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Puerto Rico Steel Executive Admits Guilt in Major Price-Fixing Case

By  |  September 1, 2024
price-fixing

An executive from a prominent steel distribution company in Carolina, Puerto Rico, has pleaded guilty to charges related to a price-fixing scheme. Edgardo Sola Colon, the president of the steel distributor and a former leader at another major firm in Puerto Rico, admitted to conspiring with rivals to manipulate rebar prices. Rebar, a crucial material for construction projects on the island, is largely imported from overseas or the continental U.S. and is distributed by a few key players.

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    According to court documents submitted to the U.S. District Court in San Juan, Sola and his competitors controlled about 70% of Puerto Rico’s wholesale rebar market. Between 2015 and 2022, including during the recovery period following Hurricanes Irma and Maria, Sola worked with other companies to suppress competition by fixing prices for rebar and other steel products. This collusion led to significant financial gains for the involved parties.

    Per a statement, communications between Sola and his competitors included WhatsApp messages where they agreed on rebar prices and price hikes. In one instance from December 2020, Sola and Juan Carlos Aponte, an executive at a competing firm, discussed and confirmed specific rebar prices through chat, demonstrating their coordination.

    Related: Crabbers Expand Price-Fixing Lawsuit Against Northwest Processors

    Sola’s plea agreement revealed that his companies’ sales, exceeding $50 million, were impacted by this illegal price-fixing activity. Aponte, who pleaded guilty on August 7 for his role in the same scheme, is now awaiting sentencing.

    Deputy Assistant Attorney General Manish Kumar emphasized the Antitrust Division’s commitment to combating such anti-competitive practices. “This guilty plea highlights our ongoing effort to hold accountable those who engage in collusion to inflate prices and harm consumers and businesses,” Kumar said.

    Violations of the Sherman Act, under which Sola was charged, are classified as felonies. Individuals found guilty face up to 10 years in prison and fines up to $1 million, while corporations can be fined up to $100 million. Penalties can be increased based on the crime’s impact and the profits gained.

    Sola is scheduled for sentencing on December 16, with the court considering the U.S. Sentencing Guidelines and other relevant factors. The case was investigated by the Antitrust Division’s Washington Criminal Section and the FBI’s San Juan Field Office, with prosecution led by trial attorneys April Ayers-Perez, Alison Friberg, Taylor Bernhardt, and Senior Litigation Counsel John Davis.

    Source: Justice Gov