INTRODUCTION
Every year, the major business magazines put out their annual surveys of big business in America.
You have the Fortune 500, the Forbes 400, the Forbes Platinum 100, the International 800 -- among others.
These lists rank big corporations by sales, assets, profits and market share. The point of these surveys is simple -- to identify and glorify the biggest and most profitable corporations.
The point of the list contained in this report, The Top 100 Corporate Criminals of the Decade -- is to focus public attention on a wave of corporate criminality that has swamped prosecutors offices around the country.
This is the dark underside of the marketplace that is given little sustained attention and analysis by politicians and news outlets.
To compile The Top 100 Corporate Criminals of the 1990s, we used the most narrow and conservative of definitions -- corporations that have pled guilty or no contest to crimes and have been criminally fined.
The 100 corporate criminals fell into 14 categories of crime: Environmental (38), antitrust (20), fraud (13), campaign finance (7), food and drug (6), financial crimes (4), false statements (3), illegal exports (3), illegal boycott (1), worker death (1), bribery (1), obstruction of justice (1) public corruption (1), and tax evasion (1).
We did not try to assess and compare the damage committed by these corporate criminals or by other corporate wrongdoers.
There are millions of Americans who care about morality in the marketplace.
But few Americans realize that when they buy Exxon stock, or when they fill up at an Exxon gas station, they are in fact supporting a criminal recidivist corporation.
And few Americans realize that when the take a ride on a cruise ship owned by Royal Caribbean Cruise Lines, they are riding on a ship owned by a criminal recidivist corporation.
Six corporations that made the list of the Top 100 Corporate Criminals were criminal recidivist companies during the 1990s.
In addition to Exxon and Royal Caribbean, Rockwell International, Warner-Lambert, Teledyne, and United Technologies each pled guilty to more than one crime during the 1990s.
A few caveats about this report.
Caveat one: Big companies that are criminally prosecuted represent only the tip of a very large iceberg of corporate wrongdoing.
For every company convicted of health care fraud, there are hundreds of others who get away with ripping off Medicare and Medicaid, or face only mild slap-on-the-wrist fines and civil penalties when caught.
For every company convicted of polluting the nation's waterways, there are many others who are not prosecuted because their corporate defense lawyers are able to offer up a low-level employee to go to jail in exchange for a promise from prosecutors not to touch the company or high-level executives.
For every corporation convicted of bribery or of giving money directly to a public official in violation of federal law, there are thousands who give money legally through political action committees to candidates and political parties. They profit from a system that effectively has legalized bribery.
For every corporation convicted of selling illegal pesticides, there are hundreds more who are not prosecuted because their lobbyists have worked their way in Washington to ensure that dangerous pesticides remain legal.
For every corporation convicted of reckless homicide in the death of a worker, there are hundreds of others that don't even get investigated for reckless homicide when a worker is killed on the job. Only a few district attorneys across the country (Michael McCann, the DA in Milwaukee County, Wisconsin, being one) regularly investigate workplace deaths as homicides.
Caveat two: Corporations define the laws under which they live.
For example, the automobile industry over the past 30 years has worked its will on Congress to block legislation that would impose criminal sanctions on knowing and willful violations of the federal auto safety laws. Now, if an auto company is caught violating the law, and if the cops are not asleep at the wheel, only a civil fine is imposed.
Caveat three: Because of their immense political power, big corporations have the resources to defend themselves in courts of law and in the court of public opinion.
Few prosecutors are willing to subject themselves to the constant legal and public relations barrage that a corporation's well connected and high-priced legal talent can inflict.
It is a testament to the tenacity of a few dedicated federal prosecutors that Royal Caribbean Cruise Lines, for example, was criminally convicted of polluting the oceans.
In the criminal prosecution of Royal Caribbean Cruise Lines the company was facing a team of two federal criminal prosecutors.
To defend itself, Royal Caribbean hired Judson Starr and Jerry Block, both of whom have served as head of the Justice Department's Environmental Crimes Section, and former Attorney General Benjamin Civiletti.
