POST Online Media Lite Edition



 

U.S. says 2 South Korean firms to pay $127 million for bid rigging

Staff Writer |
South Korea-based companies Hyundai Oilbank and S-Oil Corporation have agreed to plead guilty to criminal charges and pay a total of approximately $75 million in criminal fines for their involvement in a bid-rigging conspiracy that targeted contracts to supply fuel to United States Army, Navy, Marine Corps, and Air Force bases in South Korea, the Department of Justice announced.

Article continues below




Hyundai Oilbank and S-Oil have agreed to plead guilty to an antitrust charge contained in a superseding indictment that was unsealed.

The superseding indictment also charges seven individual defendants — associates, managers, and executives of companies that conspired to rig bids for fuel supply contracts — for participating in this bid-rigging conspiracy and in a scheme to defraud the U.S. government.

In separate civil resolutions, Hyundai Oilbank and S-Oil have agreed to pay a total of approximately $52 million to the United States for civil antitrust and False Claims Act violations related to the bid-rigging conspiracy.

These settlements reflect the important role of both Section 4A of the Clayton Act and the False Claims Act to ensure that the United States is fully compensated when it is the victim of anticompetitive conduct.

Pursuant to the Department’s Coordination policy, often labeled the Anti-Piling On policy, the Antitrust Division’s criminal and civil sections and the Civil Division’s Fraud Section worked together effectively to reach coordinated global settlements that were equitable and proportionate to the defendants’ conduct.

Furthermore, both divisions successfully coordinated their efforts to avoid imposing fines, penalties, or damages that were unnecessarily duplicative of each other.

Today, the Department of Justice unsealed a three-count superseding indictment from the U.S. District Court for the Southern District of Ohio that was returned in September 2018.

According to the superseding indictment, the Defense Logistics Agency and the Army and Air Force Exchange Service are two U.S.

Defense Department agencies that contract with South Korean companies to supply fuel to the numerous U.S. military bases throughout South Korea.

Count One charges Hyundai Oilbank, S-Oil, and the seven individual defendants with participating in a combination and conspiracy to suppress and eliminate competition during the bidding process for these fuel supply contracts.

The individual defendants, all residents and citizens of South Korea, are Hee-Soo Kim, Tae Ho Cho, Jiwon Kang, Young-Ho Yoon, Byung Kuk Kim, Byungik Moon, and Eul-Jin Hyung.

Count Two charges Hyundai Oilbank, S-Oil, and the seven individual defendants with participating in a conspiracy to defraud the United States by impairing, obstructing, and defeating the lawful function of the procurement processes for the fuel supply contracts.

As part of its plea agreement with Hyundai Oilbank and S-Oil, the Antitrust Division agreed to move to dismiss Count Two against Hyundai Oilbank and S-Oil upon sentencing.

Count Three charges Hee-Soo Kim with tampering with a witness by use of intimidation, threats, or corrupt persuasion, with the intent to hinder, delay, and prevent communication with a law enforcement officer of the United States.

Hyundai Oilbank and S-Oil have agreed to cooperate with the Justice Department’s ongoing criminal investigation.

The plea agreements are subject to court approval.

The investigation began based on a tip to the Defense Logistics Agency Inspector General (IG) Hotline.

The IG office developed the information, interviewed the complainant, and then referred the case to the Defense Criminal Investigative Service.

An indictment merely alleges that crimes have been committed, and all defendants are presumed innocent until proven guilty beyond a reasonable doubt.

A criminal violation of Section 1 of the Sherman Act carries a maximum sentence of 10 years in federal prison and a criminal fine of $1 million for individuals and a maximum criminal fine of $100 million 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.

A criminal violation of 18 U.S.C. § 371 carries a maximum sentence of 5 years in prison.

Today’s pleas are the fourth and fifth respectively resulting from an ongoing federal investigation into bid rigging, price fixing, and other anticompetitive conduct targeting U.S. Department of Defense fuel supply contracts in South Korea.

The criminal case is being prosecuted by the Antitrust Division’s Washington Criminal I Section and the United States Attorney’s Office of the Southern District of Ohio, in conjunction with the DCIS, the Federal Bureau of Investigation, the Army CID, the Defense Logistics Agency Office of the Inspector General, and the Air Force Office of Special Investigations.

The Department’s Antitrust Division filed a civil antitrust complaint in the U.S. District Court for the Southern District of Ohio, and at the same time filed proposed settlements that, if approved by the court, would resolve the lawsuit against Hyundai Oilbank and S-Oil for their anticompetitive conduct targeting the U.S. military in South Korea.

