more for archive on business and civil judgements. 1-25 OF 19990'S LIST
EXCERPT BEGINS
THE TOP 100 CORPORATE CRIMINALS OF THE 1990's

1) F. Hoffmann-La Roche Ltd.
Type of Crime: Antitrust
Criminal Fine: $500 million
12 Corporate Crime Reporter 21(1), May 24, 1999


The Swiss pharmaceutical giant, F. Hoffmann-La Roche Ltd., pled guilty and agreed to pay a record $500 million criminal fine for leading a worldwide conspiracy to raise and fix prices and allocate market shares for certain vitamins sold in the United States and elsewhere.

In Dallas, the Department of Justice charged the company with conspiring to fix, raise, and maintain prices, and allocate the sales volumes of vitamins sold by them and other unnamed co-conspirator companies in the U.S. and elsewhere.

Federal officials also allege that the company allocated contracts for vitamin premixes for customers throughout the U.S. and rigged the bids for those contracts.

The conspiracy lasted from January 1990 into February 1999 and affected the vitamins most commonly used as nutritional supplements or to enrich human food and animal feed -- vitamins A, B 2, B5, C, E, and Beta Carotene.

Vitamin premixes, which are used to enrich breakfast cereals and numerous other processed foods were also affected by the conspiracy, the Department said.



2) Daiwa Bank Ltd. Type of Crime: Fraud
Criminal Fine: $340 million
10 Corporate Crime Reporter 9(3), March 4, 1996


Daiwa Bank Ltd. pled guilty to 16 federal felonies and paid a $340 million criminal fine -- at the time, the largest criminal fine ever imposed in the United States.

Federal officials charged that the bank and bank officials sought to cover-up massive securities trading losses on two separate occasions and deceive and defraud bank regulators.

Daiwa pled guilty to two counts of conspiracy to defraud the United States and the Federal Reserve Bank, one count of misprison of a felony, ten counts of falsifying bank books and records, two counts of wire fraud, and one count of obstructing a bank examination.

Mary Jo White, the U.S. Attorney in Manhattan, told reporters that her office made many efforts to obtain the bank's cooperation in the criminal investigation, "but no meaningful cooperation was ever given."

"These corporate crimes represent companies at their highest levels acting at their worst," White said. "What we aim for in law enforcement in the corporate context is good corporate citizenship, cooperation and openness with authorities, and genuine efforts to improve a corporate culture that has led to the problems and crimes under investigation. Unfortunately, until today's guilty pleas, we had the opposite from Daiwa."



3) BASF Aktiengesellschaft
Type of Crime: Antitrust
Criminal Fine: $225 million
12 Corporate Crime Reporter 21(1), May 24, 1999


A German company, BASF Aktiengesellschaft, pled guilty and agreed to pay a $225 million criminal fine for leading a worldwide conspiracy to raise and fix prices and allocate market shares for certain vitamins sold in the United States and elsewhere.

In Dallas, the Department of Justice charged the company with conspiring to fix, raise, and maintain prices, and allocate the sales volumes of vitamins sold by them and other unnamed co-conspirator companies in the U.S. and elsewhere.

Federal officials also allege that the company allocated contracts for vitamin premixes for customers throughout the U.S. and rigged the bids for those contracts.

The conspiracy lasted from January 1990 into February 1999 and affected the vitamins most commonly used as nutritional supplements or to enrich human food and animal feed -- vitamins A, B 2, B5, C, E, and Beta Carotene.

Vitamin premixes, which are used to enrich breakfast cereals and numerous other processed foods were also affected by the conspiracy, the Department said.



4) SGL Carbon Aktiengesellschaft (SGL AG)
Type of Crime: Antitrust
Criminal Fine: $135 million
12 Corporate Crime Reporter 19(4), May 10, 1999


SGL Carbon Aktiengesellschaft (SGL AG), the world's largest producer of graphite and carbon products, pled guilty to antitrust crimes and agreed to pay a record $135 million fine for participating in an international conspiracy to fix prices and allocate the volume of graphite electrodes in the U.S. and elsewhere.

Graphite electrodes are large columns used in electric arc furnaces in steel-making "mini-mills."



