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Thelen Reid Brown Raysman & Steiner LLP
The U.S. Court of Appeals for the 11th Circuit has upheld the criminal antitrust and conspiracy convictions of a construction company executive that arose out of a bid-rigging scheme between international construction companies vying for projects in Egypt. The court reviewed the jury verdict that found the executive guilty of conspiracy to violate the Sherman Act and to defraud the U.S. government. United States of America v. Elmore Roy Anderson, 326 F.3d 1319 (11th Cir. 2003), cert den. 124 S.Ct. 178.
As part of the Camp David Peace Accords in the 1970s, the United States agreed to fund construction projects to improve the treatment of drinking and wastewater in Egypt. Contracts were awarded based on sealed competitive bids from bidders pre-qualified by the U.S. Agency for International Development (USAID).
Four of the pre-qualified bidders conspired to manipulate their bids by designating which company would win the contract before the bids were submitted. The bidders arranged for "loser fees," lucrative subcontracts or promises of future work, and the winning bidder would add these costs to its bid. As a result, USAID paid inflated prices for the projects.
In 2001 the government brought criminal conspiracy charges against two U.S. corporations as well as the executive, Anderson, alleging breach of the Sherman Antitrust Act and conspiracy to defraud the U.S. government. One of the corporations agreed to a plea bargain that included a $54 million payment to the federal government in exchange for dismissal of both corporations. The case against Anderson, former president of the corporation that pleaded guilty, went to trial.
One of Anderson's main defenses was that the five-year statute of limitations for antitrust violations had passed. The evidence centered around three contracts awarded in the late 1980s. Two of the contracts were completed by 1995, and the third was completed in 1996, with final payment made that year. Anderson was indicted in 2001.
Thus, the key to the government's case was to show that all three contracts were a part of over-arching conspiracy. While not the lead person in co-ordinating the conspiracy, evidence was presented that Anderson had, among other things, written down the bid rigging plan for one of the contracts, made comments to another bidder that could imply there was a group of persons involved in a single conspiracy and was present during the rigging of the bids on all three contracts.
The jury returned a guilty verdict on both counts, and the trial court sentenced the executive to three years in prison and a $25,000 fine. The appeals court held there was sufficient evidence to support the jury's finding of an over-arching conspiracy. The appellate court affirmed the verdict but remanded for the court to reconsider sentencing. In affirming the conviction, the appeals court found that the three projects involved a common goal to steal from the U.S. government. The participants' comments and conduct evidenced a single enterprise. Anderson was present at meetings regarding all three projects. The government proved that he knew of the general nature and scope of the conspiracy.
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©2005 Thelen Reid Brown Raysman & Steiner LLP
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