On August 5, two Denso Corp executives were sentenced to over a year in prison following their guilty plea to participating in a conspiracy to fix prices in violation of the antitrust laws. Yuji Suzuki, a former senior manager in the Toyota Parts Division, was sentenced to 16 months in prison and Hiroshi Watanabe, a former group leader in the same division, was sentenced to 15 months. Their conspiracy to rig bids and fix prices involved electronic control units and heater control panels sold to Toyota Motor Company. Their part in the conspiracy spanned 3 years.
Previously, two other Denso executives have plead guilty to antitrust violations. Norihiro Imai, a former assistant manager of the Toyota Sales Division, was sentenced to 12 months and one day in prison and a $20,000 fine and Makoto Hattori was sentenced to 14 months in prison and a $20,000 fine. In addition, Denso agreed to pay $78 million in 2012 to settle the antitrust investigation of the company.
Indeed, the auto parts antitrust investigation has spawned a number of criminal prosecutions of individuals. For example, six Yazaki executives were criminally prosecuted receiving sentences ranging from 14-24 months in prison and fines of $20,000 each and three Furukawa Electric executives were criminally prosecuted and received sentences ranging from 12-18 months in prison and a fine of $20,000 each. To date, the DOJ has garnered guilty pleas from nine companies and 14 executives.
The DOJ views the prosecution of individuals as one of its best weapons to deter unlawful conduct. Companies act through their executives and in cases where the companies have the ability to pay hefty fines, the threat of prison sentences against individuals may be a much bigger stick. Attorneys representing individuals in these cases need to be mindful of this policy incentive. And, companies under investigation, need to get separate counsel for their individual executives at the first sign that they may have engaged in wrongful conduct. Such action will protect both the company and its individual executives.