5) Exxon Corporation and Exxon Shipping
Type of Crime: Environmental
Criminal Fine: $125 million
5 Corporate Crime Reporter 11(3), March 18, 1991


Exxon Corporation and Exxon Shipping pled guilty to federal criminal charges in connection with the March 24, 1989 Exxon Valdez oil spill.

The company was assessed a $125 million criminal fine.

Attorney General Dick Thornburgh called the fine "the largest single environmental criminal recovery ever enacted."

The companies pled guilty to misdemeanor violations of federal environmental laws.

Approximately 11 million gallons of crude oil spilled from the Valdez, fouling 700 miles of Alaska shoreline, killing birds and fish, and destroying the way of life of thousands of Native Americans.



6) UCAR International, Inc.
Type of Crime: Antitrust
Criminal Fine: $110 million
12 Corporate Crime Reporter 15(6), April 13, 1998


AR International, Inc. (UCAR), the largest producer of graphite electrodes in the United States, was charged with participating in an international cartel to fix the price and allocate the volume of graphite electrodes sold in the United States and elsewhere.

The company pled guilty and agreed to pay a $110 million criminal fine.

UCAR is charged with violating the Sherman Act by conspiring with unnamed co-conspirators to suppress and eliminate competition.

According to the charges, UCAR and the other companies began to fix prices and allocate their market shares for graphite electrodes in the United States and elsewhere at least as early as July 1992, and continued until at least June 1997.

As a result, steel makers paid noncompetitive and higher prices for graphite electrodes used in manufacturing products that are integral to a variety of business and consumer items.

Graphite electrodes are large columns used in electric arc furnaces in steel-making "mini-mills" to generate the intense heat necessary to melt and further refine steel. Nine electrodes, joined in columns of three, are used in the typical electric arc furnace to melt scrap steel.



7) Archer Daniels Midland
Type of Crime: Antitrust
Criminal Fine: $100 million
10 Corporate Crime Reporter 40(1), October 21, 1996


Archer Daniels Midland (ADM) pled guilty and paid a $100 million criminal fine -- at the time, the largest criminal antitrust fine ever -- for its role in conspiracies to fix prices to eliminate competition and allocate sales in the lysine and citric acid markets worldwide.

Federal officials said that as a result of ADM's crime, seed companies, large poultry and swine producers and ultimately farmers paid millions more to buy the lysine additive.

In addition, manufacturers of soft drinks, processed foods, detergents, and others, paid millions more to buy the citric acid additive, which ultimately caused consumers to pay more for those products.

Lysine is an amino acid used by farmers as a feed additive to ensure the proper growth of livestock. It is a $600 million a year industry worldwide.

Citric acid is a flavor additive and preservative produced from various sugars. It is found in soft drinks, processed food, detergents, pharmaceutical and cosmetic products. Citric acid is a $1.2 billion a year industry worldwide.



8)(tie) Banker's Trust
Type of Crime: Financial
Criminal Fine: $60 million
12 Corporate Crime Reporter 11(1), March 15, 1999


Bankers Trust was fined $60 million for its role in a scheme by high-ranking bank officials to enhance the bank's financial performance by falsely recording approximately $19.1 million in unclaimed customer funds as the bank's income and reserves.

Bankers Trust pled guilty to three counts of making false entries in bank books and records.

In addition to the $19.1 million fine, Bankers Trust was forced to return $17.85 million of the approximately $19.1 million unlawfully recorded as the bank's income and reserves to their rightful owners.

Bankers Trust's plan to return the remaining balance of the $19.1 million will be supervised by the Federal Reserve Bank of New York. Three Bankers Trust executives were indicted in the case.

"Bankers Trust's guilty plea should send a strong signal to all companies that negative consequences will flow from putting pressure on their executives and employees to generate revenues and meet expense targets with any means necessary," said U.S. Attorney Mary Jo White. "While a corporation, especially a financial institution -- naturally expresses concern and interest in the bottom line, it must at the same time ensure that it fosters a corporate culture requiring strict compliance with all applicable legal and ethical obligations."



