A British marine hose manufacturer agreed to plead guilty and pay $4.54 million in criminal fines for its part in a price-fixing conspiracy involving marine hose used to transfer oil between tankers and storage facilities, the US Department of Justice announced on Dec. 1.
Dunlop Oil & Marine Ltd. of Grimsby, England, also agreed to cooperate fully with DOJ's ongoing investigation of the scheme which also aimed to rig bids and allocate market shares of marine hose sold in the United States and elsewhere, DOJ's antitrust division said. It noted that the company was the second to be charged and its agreement is subject to federal court approval.
"This conspiracy victimized companies involved in the offshore extraction and transportation of petroleum and the US Department of Defense. Ultimately, US consumers were left holding the tab," said Deborah A. Garza, acting assistant US attorney general in charge of the department's antitrust division.
Dunlop allegedly was part of the conspiracy from early 1999 until late May of 2007, DOJ said. It said that company officials attended or participated in meetings regarding the sale of marine hose at which market shares were allocated, prices were fixed and noncompetitive arrangements were developed.
DOJ said that Dunlop executives Bryan Allison and David Brammar pleaded guilty in December 2007 to participating in the marine hose conspiracy. Under terms of their plea agreements, Allison agreed to pay a $100,000 criminal fine and serve 24 months in prison, and Brammar agreed to pay a $75,000 criminal fine and serve 20 months in prison.
Peter Whittle, a former executive who now is sole proprietor of PW Consulting (Oil & Marine) Ltd., also pleaded guilty in December 2007 for his leadership role in the conspiracy, according to DOJ. He was sentenced to pay a $100,000 criminal fine and agreed to serve 30 months in prison.
Also charged in UK
UK authorities also arrested and criminal charged Allison, Brammar and Whittle with cartel offenses, DOJ said. On Nov. 14, the UK Court of Appeal sentenced Allison to 24 months in jail, Brammar to 20 months and Whittle to 30 months. The US plea agreements provided for concurrent prisons sentences in the two countries so the defendants were not required to serve prison sentences in the United States because their UK sentences either matched or exceeded their recommended US sentences, DOJ said.
It said that Uwe Bangert, a German national and former executive with Dunlop's former parent company, Phoenix AG, was indicted on July 19, 2007, for his alleged participation in the conspiracy. A trial date has not been set.
Eight foreign executives, including Allison, Brammar and Whittle, were arrested on May 2, 2007, in Houston and San Francisco and charged for their roles in the marine hose cartel following a cartel meeting in Houston, DOJ said.
It said that Manuli Rubber Industries SpA and two former executives pleaded guilty and reached tentative settlements. Two managers in Manuli's oil and marine division also were charged but were acquitted on Nov. 11. Trelborg Industrie SAS officials and the manager of Parker ITR's oil and gas business unit also pleaded guilty, DOJ said. A Bridgestone Corp. marine hose sales executive also was charged, it added.
DOJ said that the investigation has been conducted by the National Criminal Enforcement Section in its antitrust division, the Defense Criminal Investigative Service in DOD's Office of Inspector General, the US Navy Criminal Investigative Service and the Federal Bureau of Investigation. Law enforcement agencies from multiple foreign jurisdictions are investigating or assisting in the ongoing matter, it said.
Contact Nick Snow at [email protected]