Florida Company Pleads Guilty to Conspiring to Rig Bids at U.S. Postal Service Auction in Atlanta

Jun 26, 2007, 01:00 ET from U.S. Department of Justice

    WASHINGTON, June 26 /PRNewswire-USNewswire/ -- A Florida company today
 pleaded guilty to conspiring to rig bids on merchandise offered at a U.S.
 Postal Service (USPS) auction in Atlanta, the Department of Justice
     According to the one-count felony charge filed in the U.S. District
 Court in Atlanta, Denny's Pay-Less Grocery Inc. of Jacksonville, Fla.,
 participated in a conspiracy to rig bids on merchandise offered for sale at
 auction by the USPS at its Atlanta mail recovery center from approximately
 August 2002 to October 2002. The Department said that the purpose of the
 conspiracy was to lower the price Denny's Pay-Less Grocery and its major
 competitor paid for auction lots and to divide those lots between them.
 Denny's Pay-Less Grocery buys and sells closeout, salvage and surplus
     "Americans are entitled to the benefits of competitive bidding and we
 will prosecute those who seek to subvert that process," said Thomas O.
 Barnett, Assistant Attorney General in charge of the Department of
 Justice's Antitrust Division.
     The Department charged that Denny's Pay-Less Grocery and its co-
 conspirators carried out the conspiracy by:
     -- Discussing among themselves collusive bidding and how to decrease the
        amount of money they were paying for lots of a certain type of
        merchandise being auctioned by USPS; and
     -- Agreeing that they would seek to divide up and successfully dividing up
        lots of a certain type of merchandise by engaging in collusive bidding
        designed to minimize the price they would pay for the lots.
     Denny's Pay-Less Grocery is charged with bid rigging in violation of
 the Sherman Act. The maximum fine for a corporation is $10 million for
 violations occurring before June 22, 2004. The maximum fine may be
 increased to twice the gain derived from the crime or twice the loss
 suffered by the victims of the crime if either of those amounts is greater
 than the statutory maximum fine. In addition, those charged could be
 ordered to pay restitution to any victim for the full amount of the
 victim's loss.
     The ongoing investigation is being conducted by the Antitrust
 Division's Atlanta Field Office, with the assistance of the USPS Inspector
 General's Office in Atlanta.
     Today's plea agreement is an example of the Department's commitment to
 protect U.S. taxpayers from public procurement fraud through its creation
 of the National Procurement Fraud Task Force. The National Procurement
 Fraud Initiative announced in October 2006 is designed to promote the early
 detection, identification, prevention and prosecution of procurement fraud
 associated with the increase in contracting activity for national security
 and other government programs.
     Anyone with information concerning bid rigging or other anticompetitive
 conduct concerning USPS auctions should contact the Atlanta Field Office of
 the Antitrust Division at 404-331-7100.

SOURCE U.S. Department of Justice