8)(tie) Sears Bankruptcy Recovery Management Services
Type of Crime: Fraud
Criminal Fine: $60 million
13 Corporate Crime Reporter 7(1), February 15, 1999


A unit of Sears, Roebuck and Company pled guilty to bankruptcy fraud and agreed to pay a $60 million fine.

Sears Bankruptcy Recovery Management Services pled guilty to one count of bankruptcy fraud involving fraudulent reaffirmation practices that began in 1985 and continued until early 1997.

Sears has already paid over $180 million in restitution to about 188,000 debtors and $40 million in civil fines to 50 state attorneys general.

The $60 million criminal fine is the largest fine ever to be paid in a bankruptcy fraud case. The fine also is believed to be the largest criminal fine ever in Massachusetts, and one of the largest nationwide.

"Sears intentionally misled bankrupt debtors without attorneys and defrauded the Bankruptcy Court for over a decade," said U.S. Attorney Donald Stern said. "This was not the haphazard action of a few employees. It represented an outrageous company policy, carried out by those responsible for debt collection, which plainly violated federal law."

The fraudulent scheme involved Sears' practices relating to bankruptcy reaffirmation agreements. Such reaffirmation agreements, when executed in compliance with the Bankruptcy Code, have the effect of maintaining legally binding debts which would otherwise be discharged in bankruptcy. The discharge of debts is the principal benefit to a debtor filing for bankruptcy. The discharge prohibits all creditors from taking any collection action against the debtor for prebankruptcy debts that are not reaffirmed.

According to the criminal charges filed by the U.S. Attorney, beginning in 1985 and continuing until April, 1997, Sears and its subsidiary unit engaged in a scheme to induce bankruptcy debtors to enter into reaffirmation agreements concerning their credit card debts with Sears and lead them to believe that the agreements would be filed with the Bankruptcy Court and were binding contractual obligations, when in fact the agreements were not going to be filed and the debtors had no obligation to pay the debt.



10) Haarman & Reimer Corp.
Type of Crime: Antitrust
Criminal fine: $50 million
11 Corporate Crime Reporter 5(4), February 3, 1997


Haarman & Reimer Corp., a New Jersey-based subsidiary of the Germany-based pharmaceutical and chemical giant Bayer AG, pled guilty and agreed to pay a $50 million criminal fine for participating in an international conspiracy to fix prices and allocate sales in the citric acid market worldwide.

"This $50 million criminal fine sends a clear message to corporations around the world," said Attorney General Janet Reno. "We will not tolerate international conspiracies that defraud American consumers, and those companies that engage in collusive conduct will be punished."

11) Louisiana-Pacific Corporation
Type of Crime: Environmental
Criminal Fine: $37 million
12 Corporate Crime Reporter 23(1), June 8, 1998


Louisiana-Pacific Corporation pled guilty to 18 felonies, was fined $37 million, and was placed on five years probation.

The plea agreement, cut with the U.S. Attorney in Colorado, capped a six-year investigation of the nation's largest producer of oriented stranded board (OSB), a lamented structural wood panel that is used as a plywood substitute in residential and commercial construction.

The criminal investigation began in July 1992, when Dave Horan, a former Louisiana-Pacific supervisor at its Montrose, Colorado facility, filed a lawsuit against the company alleging that he had been fired because he refused to tamper with the Montrose mill's pollution monitoring equipment.

The investigation expanded to include both environmental and consumer fraud violations.

In its plea agreement, the company admitted it committed numerous criminal acts, including conspiring to violate the Clean Air Act and False Statement Act, tampering with the Montrose mill's air pollution monitor on 12 occasions by inserting foil into the monitor, pulling a protective lens off the monitor, miscalibrating the monitor, and turning it off, lying to the Colorado Department of Health about the number of times the Montrose mill violated the limits of its pollution permits, creating and submitting to the American Plywood Association non-representative samples of OSB that the Association used in its on-going quality assurance testing from 1990 to 1994, and misrepresenting to its customers that its OSB conformed to the quality assurance testing requirements of the Association.



12) Hoechst AG
Type of Crime: Antitrust
Criminal Fine: $36 million
12 Corporate Crime Reporter 19(6), May 10, 1999


The German chemical and pharmaceutical giant Hoechst AG pled guilty and agreed to pay a $36 million criminal fine for participating in a 17-year international conspiracy to fix prices and allocate market shares on the sale of sorbates in the United States and elsewhere.

