A jury convicted Gregory and David Melton yesterday in the U.S. District Court in Savannah, Georgia, for their role in a conspiracy to fix prices, rig bids, and allocate markets for sales of ready-mix concrete in Georgia and South Carolina. The conspiracy, which began as early as 2010 and continued until about July 2016, involved coordinating price-increase letters to customers, allocating specific jobs in the coastal Georgia area, and submitting bids to customers at collusive and noncompetitive prices.
Including yesterday’s verdicts, this investigation resulted in five criminal convictions and one deferred prosecution agreement. Defendants James Pedrick, Timothy Strickland, and Strickland’s company, Evans LLC, previously pleaded guilty as part of the same conspiracy. Pedrick’s former employer, Argos USA LLC, previously entered into a deferred prosecution agreement with the Antitrust Division, admitted to its participation in the conspiracy, and agreed to pay a $20 million criminal penalty.
“Concrete is essential to our nation’s infrastructure,” said Assistant Attorney General Jonathan Kanter of the Justice Department’s Antitrust Division. “Today’s guilty verdicts reflect the Antitrust Division’s commitment to holding individuals accountable for cheating American consumers out of the opportunity to purchase necessary building materials free of corruption and collusion. The division and its law enforcement partners will continue to prioritize their work prosecuting individuals responsible for this illegal and unethical conduct.”
“Customers expect to receive fair value for construction materials – not to enrich unscrupulous vendors who collude to unfairly increase their profits,” said U.S. Attorney Jill E. Steinberg for the Southern District of Georgia. “This verdict makes it clear that our office and law enforcement partners will hold accountable those who violate the law to pad their bottom line.”
“Bid rigging and fraud schemes are serious criminal actions that adversely impact the competitive contracting marketplace,” said Special Agent in Charge Joseph Harris of the Department of Transportation Office of Inspector General (DOT OIG), Southern Region. “Today’s conviction should serve to deter individuals and companies from engaging in deceptive practices that violate federal regulations and the public’s trust.”
“The Justice Department’s Antitrust Division, along with our other federal law enforcement partners, secured a victory with today’s guilty verdict in our fight against bid-rigging and collusion,” said Executive Special Agent in Charge Kenneth Cleevely of the U.S. Postal Service (USPS) Office of Inspector General (OIG). “The USPS OIG will vigorously investigate those who would engage in harmful anticompetitive practices, and we continue to ask for the public’s assistance in identifying and reporting those engaged in this type of activity.”
Violating the Sherman Act, which is a federal criminal antitrust statute, is a felony. The maximum penalty for individuals convicted of violating the Sherman Act is 10 years in prison and a $1 million criminal fine. The fine may be increased to twice the gain derived from the crime or twice the loss suffered by victims if either amount is greater than the statutory maximum fine. A federal district court judge will determine any sentence after considering the U.S. Sentencing Guidelines and other statutory factors.
The FBI Washington Field Office, DOT OIG, and USPS OIG investigated the case.
Attorneys Patrick S. Brown and Julia M. Maloney of the Antitrust Division’s Washington Criminal Section and Assistant U.S. Attorney E. Greg Gilluly Jr. for the Southern District of Georgia prosecuted the case with valuable assistance from Assistant Chief Megan Lewis and Trial Attorney Daniel A. Loveland of the Antitrust Division.
In November 2019, the Justice Department created the Procurement Collusion Strike Force (PCSF), a joint law enforcement effort to combat antitrust crimes and related fraudulent schemes that impact government procurement, grant funding at all levels – federal, state, local government levels – state government levels – local government levels – local government levels – local government levels – local government levels – local government levels
To learn more about PCSF or report information on bid rigging price fixing market allocation other anticompetitive conduct related government spending go www.justice.gov/procurement-collusion-strike-force