As a result of this conduct, the United States Department of Defense paid substantially more for fuel supply services in South Korea than it would have had Hyundai Oilbank and S-Oil competed for the fuel supply contracts.

Under Section 4A of the Clayton Act, the United States may obtain treble damages when it has been injured by an antitrust violation.

The proposed settlement provides that Hyundai Oilbank pay $39.1 million and S-Oil pay $12.98 million to the United States to resolve the civil antitrust violations.

In addition to the payments, Hyundai Oilbank and S-Oil have agreed to cooperate with the ongoing civil investigation of the conduct and to abide by antitrust compliance program requirements.

The amount paid by each defendant exceeds the amount of the individual overcharge and reflects the value of defendants’ cooperation commitments and the cost savings realized by avoiding extended litigation.

The payments will also resolve civil claims that the United States has under the False Claims Act against Hyundai Oilbank and S-Oil for making false statements to the government in connection with their agreement not to compete.

The Civil Division has entered into separate settlement agreements with the companies to resolve these claims.

Except where based on admissions by defendants in the criminal pleas, the claims resolved by the civil agreements are allegations only.

The civil settlements were handled by the Antitrust Division’s Transportation, Energy, and Agriculture Section, by the Civil Division, and by the Civil Fraud section of the United States Attorney’s Office in the Southern District of Ohio.

The United States’ civil investigation resulted from a whistleblower lawsuit filed under the qui tam provisions of the False Claims Act.

Those provisions allow for private parties to sue on behalf of the United States and to share in any recovery.


What to read next

Three South Korean firms in settlements for rigging bids on Department of Defense supply contracts
Korean Aerospace Industries offices raided in anti-corruption probe
Korean Air official faces trial for fund misappropriation

U.S.: Watching next strong cold front to enter northwest by late Sunday

 
A front extending from the Mid-Atlantic to the Central Plains will move southward to the Southeast to the Lower Mississippi Valley before dissipating by Sunday morning.
 
 

Latest

Luxury duvet looks good, fells good and keeps you healthy
Invasion of mosquitoes hits Buenos Aires
Three NRA leaders found liable for graft
Fire at Brazil's Paranagua port shuts 3 berths, say shipping agencies

NEWS

Former Austrian chancellor Kurz sentenced to 8 months in jail in perjury case

Myanmar navy seizes 1.5 tons of narcotics destined for Malaysia
54 people sickened at pharmaceutical packaging site in Pennsylvania
Air filters to be rolled out to first London’s 200 schools
Rain and storms along eastern seaboard; active weather returns to northwestern U.S. this weekend
Over 1,000 Greek beekeepers hold protest rally in Athens
 

BUSINESS

African Development Bank and OCP Group provide $188 million for green investment in Morocco

U.S. oil rigs jump
EU’s new Anti-Money Laundering Authority to be based in Germany
Indonesia inaugurates largest port for eastern region
California taking advantage of storms to boost water supplies
California ZEV sales skyrocketed more than 1000% in the last decade
 

Trending Now

Three NRA leaders found liable for graft

Luxury duvet looks good, fells good and keeps you healthy

U.S.: Watching next strong cold front to enter northwest by late Sunday

Invasion of mosquitoes hits Buenos Aires


POLITICS

EU to release billions of euros frozen funding for Poland

Battery and advanced manufacturing challenge to secure federal infrastructure investment in Michigan
Nearly $16.5m for short line rail projects to improve agricultural supply chain in Kansas
U.S. to invest billions to replace Chinese cranes at ports
U.S. announces $5.8 billion to clean up nation’s drinking water
Iran says it overtakes Qatar in gas extraction from joint field
 

Today We Recommend

Air filters to be rolled out to first London’s 200 schools


Highlights 

Farmer Mac net interest income grew 21%

U.S. FDA warns using smartwatches to measure blood glucose

Spyware found on EU politicians' phones


COMPANIES

Canadian latest low-cost airline to cease operation

German citizens reject Tesla expansion plans in Gruenheide
Zalando commits to provide clearer information for consumer following EU action
Austco Healthcare enters term sheet to acquire Amentco
Maersk unveils cold chain facility in New Zealand’s Golden Triangle
Thales Alenia Space launches Merah Putih-2 satellite, aiding digital expansion in Indonesia
 

CAREERS

BioMar appoints new VP for Asia

APO Group appoints Laila Bastati as chief commercial officer
TerraPay appoints Ruben Salazar Genovez as president
Personetics names Udi Ziv as new CEO
Lingotto appoints Pam Chan to launch Mosaic
Fogmaker International appoints Johan Bjerstedt as new sales and marketing manager
 