Federal officials charged Hoechst AG and Bernd Romahn, former Marketing Manager of Hoechst's Food Ingredients Business Unit, with conspiring with unnamed sorbates producers to suppress and eliminate competition in the sorbates industry from 1979 until 1996.

In addition to the $36 million fine against the corporation, Romahn has agreed to pled guilty and pay a $250,000 criminal fine for his role in the conspiracy. As part of the plea agreements, Hoechst and Romahn have agreed to cooperate in the ongoing government investigation.



13) Damon Clinical Laboratories, Inc.
Type of Crime: Fraud
Criminal Fine: $35.2 million
10 Corporate Crime Reporter 39(6), October 14, 1996


Damon Clinical Laboratories, Inc., a unit of Corning Inc., pled guilty to a one-count criminal information charging the company with conspiring to defraud the United States by submitting false claims to the Medicare program.

The Corning paid $119 million in fines and penalties -- $35.2 million as a criminal fine and $83.7 to resolve related civil liabilities.

Federal officials said that the $119 million payment represents a recovery of three dollars for every one dollar that the company stole from federal and state health care programs.

"Faced with declining profits and a changing health care marketplace, Damon decided to cheat the Medicare program," said U.S. Attorney Donald Stern. "It did so by submitting literally millions of fraudulent claims for payment to federal and state health care programs for medically unnecessary laboratory tests. What was marketed as a LabScan was actually a massive lab scam."

Federal officials charged that the company bundled three different tests with certain blood panels, causing doctors to order tests that were not medically necessary for the treatment and diagnosis of Medicare beneficiaries.

After physicians had ordered the medically unnecessary tests, Damon then billed Medicare for the bundled tests, knowing that the tests were in fact not necessary.



14) C.R. Bard Inc.
Type of Crime: Food and drug
Criminal Fine: $30.9 million
7 Corporate Crime Reporter 41(1), October 25, 1993


C.R. Bard Inc., a heart catheter manufacturer, pled guilty to a 391 count criminal charge for marketing an unapproved medical device that caused at least 10 patients to undergo emergency heart surgery and at least one death.

The company paid $60.1 million in fines and penalties, including a $30.9 million criminal fine.

A heart catheter is a wire with a balloon like tip which is temporarily threaded into a person's coronary arteries by a doctor and then inflated in order to flatten material which is clogging the artery. The device widens the path through which blood can flow to the heart muscle.

The company pled guilty to conducting illegal experiments on people with the unapproved catheters, including illegal testing of catheters on people for the purpose of determining whether the catheters were safe and effective.

About 22,000 people had used the catheters before they were recalled in 1990.



15) Genentech Inc.
Type of Crime: Food and drug
Criminal Fine: $30 million
12 Corporate Crime Reporter 16(3), April 19, 1999


Genentech Inc., the San Francisco-based biotech and pharmaceutical company, pled guilty to marketing to doctors one of its most lucrative prescription drugs, Protropin, for uses which had not been approved by the Food and Drug Administration (FDA).

Genentech paid a $30 million criminal fine and $20 million in civil penalties.

Genentech will admit that from 1985 to 1994, it aggressively marketed Protropin, a synthetic human growth hormone, to doctors, hospitals, and others for use in the treatment of various medical conditions for which Protropin had not received FDA approval.

It is illegal under federal law for a drug company to market a drug for purposes which the FDA has not approved based on research and clinical trials.



16) Nippon Gohsei
Type of Crime: Antitrust
Criminal Fine: $21 million
12 Corporate Crime Reporter 29(3), July 19, 1999


Nippon Gohsei, a large Japanese chemical producer, pled guilty and agreed to pay a $21 million criminal fine for participating in a 17-year international conspiracy to suppress and eliminate competition in the foods preservatives industry.

In San Francisco, the Justice Department charged Nippon Gohsei Fine Chemicals Business Department with conspiring to fix, raise, and maintain prices, and allocate market shares on sorbates sold by them and unnamed co-conspirators from 1979 to 1996.