Also representing Royal Caribbean were former federal prosecutors Kenneth C. Bass III, and Norman Moscowitz. Donald Carr of Winthrop & Stimson also joined the defense team.
Hired on as experts on international law issues were former Attorney General Eliot Richardson, University of Virginia law professor John Norton Moore, former State Department officials Terry Leitzell and Bernard Oxman, and four retired senior admirals.
As the case proceeded to trial, Royal Caribbean engaged in a massive public relations campaign, taking out ads during the Super Bowl, putting former Environmental Protection Agency (EPA) Administrators on its board of directors, and donating thousands of dollars to environmental groups.
Federal prosecutors overcame this legal and public relations barrage and convicted the company. But that was an unusual prosecution and unusually determined prosecutors.
While the 1990s was a decade of booming markets and booming profits, it was also a decade of rampant corporate criminality.
There is an emerging consensus among corporate criminologists.
And that emerging consensus is this: corporate crime and violence inflicts far more damage on society than all street crime combined.
The FBI estimates, for example, that burglary and robbery -- street crimes -- costs the nation $3.8 billion a year.
Compare this to the hundreds of billions of dollars stolen from Americans as a result of corporate and white-collar fraud.
Health care fraud alone costs Americans $100 billion to $400 billion a year.
The savings and loan fraud -- which former Attorney General Dick Thornburgh called "the biggest white collar swindle in history" -- cost us anywhere from $300 billion to $500 billion.
And then you have your lesser frauds: auto repair fraud, $40 billion a year, securities fraud, $15 billion a year -- and on down the list.
Recite this list of corporate frauds and people will immediately say to you: but you can't compare street crime and corporate crime -- corporate crime is not violent crime.
Unfortunately, corporate crime is often violent crime.
The FBI estimates that, 19,000 Americans are murdered every year.
Compare this to the 56,000 Americans who die every year on the job or from occupational diseases such as black lung and asbestosis and the tens of thousands of other Americans who fall victim to the silent violence of pollution, contaminated foods, hazardous consumer products, and hospital malpractice.
These deaths are often the result of criminal recklessness. They are sometimes prosecuted as homicides or as criminal violations of federal laws.
And environmental crimes often result in death, disease and injury.
In 1998, for example, a Tampa, Florida company and the company's plant manager were found guilty of violating a federal hazardous waste law. Those illegal acts resulted in the deaths of two nine-year-old boys who were playing in a dumpster at the company's facility.
This report is only a tiny step in an effort to fill a great void in corporate crime research.
The Justice Department has the information and should get the budget to begin putting out yearly reports on corporate crime.
Every year, the Justice Department puts out an annual report titled "Crime in the United States."
But by "Crime in the United States," the Justice Department means "street crime in the United States."
So, in "Crime in the United States" document you will read about burglary, robbery and theft. There is nothing in it about price-fixing, corporate fraud, pollution, or public corruption.
A yearly Justice Department report on Corporate Crime in the United States is long overdue.
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THE TOP 100 CORPORATE CRIMINALS OF THE 1990's
1) F. Hoffmann-La Roche Ltd.
Type of Crime: Antitrust
Criminal Fine: $500 million
12 Corporate Crime Reporter 21(1), May 24, 1999
2) Daiwa Bank Ltd.
Type of Crime: Financial
Criminal Fine: $340 million
10 Corporate Crime Reporter 9(3), March 4, 1996
3) BASF Aktiengesellschaft
Type of Crime: Antitrust
Criminal Fine: $225 million
12 Corporate Crime Reporter 21(1), May 24, 1999
4) SGL Carbon Aktiengesellschaft (SGL AG)
Type of Crime: Antitrust
Criminal Fine: $135 million
12 Corporate Crime Reporter 19(4), May 10, 1999
5) Exxon Corporation and Exxon Shipping
Type of Crime: Environmental
Criminal Fine: $125 million
5 Corporate Crime Reporter 11(3), March 18, 1991
6) UCAR International, Inc.
