Rubber Industry Executive to Serve Jail Time

Charles Gillespie, former regional manager of Manuli Rubber Industries, a Milan-based marine hose manufacturer, pleaded guilty to conspiracy charges late last week in federal court. Prosecutors charged Gillespie with conspiracy related to the rigging of bids and price fixing in the marine hose markets in the US and abroad.^[1]

Under the terms of the plea, Gillespie agreed to serve one year in jail and pay a $20,000 fine. Department of Justice (DOJ) officials touted the plea as a positive step in their continued efforts in the area of international anti-trust prosecutions. “The Antitrust Division will continue to vigorously pursue and prosecute international cartels,” said Thomas O. Barnett, Assistant Attorney General, Antitrust Division. “Those who conspire to harm U.S. consumers will be held accountable for their illegal actions.”^[2]

Marine hose is the flexible rubber hose used to transfer oil from sea-based tankers and storage containers. The actions by Gillespie and Manuli Rubber affected the prices of hundreds of millions of dollars worth of marine hose, according to the DOJ, which then affected extraction and transportation of petroleum products in the US and abroad.^[3]

Eight foreign executives were arrested in San Francisco and Houston during May of 2007, charged for their roles in the conspiracy. Two of those executives, Bryan Allison and David Brammar of Dunlop Oil and Marine in Grimsby, UK, pleaded guilty to conspiracy in December. Peter Whittle, formerly of Dunlop and now of PW Consulting, also pleaded guilty. The three will serve sentences ranging from 20-30 months in prison, which represent the longest anti-trust related sentences ever agreed to by foreign nationals. Allison, Brammar, and Whittle also face charges in the UK, where they are currently serving their sentences.^[4]

Christian Caleca and Jacques Cognard of Trelleborg Industrie also pleaded guilty in November of 2007, and both were sentenced to 14 months in prison. Two other alleged co-conspirators, Francesco Scaglia and Val Northcutt, also of Manuli Rubber Industries, are set to go on trial in May. No trial date has been set for the final two indictees, Vanni Scodeggion of Parker ITR and Misao Hioki of Bridgestone Corporation in Japan.^[5]

Gillespie was charged with violating the Sherman Act, and could have been sentenced to 10 years in prison and at least $1 million in fines. ^[6]

Additional information on similar cases can be found in both the Federal Crimes Blog, as well as the Transnational Crimes Blog.


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[1] US Department of Justice Press Release, April 17, 2008 (available at www.usdoj.gov).

[2] Id.

[3] Id.

[4] Id.

[5] Id.

[6] Id.