- United States Succeeds In Extraditing Foreign National Indicted For Antitrust Violations
- April 9, 2010 | Author: William V. O'Reilly
- Law Firms: Jones Day - Columbus Office ; Jones Day - Washington Office
Until this year, the Department of Justice Antitrust Division has been unsuccessful in its efforts to have foreign nationals extradited to the United States for prosecution for antitrust violations. Last month, British citizen Ian Norris, the former CEO of Morgan Crucible plc, exhausted his final appeal in European courts, after years of challenging DOJ’s request that he be extradited to stand trial for price-fixing and obstruction of justice in connection with a conspiracy involving carbon products. Norris's extradition and appearance this week before a U.S. magistrate judge in Philadelphia will be a milestone in DOJ's efforts to prosecute foreign nationals in criminal antitrust cases.
The Norris case is part of a decade-long investigation by DOJ. A federal grand jury began its investigation in 1999. In 2002, DOJ announced that Norris’s former employer, Morgan, and its North Carolina-based subsidiary, Morganite Inc., had agreed to pay a total of $11 million in fines to settle criminal price-fixing and obstruction of justice charges. Morganite agreed to plead guilty to fixing the prices of electrical carbon products sold in the U.S. and elsewhere during the 1990s. In 2003, DOJ brought criminal obstruction charges against four executives—Norris and three others (a U.S. citizen, a U.K. citizen, and a Dutch citizen). DOJ also charged Norris with price-fixing. All but Norris agreed to plead guilty and serve jail time in the U.S.
According to DOJ’s indictment, Norris and his co-conspirators participated in the cartel through discussions in Europe, Mexico, and Canada during which they agreed to increase or maintain the pricing levels of various carbon products. DOJ also alleged that they:
- prepared a "script" containing false information about meetings between Morgan and its competitors,
- distributed the script to individuals who had relevant information, including competitors, with instructions that the script be followed when answering questions from DOJ and the grand jury,
- separated from Morgan at least one subordinate who, during a "rehearsal," was unable to withstand questioning about the contents of the script, and
- formed a task force to search through company files and to conceal or destroy incriminating information.
DOJ sought to extradite Norris on all counts in the indictment. He challenged the extradition, with mixed results. Norris argued that extradition was improper because price-fixing was not a crime in the U.K. at the time of his alleged conduct. Price-fixing became a criminal offense in the U.K. effective June 2003. The House of Lords (U.K.’s highest domestic court) accepted Norris’s argument in 2008, but left open the possibility that he could be extradited for the obstruction counts in the indictment. By February 2010, the U.K. courts concluded that Norris could be extradited for obstruction because, although factually related to the price-fixing, they constituted distinct and significant offenses. His appeals exhausted, the U.K. Home Secretary ordered Norris’s extradition.
Historically, DOJ could not often credibly threaten extradition in criminal antitrust cases, as the U.S. and Canada were the only jurisdictions that considered price-fixing a criminal offense. The lack of "dual criminality" between laws of the U.S. and the fugitive’s home country precluded extradition. The Norris extradition is a sign of change to come. Criminal laws prohibiting cartel conduct have been adopted in the U.K., Brazil, Denmark, Ireland, Israel, Japan, and Korea. And other jurisdictions have recently enacted or are considering similar legislation, including Australia, Chile, Czech Republic, Greece, Mexico, the Netherlands, New Zealand, Russia, and South Africa.
The Norris case provides three important lessons:
- As more jurisdictions criminalize price-fixing, individuals face a greater risk of being extradited to the U.S. for their participation in international cartels.
- DOJ will prosecute and seek the extradition of fugitive antitrust defendants wherever possible, even if only for related, independent crimes. DOJ has long emphasized that it will protect the integrity of its investigations by vigorously prosecuting obstruction of justice. As DOJ explained, "Norris is charged with intentionally and deliberately orchestrating one of the most egregious acts of obstruction of justice in the [Antitrust] Division’s history."
- Foreign nationals now may be less inclined to live as a fugitive and risk being extradited, whether from their home country or when traveling to third countries, but more inclined to submit to U.S. jurisdiction as part of a negotiated plea agreement with DOJ. DOJ will not make a plea agreement that does not require some jail time, but almost certainly less than the defendant would serve after losing at a trial following extradition.
If convicted on all of the obstruction counts, Norris faces the prospect of serious jail time—ranging from 21-41 months (under the advisory Sentencing Guidelines) to 45 years (the statutory maximum). By contrast, Norris’s three co-conspirators, who agreed to come to the U.S. voluntarily and plead guilty, ultimately served between 4 and 6 months in prison.