Two More South Korean Firms Plead Guilty to Fixing Fuel Prices for U.S. Military Bases
21 March 2019 - 1:24AM
Dow Jones News
By Tatyana Shumsky and Brent Kendall
Two South Korean companies have agreed to plead guilty and pay
$127 million in criminal and civil penalties for conspiring to fix
prices on fuel supplied to U.S. military bases in their country,
U.S. authorities said Wednesday.
Hyundai Oilbank Co. Ltd. and S-Oil Corp. agreed to plead guilty
to criminal charges of bid-rigging and fraud, and pay a total of
roughly $75 million in penalties, the Justice Department said. The
two companies also agreed to plead guilty to a civil antitrust
charge and pay a total of $52 million, prosecutors said.
Previously, three other South Korean companies, SK Energy Co.,
GS Caltex Corp. and Hanjin Transportation Co. agreed to plead
guilty and pay $236 million in criminal and civil penalties for
their participation in this scheme.
Prosecutors on Wednesday also named seven individuals, all
residents and citizens of South Korea, as co-defendants in the
criminal case. Hee-Soo Kim, Tae Ho Cho, Jiwon Kang, Young-Ho Yoon,
Byung Kuk Kim, Byungik Moon, and Eul-Jin Hyung participated in the
bid-rigging conspiracy and in a scheme to defraud the U.S.
government, prosecutors said.
They alleged that the two companies and the individuals
defrauded the U.S. military for at least a decade by fixing prices
and rigging bids for the contracts to supply fuel to military bases
in South Korea.
The companies and their co-conspirators coordinated with other
South Korean oil refiners and logistics companies to predetermine
who would win each contract and as a result, they reaped vastly
higher profits on the fuel and overcharged the U.S. military by
well over $100 million, according to a complaint filed in the U.S.
District Court for the Southern District of Ohio.
Prosecutors charged the two companies and seven individuals with
conspiring to suppress and eliminate competition during the bidding
process for fuel-supply contracts to numerous U.S. military bases
throughout South Korea, and to defraud the U.S. by impairing
obstructing and defeating the function of the procurement process.
One of the individuals, Hee-Soo Kim, was additionally charged with
witness tampering, according to the Justice Department.
A Justice Department spokesman declined to comment beyond court
filings and a press release on the case.
Hogan Lovells, the law firm representing Hyundai Oilbank Co.
Ltd., declined to comment. Lawyers representing S-Oil Corporation
didn't immediately respond to requests for comment.
The two firms have agreed to cooperate with the continuing
criminal and civil investigations, the Justice Department said.
Write to Tatyana Shumsky at tatyana.shumsky@wsj.com and Brent
Kendall at brent.kendall@wsj.com
(END) Dow Jones Newswires
March 20, 2019 21:09 ET (01:09 GMT)
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