Sorbates are chemical preservatives used primarily in high-moisture and high-sugar foods such as cheese and other dairy products, baked goods, and other processed foods.

Roughly $200 million worth of sorbates, including potassium sorbate and sorbic acid, are sold annually worldwide.



17)(tie) Pfizer Inc.
Type of Crime: Antitrust
Criminal Fine: $20 million
12 Corporate Crime Reporter 30(1), July 26, 1999


Pfizer Inc. will pled guilty and agreed to pay criminal fines totaling $20 million for participating in two international price fixing conspiracies in the food additives industry.

Pfizer -- the fourth largest pharmaceutical company in the United States -- was charged with participating in a conspiracy to raise and fix prices and allocate market shares in the U.S. for a food preservative called sodium erythorbate, and to allocate customers and territories for a flavoring agent called maltol.

Federal officials charged Pfizer with conspiring with an unnamed sodium erythorbate producer to fix prices and allocate market shares on sodium erythorbate sales in the United States from 1992 to 1994.

Federal officials also charged the corporation with conspiring with an unnamed maltol producer to allocate customers and territories for sales of maltol in the United States and elsewhere from 1989 until 1995.

Sodium erythorbate is a chemical food preservative used to protect the color and flavor of meat, vegetables, and processed foods.

Maltol is a chemical food flavoring agent used primarily in fruit and caramel-flavored candies and beverages.

The two conspiracies affected more than $65 million in United States commerce.



17)(tie) Summitville Consolidated Mining Co. Inc.
Type of Crime: Environmental
Criminal Fine: $20 million
10 Corporate Crime Reporter 20(3) May 20, 1996


The Summitville Consolidated Mining Co. Inc. pled guilty to 40 counts of violating the Clean Water Act and other federal statutes at its Summitville Gold Mine operation in southwestern Colorado from 1984 to 1992. The company was fined $20 million.

The company pled guilty to one count of conspiracy, four counts of making false statements, five counts of failing to report under the Clean Water Act, and 30 counts of knowingly violating the Clean Water Act by making unauthorized discharges to waters of the United States.

As part of the plea agreement Summitville agreed to pay the maximum criminal fine of $500,000 on each count, for a total fine of $20 million.

Summitville, which opened in 1986, introduced a technology called "cyanide leaching" to extract gold from ore. This process, invented in Scotland and first used in South Africa, involves spraying cyanide solution on the ore to extract gold.

The cyanide waste that was left over was supposed to be stored in lined and covered ponds to prevent contact with local animals which can die if they drink the water. However, the cyanide solution did not stay in the ponds but leaked through the lining into nearby creeks. By 1990, a 16-mile stretch of the Alamosa river was biologically dead.



19)(tie) Lucas Western Inc.
Type of Crime: False Statements
Criminal Fine: $18.5 million
9 Corporate Crime Reporter 4(6), January 30, 1995


Lucas Western Industries, Inc., a subsidiary of Lucas Industries plc, the British defense contractor, pled guilty to 37 counts of submitting false statements to the U.S. Department of Defense and paid a criminal fine of $18.5 million.

Lucas falsely certified to the Defense Department that gearboxes it manufactured had been fully inspected. In fact, many required inspections had not been performed.

The charges focused on faulty gearboxes for two military programs -- the airframe mounted accessory drive for the Navy's F/A-18 aircraft and the aximuth drive unit gearbox for the Army's Multiple Launch Rocket System.



19)(tie) Rockwell International Corporation
Type of Crime: Environmental
Criminal Fine: $18.5 million
6 Corporate Crime Reporter 13(4), March 30, 1992


Rockwell International Corporation pled guilty to ten counts of environmental crimes at the Rocky Flats Nuclear Weapons Plant near Boulder, Colorado.

Rockwell pled guilty to four felony violations of the Resource Conservation and Recovery Act and to one felony and five misdemeanors of the Clean Water Act.

Federal officials charged that Rockwell illegally stored and treated hazardous wastes generated during the production of plutonium "triggers" and other components of nuclear weapons at Rocky Flats.

Federal officials also charged that Rockwell improperly and illegally discharged wastes through its sewage treatment plant, creating the potential for contamination by runoff to a reservoir used for drinking water.