Type of Crime: Antitrust
Criminal Fine: $110 million
12 Corporate Crime Reporter 15(6), April 13, 1998
7) Archer Daniels Midland
Type of Crime: Antitrust
Criminal Fine: $100 million
10 Corporate Crime Reporter 40(1), October 21, 1996
8)(tie) Banker's Trust
Type of Crime: Financial
Criminal Fine: $60 million
12 Corporate Crime Reporter 11(1), March 15, 1999
8)(tie) Sears Bankruptcy Recovery Management Services
Type of Crime: Fraud
Criminal Fine: $60 million
13 Corporate Crime Reporter 7(1), February 15, 1999
10) Haarman & Reimer Corp.
Type of Crime: Antitrust
Criminal fine: $50 million
11 Corporate Crime Reporter 5(4), February 3, 1997
11) Louisiana-Pacific Corporation
Type of Crime: Environmental
Criminal Fine: $37 million
12 Corporate Crime Reporter 23(1), June 8, 1998
12) Hoechst AG
Type of Crime: Antitrust
Criminal Fine: $36 million
12 Corporate Crime Reporter 19(6), May 10, 1999
13) Damon Clinical Laboratories, Inc.
Type of Crime: Fraud
Criminal Fine: $35.2 million
10 Corporate Crime Reporter 39(6), October 14, 1996
14) C.R. Bard Inc.
Type of Crime: Food and drug
Criminal Fine: $30.9 million
7 Corporate Crime Reporter 41(1), October 25, 1993
15) Genentech Inc.
Type of Crime: Food and drug
Criminal Fine: $30 million
12 Corporate Crime Reporter 16(3), April 19, 1999
16) Nippon Gohsei
Type of Crime: Antitrust
Criminal Fine: $21 million
12 Corporate Crime Reporter 29(3), July 19, 1999
17)(tie) Pfizer Inc.
Type of Crime: Antitrust
Criminal Fine: $20 million
12 Corporate Crime Reporter 30(1), July 26, 1999
17)(tie) Summitville Consolidated Mining Co. Inc.
Type of Crime: Environmental
Criminal Fine: $20 million
10 Corporate Crime Reporter 20(3) May 20, 1996
19)(tie) Lucas Western Inc.
Type of Crime: False Statements
Criminal Fine: $18.5 million
9 Corporate Crime Reporter 4(6), January 30, 1995
19)(tie) Rockwell International Corporation
Type of Crime: Environmental
Criminal Fine: $18.5 million
6 Corporate Crime Reporter 13(4), March 30, 1992
21) Royal Caribbean Cruises Ltd.
Type of Crime: Environmental
Criminal Fine: $18 million
12 Corporate Crime Reporter 30(4), July 26, 1999
22) Teledyne Industries Inc.
Type of Crime: Fraud
Criminal Fine: $17.5 million
6 Corporate Crime Reporter 39(9), October 12, 1992
23) Northrop
Type of Crime: False statements
Criminal Fine: $17 million
4 Corporate Crime Reporter 9(1), March 5, 1990
24) Litton Applied Technology Division (ATD) and Litton Systems Canada (LSL)
Type of Crime: Fraud
Criminal Fine: $16.5 million
12 Corporate Crime Reporter 27(1), July 5, 1999
25) Iroquois Pipeline Operating Company
Type of Crime: Environmental
Criminal Fine: $15 million
10 Corporate Crime Reporter 22(1), June 3, 1996
26) Eastman Chemical Company
Type of Crime: Antitrust
Criminal Fine: $11 million
12 Corporate Crime Reporter 38(5), October 5, 1998
27) Copley Pharmaceutical, Inc.
