Corporate Criminal Price-Fixing Trial Starts

One of the few companies to fight criminal charges of conspiracy fix prices is Taiwan’s AU Optronics Corp. in a trial that got under way this week in federal court in San Francisco.

Early in the Tuesday court session, U.S. District Judge Susan Illston rejected a request by defendant Tsannrong Lee, a senior information technology manager,  to sever his trial because the government intends to introduce material that AU Optronics employees “may have destroyed evidence when they learned of an FBI search.”

Illston said the evidence is “relevant to guilt” but “is not that inflammatory.”

Later, lawyers for Steven Leung won a promise from the government that the prosecutors would not mention during opening statements that Leung, “in a joking manner” wrote an email, “Do not forward, do not share.  I will kill you if I find out.”

Six executives and the company are accused of holding secret meetings  in a Taipei hotel room as far back as September 2001 to set about fixing prices for LCD flat panel screens used in computers, laptops and smart phones, according to the federal indictment.

The alleged conspirators met monthly in what the government says were called “crystal meetings.”  The government contends that during these meetings the purported cartel members shared information about production, shipping, supply, demand and pricing information with each other and developed means to monitor and enforce adherence to the fixed prices.

This may be a tough road for AU Optronics.  Seven companies have already pleaded guilty and paid the government $890 million in fines.

The indictment alleges the conspiracy operated between Sept. 2001 and Dec. 2006.

It also states in the spring of 2006, participants in the crystal meetings  heard about Justice Department price-fixing investigations into dynamic random access memory (DRAM) industry.  This allegedly spooked them enough that they agreed to no longer meet as a group but to have back-to-back and one-on-one meetings in Taipei restaurants and cafes, according to the indictment.

In 2010, Illston confiscated passports for the CEO Lai-Juh Chen and other top executives to avert the potential that they might flee to avoid prosecution.

The trial is expected to last two months.

Case:  U.S. v. AU Optronics Corp.   No. CR09-110SI

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