Another DENSO Exec Guilty of Price Fixing and Bid Rigging

An executive of Japanese-based Denso Corporation pled guilty and will serve 14 months in a U.S. prison for his role in a conspiracy to fix prices and rig bids for heater control panels (HCPs) installed in U.S. cars.

According to the one-count felony charge filed yesterday in the U.S. District Court for the Eastern District of Michigan in Detroit, Makoto Hattori, along with co-conspirators, engaged in a conspiracy to rig bids for and to fix, stabilize and maintain the prices of HCPs sold to a customer in the United States and elsewhere.

Hattori follows Norihiro Imai, a Japanese national and another DENSO executive who pled guilty in March and will serve time in prison for his role in same conspiracy. Denso has strong ties with Japanese automakers building cars in the U.S., notably Toyota.

According to the latest charge, Hattori participated in the conspiracy from at least as early as July 2005, until at least July 2008. During the conspiracy, Hattori was an assistant manager in the Toyota Sales Division at DENSO from July 2005 until December 2006, and a manager in the Toyota Sales Division from December 2006 until at least July 2008.

According to the plea agreement, which is subject to court approval, Hattori has agreed to serve 14 months in a U.S. prison, to pay a $20,000 criminal fine and to cooperate with the Department of Justice’s ongoing investigation.

According to court documents, Hattori and co-conspirators carried out the conspiracy by agreeing, during meetings and conversations, to allocate the supply of HCPs on a model-by-model basis and to coordinate price adjustments requested by an automobile manufacturer in the United States and elsewhere.

The DOJ said that Hattori and the co-conspirators sold HCPs at non-competitive prices and engaged in meetings and conversations for the purpose of monitoring and enforcing adherence to the agreed-upon bid rigging and price fixing scheme.

Including Hattori, nine individuals and five companies have been charged in the department’s ongoing investigation into price fixing and bid rigging in the auto parts industry. Furukawa Electric Co. Ltd, DENSO Corporation and Yazaki Corporation have pleaded guilty and been sentenced to pay a total of more than $748 million in criminal fines. G.S. Electech Inc. and Fujikura Ltd have agreed to plead guilty and await sentencing.

Seven of the individuals – Junichi Funo, Hirotsugu Nagata, Tetsuya Ukai, Tsuneaki Hanamura, Ryoji Kawai, Shigeru Ogawa and Hisamitsu Takada – have been sentenced to pay criminal fines and to serve jail sentences ranging from a year and a day to two years each.

The remaining two individuals, Hattori and Norihiro Imai, have agreed to plead guilty and await sentencing.

Hattori is charged with price fixing in violation of the Sherman Act, which carries a maximum sentence of 10 years in prison and a $1 million criminal fine for individuals. The maximum fine for an individual 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.

About Ken Zino

Ken Zino is an auto industry veteran with global experience in print and electronic media. He has auto testing, marketing, public relations and communications expertise garnered while working in Asia, Europe and the U.S.
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