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Concrete Cartel Probe Snags 4th Firm

Monday, August 29, 2011

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Yet another Iowa-based ready-mix concrete company has pleaded guilty in a widening federal investigation into a regional price-fixing and bid-rigging conspiracy, the Department of Justice has announced.

The guilty plea Wednesday (Aug. 24), by Great Lakes Concrete Inc. of Spencer, IA, is the latest in an ongoing federal antitrust probe of the ready-mix concrete industry in Iowa and surrounding states.

As a result of the investigation, three individuals have been convicted and sentenced to serve prison time, and four ready-mix concrete companies (including Great Lakes Concrete) have pleaded guilty and are awaiting sentencing.

Each company faces a $100 million fine in the case.
 
Conspiracy Pleas

In July, VS Holding Co., a producer of ready-mix concrete with headquarters in Orange City, IA, pleaded guilty in the probe. The case against Great Lakes Concrete is similar to that of VS Holding. 

 National Ready Mixed Concrete Association

National Ready Mixed Concrete Association

Four concrete ready-mix companies and three individuals have pleaded guilty in the widening federal investigation.

According to a one-count felony charge filed on Aug. 15, 2011, in U.S. District Court in Sioux City, IA, Great Lakes participated in a conspiracy with GCC Alliance Concrete to fix prices and rig bids for ready-mix concrete in northern Iowa.

According to the Criminal Information, the company participated in the conspiracy at least from January 2008 until August 2009.
 
Documents say Kent Robert Stewart, the president of Great Lakes Concrete, engaged in conversations and reached agreements regarding the conspirators’ price lists and project bids for ready-mix concrete sold in the region.

Great Lakes then accepted payment for those sales at collusive and noncompetitive prices, the government said.  On May 24, 2010, Stewart pleaded guilty in U.S. District Court in Sioux City to participating in a conspiracy to fix prices and rig bids; on Feb. 8, 2011, he was sentenced to serve a year and a day in prison and to pay an $83,427.09 criminal fine.

Fred VandeBrake, former sales manager of GCC Alliance Concrete, went on to head VS Holding. VandeBrake has been sentenced to four years in prison and fined more than $820,000 for his participation in three conspiracies with three companies in the case.

$100M Fine

Like VS Holding, Great Lakes Concrete was charged with violating the Sherman Antitrust Act, which carries a maximum base 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, if either amount is greater than the statutory maximum fine.
 
Ready-mix concrete is 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.
 
The investigation is being conducted by the Antitrust Division’s Chicago Field Office, the FBI’s Sioux City Resident Agency and the U.S. 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 may contact the Antitrust Division’s Chicago Field Office at 312-353-7530 or visit www.justice.gov/atr/contact/newcase.htm.

   

Tagged categories: Additives; Bidding; Concrete; Construction; Laws and litigation; Roads/Highways

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