Three more Japanese auto parts executives indicted

David Shepardson
Detroit News Washington Bureau

Washington — Three more Japanese auto parts executives were indicted Thursday in the Justice Department’s wide-ranging investigation into price fixing and bid rigging in the auto industry.

A federal grand jury in Covington, Kentucky, returned an indictment against one current and two former Japanese automotive executives for their alleged participation in a conspiracy to fix prices and rig bids for the sale of automotive body sealing products sold in the United States.

The indictment, filed Thursday in U.S. District Court in Kentucky, charges Keiji Kyomoto, Mikio Katsumaru and Yuji Kuroda — all Japanese nationals — with conspiring to rig bids for and fix the prices of body sealing products sold to Honda Motor Co. and Toyota Motor Corp.

Automotive body sealing products consist of body-side opening seals, door-side weather-stripping, glass-run channels, trunk lids and other smaller seals, which are installed to keep the interior dry from rain and free from wind and exterior noises.

“These executives conspired for years with their competitors to fix the prices of body sealing products sold to Honda and Toyota and installed in U.S. cars,” said Deputy Assistant Attorney General Brent Snyder of the Justice Department’s Antitrust Division. “Today’s indictment is another reminder that antitrust violations are not just corporate offenses but also crimes by individuals. The Antitrust Division will continue to vigorously prosecute executives who orchestrate their companies’ efforts to break the law.”

To date, a total of 58 individuals and 37 companies have been charged and have agreed to pay more than $2.6 billion in criminal fines.

In July, the state of Indiana sued two dozen auto suppliers and their affiliates over wire harness price-fixing and bid-rigging in the multi-billion dollar industry. Many suits have settled to date.

The state says it has been forced to pay higher prices for auto parts in seeking damages, but didn't specify how much it is seeking. Under the law, it can win three times the amount of the damages.

Suits have been pending since 2012 by automakers, auto dealers and other governments. In October 2014 five governments, including Traverse City and Oakland County, sued the same suppliers.

In 2013, the Justice Department said the international price fixing conspiracies affected more than $5 billion in automobile parts served to U.S. car manufacturers; in total, more than 25 million cars purchased by American consumers were affected.

The indictment alleges that the three conspired from at least as early as September 2003 until at least October 2011. For most of this period, Kyomoto resided in the United States and served as president of an joint venture with offices in Indiana and Michigan, which manufactured and sold automotive body sealing products.

Katsumaru, who resided in Japan, served in multiple managerial positions during the conspiracy period, including manager of the Sales and Marketing Division of a parts company based in Hiroshima, Japan, that partially owned the joint venture and manufactured and sold automotive body sealing products. Kuroda, who resided in Japan, served as a sales branch manager.

According to the indictment, Kyomoto, Katsumaru and Kuroda each instructed subordinates at their respective companies to communicate with co-conspirators at other companies in order to allocate sales of, rig bids for and fix the prices of automotive body sealing products. Katsumaru and Kuroda also are charged with instructing and encouraging certain employees at their company to destroy evidence of the conspiracy. Each individual faces a maximum penalty to 10 years in prison and a $1 million criminal fine if convicted.

Auto supplier price-fixing is being investigated by officials in the U.S., Europe, Australia, South Korea, Japan and Canada. A Justice Department investigation first came to light with search warrants executed by the FBI in early 2010 at the Metro Detroit U.S. headquarters of three Japanese suppliers.