Company President Pleads Guilty to Bid Rigging on Defense Contracts

Roger Jacobi pleaded guilty in the U.S. District Court for the Eastern District of New York to a felony charge of bid rigging. Under the plea agreement, Jacobi has agreed to pay a criminal fine of $20,000 and to cooperate with the Justice Department’s ongoing investigation.

Jacobi also could serve up to six months in prison, the Justice Department said. The terms of the plea agreement are subject to court approval.

According to the Department of Justice, Jacobi Industries provided military tie-down equipment and cargo securing systems to the Defense Department. The products are used to secure vehicles, aircraft, munitions, shipping containers and other specialized military cargo requirements for land, sea and air transportation.

Jacobi participated in the bid-rigging conspiracy from November 2001 to January 2005, the Justice Department said. During that time period, Jacobi and co-conspirators agreed that they would not submit prices or bids against each other on certain contracts.

Jacobi is charged with carrying out the conspiracy with co-conspirators by:

• Attending meetings and engaging in discussions regarding the sale of military tie-down equipment and cargo securing systems.
  
• Agreeing during those meetings and discussions not to compete on certain contracts with the Defense Department by not submitting prices or bids on those contracts.
  
• Submitting bids in accordance with the agreements reached.
  
• Selling military tie-down equipment and cargo securing systems to the Department of Defense under those agreements at collusive and non-competitive prices.
  
• Accepting payment for military tie-down equipment and cargo securing systems sold at the collusive and non-competitive prices.
  

“[The] charges demonstrate our ongoing commitment to prosecute those who deprive the U.S. military of the benefits of competitive bidding on taxpayer-funded contracts,” said Thomas Barnett, assistant attorney general in charge of the Justice Department’s Antitrust Division.

Ongoing investigation into military restraints industry

The Justice Department noted that the charge against Jacobi is the fourth case stemming from an ongoing investigation into the military restraints industry.

On July 10, Robert Fischetti, a former executive of a defense company, pleaded guilty to two counts of participating in separate conspiracies to rig bids on military tie-down equipment and cargo securing systems sold to the Department of Defense and metal sling hoist assemblies sold to the U.S. Navy. Fischetti also pleaded guilty to a third count of soliciting and accepting a kickback in connection with one or more subcontracts to paint, silkscreen or finish various parts manufactured and sold to the Defense Department.

Fischetti agreed to serve 10 months in prison and pay a $10,000 criminal fine, subject to court approval.

In February, two Pennsylvania executives—Thomas Cunningham and Richard Barko—pleaded guilty to rigging bids on Navy contracts for metal sling hoist assemblies. They currently are awaiting sentencing.

The Justice Department urged anyone with information concerning bid rigging or other anti-competitive conduct regarding contracts for military tie-down equipment and cargo securing systems or related products to call the National Criminal Enforcement Section of the Antitrust Division at (202) 307-6694 or the Long Island Office of the Defense Criminal Investigative Service at (631) 420-4302.