U.S. Government Prosecutions

The United States Department of Justice (DOJ) began investigating allegations of price fixing in the market for lysine in late 1992. Tape recordings made by an informant of conversations among the lysine conspirators contained language that suggested that parallel conspiracies were ongoing in the citric acid and corn sweeteners industries. Separately, information about possible price fixing in the markets for bulk vitamins came to the attention of the DOJ. In 1995–1997 four grand juries were formed to consider the evidence held by the DOJ. Three of the four grand juries determined that there was probable cause for indicting certain companies and individuals for criminal violations of the Sherman Antitrust Act. The DOJ negotiated guilty pleas with a large number of companies and key managers of those companies. However, three executives who refused to such a plea bargain were tried and found guilty in a 1998 federal court. In the late 1990s, officials in an unprecedented number of countries piggybacked on the DOJ's indictments and brought charges against many of the same defendants for violations of their competition laws.

The purpose of this chapter is to recount and assess the investigations and prosecutions of three alleged price fixing schemes by the DOJ and its investigative arm, the FBI: lysine, citric acid, and vitamins. The following chapters 14 and 15 will consider enforcement actions overseas and civil suits, respectively, against the same set of defendants.