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Concrete Company Admits Price Fixing

Friday, July 15, 2011

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An Iowa-based company has pleaded guilty in a federal investigation into a price-fixing conspiracy for the sales of ready-mix concrete. 
 
VS Holding Co., which formerly operated as Alliance Concrete Inc., a producer of ready-mix concrete with headquarters in Orange City, IA, participated in a conspiracy with another ready-mix concrete company to fix prices for ready-mix concrete sold in the Northern District of Iowa, according to a one-count felony charge filed June 24 in U.S. District Court in Sioux City, IA.

The company faces up to $100 million in fines.

Collusion Charged

According to court documents, former VS Holding president Steven VandeBrake participated in the conspiracy by engaging in discussions and reaching agreements regarding the conspirators’ prices for ready-mix concrete sold in the Northern District of Iowa. 

 FHWA

 FHWA

Three concrete company officials are already serving time in the continuing federal investigation into price fixing and bid rigging in and around Iowa.

VS Holding then accepted payment for those sales at collusive and noncompetitive prices, the department said.
 
The Justice Department said the company participated in the conspiracy beginning at least as early as January 2006 and continuing until as late as January 2008.

VS Holding is charged with violating the Sherman Act, which carries a maximum fine of $100 million for corporations. The fine may be increased to twice the gain derived from the crime or twice the loss suffered by the victims of the crime, if either of those amounts is greater than the statutory maximum fine.
 
Ongoing Investigation

The plea, announced July 8, is the result of an ongoing federal antitrust investigation of the ready-mix concrete industry in Iowa and surrounding states.  So far, three individuals have been convicted and sentenced to serve prison time; and, three ready-mix concrete companies, including VS Holding Co., have pleaded guilty and are awaiting sentencing.

Ready-mix concrete is a product comprised of cement, aggregate (sand and gravel), water and other additives.   The concrete generally is produced in a concrete plant and is transported by concrete-mixer trucks to work sites, where it is used in various types of construction projects, including buildings and roads. 
 
Prison Sentences

In February, VandeBrake, the former sales manager of GCC Alliance Concrete Inc. and president of Alliance Concrete Inc. (formerly Russell’s Ready Mix) was sentenced to 48 months in prison and fined more than $820,000 for his participation in three conspiracies with three different companies involving agreements to fix prices and/or to rig bids for ready-mix concrete sold in Iowa. VandeBrake pleaded guilty in May 2010 to the three-count felony charge filed in U.S. District Court in Sioux City.

In addition, Kent Robert Stewart, the president of Northwest Ready Mix and Great Lakes Concrete, was sentenced to one year and a day in prison and fined $83,427.09 for his role in conspiring with VandeBrake to fix prices and rig bids for the sale of ready-mix concrete sold in Iowa. Stewart also pleaded guilty in May 2010 to the one-count felony charge.

In June 2011, Chad Van Zee, the president of Tri-State Ready Mix Inc. was sentenced to 45 days in prison and fined $50,000. He pleaded guilty in December to a one-count felony.

The investigation is being conducted by the Antitrust Division’s Chicago Field Office, the FBI’s Sioux City Resident Agency and the Department of Transportation’s Office of the Inspector General, with the assistance of the U.S. Attorney’s Office in Sioux City.

Anyone with information concerning bid rigging, price fixing or territorial allocation related to the ready-mix concrete industry in Iowa and its surrounding states is asked to contact the Antitrust Division’s Chicago Field Office or call 312-353-7530.

   

Tagged categories: Bidding; Concrete

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