For the first time, the U.S. Department of Justice (DOJ) has successfully litigated an extradition of a foreign national on an antitrust charge. This extradition shows that the DOJ is still pursuing individuals it charged several years ago with criminal price-fixing conduct and is a watershed moment in DOJ criminal enforcement of the antitrust laws.
On April 4, 2014, the U.S. Department of Justice (DOJ) announced that it had extradited Romano Pisciotti, an Italian national, from Germany for his role in the marine hose price-fixing conspiracy. This is the first time the DOJ has successfully litigated an extradition on an antitrust charge.
Previously, the DOJ only had success in extraditing Ian Norris from the United Kingdom on an obstruction of justice charge relating to an underlying criminal cartel investigation. Norris’s extradition happened in March 2010 after seven years of litigation. Britain’s House of Lords refused to extradite him on price-fixing charges but allowed extradition on obstruction of justice charges. This recent development will embolden the DOJ to seek further extraditions and is a watershed moment in DOJ criminal enforcement of the antitrust laws.
A grand jury sitting in the U.S. District Court in the Southern District of Florida indicted Mr. Pisciotti for carrying out the conspiracy by agreeing to allocate shares of the marine hose market, using a price list for marine hose to facilitate the conspiracy and not to compete for customers. The indictment charged that the conspiracy period for Mr. Pisciotti was from at least as early as 1999 to at least November 2006. The conspiracy period for his former employer, Parker ITR, was from at least as early as 1999 to May 2, 2007. The indictment states that Mr. Pisciotti was an executive with Parker ITR, based in Veniano, Italy, from at least as early as 1999 until at least June 2006. From June 2006 to November 2006, the indictment states that Mr. Pisciotti was a consultant for Parker ITR. Though the indictment states that Mr. Pisciotti attended meetings in the United States, it does not state that Mr. Pisciotti worked in the United States for any extended period of time during the conspiracy period.
Mr. Pisciotti was arrested in Germany on June 17, 2013. According to the DOJ’s press release, he arrived in the Southern District of Florida on April 3, 2014, and was scheduled to appear the following day in the district court. Mr. Pisciotti is next scheduled to appear in court on April 24, 2014, and will remain in detention until then.
The marine hose conspiracy was another large price-fixing investigation by the DOJ. Marine hose is a flexible rubber hose used to transfer oil between tankers and storage facilities and/or buoys. The investigation led to many guilty pleas by companies and executives as well as substantial fines. The price-fixing conspiracy affected not only private companies in the United States, but also the U.S. Department of Defense. This extradition shows that the DOJ is still pursuing individuals it charged several years ago with criminal price-fixing conduct. According to Assistant Attorney General Bill Baer, “This marks a significant step forward in our ongoing efforts to work with our international antitrust colleagues to ensure that those who seek to subvert U.S. law are brought to justice.”
The United States has an extradition treaty with Germany, where Mr. Pisciotti was arrested, whereby each country agrees to grant an extradition request for an individual charged with a crime, subject to certain exceptions. One of these exceptions is that the conduct charged must be a crime in both the United States and Germany for extradition to be granted. This exception is common in extradition treaties and has prevented extradition in prior antitrust cases, or has made extradition exceedingly difficult (e.g., the Ian Norris case).
Some countries have already criminalized price-fixing conduct, while others are updating their antitrust laws in some cases to criminalize antitrust violations. Recently, the United Kingdom added criminal penalties for individuals who engage in price-fixing conduct under their competition laws. Additionally, many countries have policies, if not laws, against extraditing their own citizens. Mr. Pisciotti’s extradition from Germany may have been more likely because he is not a German citizen. Nevertheless, extradition is still a long process that would take resources away from DOJ’s day-to-day enforcement activities. But, DOJ’s success in extraditing Mr. Pisciotti will likely spur DOJ to seek extradition for other foreign individuals charged with antitrust violations in the future.