21) Royal Caribbean Cruises Ltd.
Type of Crime: Environmental
Criminal Fine: $18 million
12 Corporate Crime Reporter 30(4), July 26, 1999


Royal Caribbean Cruises Ltd., one of the world's largest passenger cruise lines, pled guilty to 21 felony counts and agreed to pay a record $18 million criminal fine for dumping waste oil and hazardous chemicals and lying to the U.S. Coast Guard.

In a plea agreement, filed in federal courts in six cities, Royal Caribbean admitted that it routinely dumped waste oil from its fleet of cruise ships.

The company also pled guilty to the unprecedented charge that it deliberately dumped into U.S. harbors and coastal areas many other types of pollutants, including hazardous chemicals from photo processing equipment, dry cleaning shops and printing presses.

The $18 million fine is the largest ever to be paid by a cruise line in connection with polluting U.S. waters.

The plea agreements were filed in Miami, New York City, Los Angeles, Anchorage, St. Thomas, U.S. Virgin Islands, and, San Juan, Puerto Rico.

"Royal Caribbean used our nation's waters as its dumping ground, even as it promoted itself as an environmentally 'green' company," said Attorney General Janet Reno. "This case will sound like a foghorn throughout the entire maritime industry."

Under the terms of the plea agreement, the cruise ship operator will also pled guilty to deliberately storing waste from its ships at a Port of Miami pier without a permit, violating federal hazardous waste law.

Some hazardous materials, including toxic solvents from dry cleaning operations, were illegally placed in the garbage aboard the ships. The material was then either incinerated on the ship or dumped in U.S. or foreign ports mixed with ordinary garbage.



22) Teledyne Industries Inc.
Type of Crime: Fraud
Criminal Fine: $17.5 million
6 Corporate Crime Reporter 39(9), October 12, 1992


Teledyne Industries Inc. pled guilty to 35 counts of preparing and submitting false statements regarding the testing of electronic relays at its Teledyne Relays Division in Hawthorne, California.

Teledyne paid a $17.5 million criminal fine.

Federal officials alleged that the company sold commercial grade relay switches to the federal government while certifying that they had successfully met rigorous military testing requirements. The government pays a premium of nearly four times as much for the tested, military version of the switches as it would for the untested, commercial quality relay switch.



23) Northrop
Type of Crime: False statements
Criminal Fine: $17 million
4 Corporate Crime Reporter 9(1), March 5, 1990

Northrop pled guilty to 34 counts of providing false statements to the federal government over a three year period in connection with two military programs -- the Air Launched Cruise Missile and the Navy Harrier Jet.



24) Litton Applied Technology Division (ATD) and Litton Systems Canada (LSL)
Type of Crime: Fraud
Criminal Fine: $16.5 million
12 Corporate Crime Reporter 27(1), July 5, 1999


Two Litton Industries, Inc. units pled guilty to felony charges and agreed to pay $18.5 million in connection with the concealment of commissions paid to consultants who secured military sales to Taiwan and Greece.

Litton Applied Technology Division (ATD) and Litton Systems Canada (LSL) each pled guilty to one conspiracy count. LSL also pled guilty to additional charges of mail fraud and false statements.

The two Litton units agreed to pay $18.5 million -- which includes $16.5 million in criminal fines and $2 million in restitution.

The federal case against the Litton units involves a long-running conspiracy to defraud agencies of the United States and Taiwan in connection with Litton's military sales to governments of Taiwan and Greece.



25) Iroquois Pipeline Operating Company
Type of Crime: Environmental
Criminal Fine: $15 million
10 Corporate Crime Reporter 22(1), June 3, 1996


The Connecticut-based Iroquois Pipeline Operating Company and four of its high-level officers and supervisors pled guilty to numerous criminal violations of the Clean Water Act including failure to clean up or restore damage to nearly 200 streams and wetlands as a result of rushing to meet construction deadlines.

The company agreed to pay $22 million in criminal and civil fines -- including a $15 million criminal fine -- for violating federal environmental and safety laws.

The violations stem from the construction of one of the country's longest natural gas pipelines running 370 miles from Canada through upstate New York and Connecticut to Long Island.

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