• Uncategorized

DOJ’s Criminal Cartel Prosecution of Chicken Industry Expands Net — Koch Foods and Four Pilgrim’s Pride Executives Charged

The Justice Department’s Antitrust Division continues to target a sprawling cartel investigation of the chicken industry.  In its most recent action, the Justice Department announced an indictment of Koch Foods and four individual executives from Pilgrim’s Pride tying them into the broad price-fixing conspiracy for the sale of broiler chicken products to the restaurant and retail industries.

The expanding Justice Department investigation has charged 14 individuals and two corporations.  Pilgrim’s Pride has pleaded guilty and is cooperating.  Tysons Foods appears to be the lead leniency defendant that escaped any penalty or individual prosecutions.  The investigation is continuing a more indictments are expected.

Koch Foods issued a statement rejecting DOJ offers to plead guilty and instead reiterating its stance denying any involvement in the alleged conspiracy.

The alleged conspiracy occurred over the period between 2012 to 2019.

The initial indictment returned in June 2020 included Jayson Penn, the sitting President and then CEO of Pilgrim’s Pride.  In February 2021, Pilgrim’s Pride pleaded guilty and agreed to pay $107.9 million in criminal fines and cooperate with the ongoing probe.  A superseding indictment in October 2021 expended the case to 10 defendants, including William Kantola, Koch Foods’ senior vice president.

A separate indictment charged four Pilgrim’s Pride executives: Jason McGuire, a former vice president; Timothy Stiller, a former general manager; Wesley “Scott” Tucker, a former national accounts sales executive; and Justin Gay, a former director of fresh food service sales. 

The Koch Foods indictment outlines extensive text messages, telephone calls and communications among Koch, Claxton and other companies relating to the prices for various chicken products.  The text messages and emails confirm extensive communications, share pricing information, and negotiations with the purchaser.  Some emails attach a spreadsheet of competitors pricing and status of negotiations.  With respect to the telephone calls, the indictment does not include content of the communications but provides circumstantial evidence of contacts among the competing companies.

The separate indictment charging four employees from Pilgrim’s Pride outlines extensive communications among the four employees with competitors and agreement to pricing levels and bids with nationwide restaurant chains and retail grocers.  As in the other indictments, the four employees communicated with each other through text messages, emails and telephone conversations.

In a separate issue, six of ten charged defendants who have already been charged have filed motions complaining about lack of access to interview eight individuals who worked from from Pilgrim’s Pride.  The defendants claim that lack of access to these individuals is frustrating their ability to prepare for an upcoming trial.  The six defendants claim that the eight Pilgrim’s Pride employees possess exculpatory evidence.  The eight individuals allegedly will not speak to the defendants’ lawyers because they might violate the Pilgrim’s Pride plea agreement.

You may also like...