of Taiwan. E-Lite Automotive Inc., Eagle Eyes’ U.S. subsidiary based in Chino, Calif., is also charged in the indictment for its participation in the conspiracy from about March 2006 to about September 2008. Today’s indictment supersedes an indictment filed on July 19, 2011, against the second-highest-ranking officer of Eagle Eyes, Vice Chairman Homy Hong-Ming Hsu.

“The Antitrust Division will continue to crack down on international price-fixing conspiracies that target U.S. businesses and consumers,” said Sharis A. Pozen, Acting Assistant Attorney General in charge of the Department of Justice’s Antitrust Division.

According to the indictment, Eagle Eyes, E-Lite, Lin, Hsu and co-conspirators participated in a conspiracy in which the participants met and agreed to charge prices of aftermarket auto lights according to jointly determined formulas. The participants in that conspiracy issued list price announcements to customers in accordance with the jointly determined price structure, and collected and exchanged information on prices for the purpose of monitoring and enforcing adherence to the conspiracy. The department said that the conspirators met in Taiwan and the United States for their discussions.

Including Eagle Eyes, E-Lite and Lin, four companies and four individuals have been charged to date in connection with the department’s ongoing investigation into the aftermarket auto lights industry. On Nov. 15, 2011, Maxzone Vehicle Lighting Corp., a U.S. distributor of aftermarket auto lights, pleaded guilty and was sentenced to pay a $43 million criminal fine for its participation in the conspiracy. On Oct. 4, 2011, Sabry Lee (U.S.A.) Inc., a U.S. distributor of aftermarket auto lights, pleaded guilty and was sentenced to pay a $200,000 criminal fine for its participation in the conspiracy. On March 29, 2011, Polo Shu-Sheng Hsu, the former president and CEO of Maxzone, was sentenced to serve 180 days in prison and to pay a $25,000 criminal fine for his role in the conspiracy. Chien Chung Chen, aka Andrew Chen, the former executive vice president of Sabry Lee, pleaded guilty for his participation in the conspiracy on June 7, 2011. He is currently scheduled to be sentenced on July 17, 2012.

Eagle Eyes, E-Lite and Lin are charged with price fixing in violation of the Sherman Act which carries a maximum penalty of 10 years in prison and a $1 million fine for individuals and $100 million fine for corporations. The maximum fines may be increased to twice the gain derived from the crime or twice the loss suffered by the victims of the crime, if either of those amounts is greater than the statutory maximum fine.

This case is part of an ongoing joint investigation being conducted by the Department of Justice Antitrust Division’s San Francisco Office and the FBI in San Francisco.”

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Douglas McNabb – McNabb Associates, P.C.’s
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Douglas McNabb and other members of the U.S. law firm practice and write and/or report extensively on matters involving Federal Criminal Defense, INTERPOL Red Notice Removal, International Extradition and OFAC SDN Sanctions Removal.

The author of this blog is Douglas McNabb. Please feel free to contact him directly at mcnabb@mcnabbassociates.com or at one of the offices listed above.


Ninth Taiwanese Executive Charged in Alleged Global Price-Fixing Scheme

October 21, 2010

A federal grand jury in San Francisco returned an indictment against a former executive of a Taiwan thin-film transistor liquid crystal display (TFT-LCD) producer for participating in a global conspiracy to fix prices of TFT-LCD panels, the Department of Justice announced last week.

The indictment, returned in U.S. District Court in San Francisco last Thursday, alleges that Hsin-Tsung Wang participated in a conspiracy to fix the prices of TFT-LCD panels sold worldwide. Wang, a resident of Taiwan and the former vice president of sales and marketing of Chi Mei Optoelectronics Corporation, is charged with participating in the conspiracy from at least as early as September 14, 2001, and continuing at least until December 1, 2006.

However, the fact that the government did not charge Mr. Wang until now conveys the inference that perhaps the government did not have enough evidence to indict Mr. Wang until recently. Most likely, an individual that has already been indicted decided to work with the government in exchange for a lesser sentence, and in doing so, attempted to blame others in the alleged conspiracy.

TFT-LCD panels are used in computer monitors and notebooks, televisions, mobile phones and other electronic devices. By the end of the alleged conspiracy period, the worldwide market for TFT-LCD was valued at $70 billion. Companies directly affected by the LCD price-fixing conspiracy include some of the largest computer and television manufacturers in the world, including Apple, Dell, and Hewlett Packard.

According to the one-count felony charge, Wang and co-conspirators allegedly carried out the conspiracy by agreeing to fix prices of TFT-LCD panels during secret meetings and issuing price quotations in accordance with the agreements reached. As a part of the conspiracy, Wang is also alleged to have exchanged information on sales of TFT-LCD panels for the purpose of monitoring and enforcing adherence to the agreed-upon prices.

Including this filing, 20 executives and eight companies have been charged in the Department’s ongoing investigation into price fixing in the LCD industry. As a result of this investigation, to date, more than $890 million in criminal fines have been obtained.

Wang is charged with violating the Sherman Act, which carries a maximum penalty of 10 years in prison and a $1 million fine for individuals. The maximum fine may be increased to twice the gain derived from the crime or twice the loss suffered by the victims if either of those amounts is greater than the statutory maximum fine.

The Sherman Act was promulgated in response to antitrust violations and it’s goal is to protect a free market. However, the government seems to pick and choose which industries to target and only does so when the violation is obvious.

Douglas McNabb and other members of the firm practice and write extensively on matters involving Federal Criminal Defense, Interpol Litigation, International Extradition and OFAC Litigation.

The author of this blog is Douglas McNabb. Please feel free to contact him directly at mcnabb@mcnabbassociates.com or at one of the offices listed above.

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