Korean Firms Admit to Rigging Fuel Prices at US Bases

(CN) – The Justice Department said Wednesday that three South Korean companies will pay a total of $236 million as part of a guilty plea and civil settlement over a scheme to rig prices for fuel sold to U.S. military bases in the Southeast Asian nation.

Prosecutors announced SK Energy Co. Ltd., GS Caltex Corporation, and Hanjin Transportation Co. Ltd. agreed to plead guilty to criminal conspiracy charges and pay $82 million in fines, plus $154 million to settle civil allegations of antitrust and False Claims Act violations.

The bid-rigging and price-fixing conspiracy ran from 2005 and 2016, according to the Justice Department, and involved SK Energy, GS Caltex, Hanjin and other refinery companies working together to eliminate competition in the bidding process for fuel supply contracts with the U.S. Department of Defense.

The U.S. military paid “substantially more” for fuel at its bases in South Korea than it would have if the three companies had competed for the contracts, prosecutors claim.

Under the civil settlement, SK Energy will pay $90.3 million, GS Caltex will pay $57.5 million and Hanjin will pay $6.2 million. They have also agreed to cooperate with the Justice Department’s ongoing criminal and civil investigations.

The criminal and civil charges were filed in Columbus, Ohio, federal court.

FBI Executive Assistant Director Amy Hess said in a statement that the government will hold both domestic and foreign corporations “accountable for anticompetitive conduct and fraudulent practices toward the United States.”

“The conduct by the corporations in this case is particularly egregious, as they targeted the U.S. military in a critically strategic region, defrauded the U.S. government, and ultimately, cheated the American taxpayers of millions of dollars,” she said.

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