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DOJ Takes a Cue from ‘Catch Me If You Can’ with Price-Fixing Plea Agreement

 |  March 20, 2024

By: Justin P. Murphy & Matt Schock (BakerHostetler)

The 2002 hit film “Catch Me If You Can” vividly portrays the escapades of Frank Abagnale Jr., a notorious check fraudster, as he narrowly evades capture and eventually faces apprehension by American law enforcement overseas. In an intriguing twist at the film’s conclusion, the FBI extends an offer of clemency to Frank: join our ranks. Frank accepts, leveraging his expertise to assist the FBI in enforcing the very laws he once flouted.

This narrative finds a contemporary parallel. Recently, the Department of Justice’s Antitrust Division adopted a similar approach in a plea agreement, introducing an imaginative and potentially groundbreaking tactic in U.S. competition enforcement: a sentence of community service, involving collaboration with the Division on antitrust compliance and education regarding the resolution of international fugitive cases. Coupled with conventional plea agreement terms, this requirement reflects the Division’s ongoing commitment to innovative strategies in combating alleged illegal activities and enhancing public understanding of U.S. antitrust legislation.

The Case In early 2019, amid a series of criminal prosecutions linked to promotional products, the Division indicted G Nova Corporation, based in Taiwan, and its CEO Yeh Fei Chu, also known as Jim Chu, for conspiring to fix prices for customized foam Koozies (United States v. Chu et al., No. 4-19-cr-00070 (S.D. Tex.)). According to the plea agreement, G Nova and Chu served as intermediaries between two competing U.S.-based customized Koozie sellers, coordinating and sustaining price-fixing through electronic communications, phone calls, and face-to-face meetings. This collusion allegedly persisted from around May 2012 until at least February 2014, supported by publicly accessible pricing data.

As per the case docket, Chu had resided in Taiwan since at least his January 2019 indictment; however, through negotiations with the Division, he agreed to return voluntarily to the U.S. to enter a guilty plea (Dkt. No. 20). This plea was recently formalized and filed in the Southern District of Texas (Dkt. No. 34).

The Plea Agreement The plea agreement entails a significant $300,000 criminal fine for Chu, deemed commensurate with the corporate fine that would have been imposed on Chu’s dissolved company, G Nova. Notably, the agreement explicitly recommends against imprisonment and instead advocates for a two-year probationary sentence. Additionally, the agreement introduces a distinctive requirement for community service: