First criminal monopolization case in 50 years

U.S. Department of Justice

The president of a paving and asphalt contractor based in Billings, Montana, has pleaded guilty to in the first criminal monopolization case in 50 years after trying to rig the market for highway crack-sealing services in Montana and Wyoming.

According to the one-count felony charge filed on Sept. 19 in the U.S. District Court for the District of Montana, Nathan Nephi Zito attempted to monopolize the markets for highway crack-sealing services in Montana and Wyoming by proposing that his company and its competitor allocate regional markets.

The charge states that as early as January 2020, Zito approached a competitor about a “strategic partnership” and proposed that the competitor stop competing with Zito’s company for highway crack-sealing projects administered by Montana and Wyoming.

In return, Zito’s company would stop competing with the competitor for projects administered by South Dakota and Nebraska.

Zito offered to pay his competitor $100,000 as additional compensation for lost business in Montana and Wyoming.

Zito further proposed that he and his competitor enter into a sham transaction to disguise their collusion.

The charge states that Zito intended to monopolize the highway crack-sealing services markets in Montana and Wyoming.

Today, the District Court accepted the guilty plea that was allocuted on Oct. 14, when Zito admitted to the facts contained in the charge.

“Congress criminalized monopolization and attempted monopolization to combat criminal conduct that subverts competition,” said Assistant Attorney General Jonathan Kanter of the Justice Department’s Antitrust Division. “The Justice Department will continue to prosecute blatant and illegitimate monopoly behavior that subjects the American public to harm.”

“This guilty plea marks the end of an era for the kind of corporate lawlessness that has harmed local communities across the country,” said Katherine Van Dyck, senior legal counsel at the American Economic Liberties Project. “The drafters of the Sherman Act knew then, and we know now, that the threat of criminal indictment and jail time is the best deterrent against illegal concentrations of power in our economy. Criminal charges are almost always on the table in corporate fraud investigations, and they should be a real threat in corporate monopoly investigations too.”

Section 2 of the Sherman Act explicitly states that monopolization is a felony, punishable by fines up to $100 million and imprisonment of individuals up to 10 years.

The Department of Justice’s one-count felony charge against Zito alleges that he attempted to conspired with his only potential competitor “to divide territories and end competition in…Montana, Wyoming, South Dakota, and Nebraska” for publicly funded highway projects.

Zito admitted to “monopolizing the markets for highway crack-sealing services” and “further propos[ing] that he and his competitor enter into a sham transaction to disguise their collusion.”

Zito’s sentencing has been scheduled for February 23, 2023.

Exit mobile version