ECONOMY

Malaysia's total approved investment up 23 pct in 2023

Eurozone current account surplus up in December
Saudi Arabia's GDP hits $1.07trn in nominal terms
Bahrain attracts record $1.7 billion in investments
Trade between China and Brazil continues rise
China keeps medium term lending facility at 2.5%
 

EARNINGS

Farmer Mac net interest income grew 21%

BioMarin Pharmaceutical Q4 revenues $646.2 million
Keurig Dr Pepper sales increased 5.4% to $14.8 billion
Dominion Energy Q4 income $273 million
Nestlé sales decreased 1.5%
Wolters Kluwer revenues €5,584 million
 

OP-ED

Micromanaging is the worst enemy of efficiency and teamwork

Niger set to monetize massive gas reserves through Saharan natural gas pipeline
Putting the brakes on EV folly that choked the market
Oil discovery in Kavango Basin may mean huge benefits for Namibians
Cape Town and Dubai battle over Africa's energy future
Is America going to lose its superpower status?
 

AGRIFISH

Commission agrees to easy burden on farmers after huge protest in Europe

Hungary, Iran sign agricultural cooperation agreement
Tanzania to import 300,000 tonnes of sugar to fill current shortage
Latvia bans imports of Russian and Belarusian agricultural products
Harsh winter kills over 1.5 mln livestock in Mongolia
Hong Kong suspends import of poultry meat and products from Ostrowski District of Wielkopolskie Region, Poland
 

LEADERSHIP

Hiring 'problem directors' can knock up to 64% off firm's value

Problematic 'zombie leadership' lives on in many cases
Younger workers have significantly lower productivity than older
Employees who experienced burnout valued jobs with training opportunities less
Moderate performance goals let workers adapt to turbulent marketplaces, research suggests
Employment quotas are bad thing
 

CRIME

Linde unit to pay $25.5 mln over claims it defrauded U.S. healthcare programs

FINRA fines Morgan Stanley $1.6 million for municipal securities violations and related failures
Eli Lilly to offer low cost insulin, donate to clinics in Minnesota settlement
Google to pay $350 million to settle shareholders' data privacy lawsuit
California AG announces $150 million multistate agreement with Hikma Pharmaceuticals for its role in opioid epidemic
North Carolina secures $13.5m agreement with First National Bank of Pennsylvania to resolve redlining claims
 

Magazine

TRAVEL

Visitors to be welcomed back on Farne Islands

Hotel Taschenbergpalais Kempinski Dresden opens
306 Room Tempo by Hilton Nashville Downtown hotel opens
Tickets on sale now for Formula 1 Etihad Airways Abu Dhabi Grand Prix 2024
Best Western SeaWorld San Antonio hotel opens in Texas
Gigantic statue of Constantine goes on display in Rome
 

SEA, LAND, AIR

Embraer Phenom 300E, true force to be reckoned with

Sikorsky S-76D helicopter, for perfect business travel above roads
Porsche Taycan, improved in almost everything
New Ford Explorer is all about exploring
Chevrolet 2025 Equinox is new and refreshed
F-150 Lightning Switchgear soon available to public
 

DESIGN

Vacheron Constantin, watches for life and more

Schüller kitchens, where functionality marries design
Marc Kaufman Furs, from glory days of Wild West to fashion empire
Kelaghayi scarf, powerful women's fashion symbol from Azerbaijan
Tiffany reimagined their necklace collections in bold style
How to make room coherent with pieces that don't really fit together
 

GADGETS

Neumann TLM 103, standard microphone for both voice and music

Epikore Epikore, luxurious loudspeakers you should have
Retro radios with soul for your car
Balanced Audio Technology power amplifier REX 500, 500 watts of solid state
Marantz TT-15S1 turntable, excellent materials and sound
Samsung Galaxy S24, smartphone focused on photography
 

HEALTH

U.S. FDA warns using smartwatches to measure blood glucose

Terahertz biosensor detects skin cancer with remarkable accuracy
WuXi Advanced Therapies receives FDA approval to manufacture Iovance's AMTAGVI (lifileucel) for advanced melanoma
Problems with sleep can trigger range of psychiatric disorders
FDA approves Xolair as first and only medicine for children and adults with one or more food allergies
Record storms in California lead to surging deadly fungal infections
 

MEANTIME

U.S. makes first lunar landing in over 50 years

Birds have been adapting to human activity for millennia
Anthropologists' research unveils monumental early stone plaza in Andes
European Space Agency satellite ERS-2 will reenter Earth’s atmosphere this week
Colorado is home to America's newest national park
Hubble views massive star forming