Type of Crime: Food and drug
Criminal Fine: $10.65 million
11 Corporate Crime Reporter 22(1), June 2, 1997
28) Lonza AG
Type of Crime: Antitrust
Criminal Fine: $10.5 million
12 Corporate Crime Reporter 10(1), March 8, 1999
29) Kimberly Home Health Care Inc.
Type of Crime: Fraud
Criminal Fine: $10.08 million
12 Corporate Crime Reporter 30(6), July 26, 1999
30)(tie) Ajinomoto Co. Inc.
Type of Crime: Antitrust
Criminal Fine: $10 million
10 Corporate Crime Reporter 40(1), October 21, 1996
30)(tie) Bank of Credit and Commerce International (BCCI)
Type of Crime: Financial
Criminal Fine: $10 million
4 Corporate Crime Reporter 3(1) January 22, 1990
30)(tie) Kyowa Hakko Kogyo Co. Ltd.
Type of Crime: Antitrust
Criminal Fine: $10 million
10 Corporate Crime Reporter 40(1), October 21, 1996
30)(tie) Warner-Lambert Company
Type of Crime: Food and drug
Criminal Fine: $10 million
9 Corporate Crime Reporter 46(1), December 4, 1995
34) General Electric
Type of Crime: Fraud
Criminal Fine: $9.5 million
6 Corporate Crime Reporter 30(7), July 27, 1992
35)(tie) Royal Caribbean Cruises Ltd.
Type of Crime: Environmental
Criminal Fine: $9 million
12 Corporate Crime Reporter 23(3), June 8, 1998
35)(tie) Showa Denko Carbon
Type of Crime: Antitrust
Criminal Fine: $9 million
12 Corporate Crime Reporter 19(4), May 10, 1999
37) IBM East Europe/Asia Ltd.
Type of Crime: Illegal exports
Criminal Fine: $8.5 million
12 Corporate Crime Reporter 32(1), August 10, 1998
38) Empire Sanitary Landfill Inc.
Type of crime: Campaign finance
Criminal fine: $8 million
11 Corporate Crime Reporter 39(3), October 13, 1997
39)(tie) Colonial Pipeline Company
Type of Crime: Environmental
Criminal Fine: $7 million
13 Corporate Crime Reporter 9(3), March 1, 1999
39)(tie) Eklof Marine Corporation
Type of Crime: Environmental
Criminal Fine: $7 million
11 Corporate Crime Reporter 37(4), September 29, 1997
41)(tie) Chevron
Type of Crime: Environmental
Criminal Fine: $6.5 million
6 Corporate Crime Reporter, 22(1), June 1, 1992
41)(tie) Rockwell International Corporation
Type of Crime: Environmental
Criminal Fine: $6.5 million
10 Corporate Crime Reporter 15(4), April 15, 1996
43) Tokai Carbon Ltd. Co.
Type of Crime: Antitrust
Criminal Fine: $6 million
12 Corporate Crime Reporter 19(4), May 10, 1999
44)(tie) Allied Clinical Laboratories, Inc.
Type of Crime: Fraud
Criminal Fine: $5 million
10 Corporate Crime Reporter 45(1), November 25, 1996
44)(tie) Northern Brands International Inc.
Type of Crime: Fraud
Criminal Fine: $5 million
13 Corporate Crime Reporter 1(1), January 4,1999
44)(tie) Ortho Pharmaceutical Corporation
Type of Crime: Obstruction of justice
Criminal Fine: $5 million
9 Corporate Crime Reporter 2(3), January 16, 1995
44)(tie) Unisys
Type of Crime: Bribery
Criminal Fine: $5 million
5 Corporate Crime Reporter 35(11), September 16, 1991
44)(tie) Georgia Pacific Corporation
Type of Crime: Tax evasion
Criminal Fine: $5 million
5 Corporate Crime Reporter 38(8), October 7, 1991
49) Kanzaki Specialty Papers Inc.
Type of Crime: Antitrust
Criminal Fine: $4.5 million
8 Corporate Crime Reporter 29(4), July 18, 1994
50) ConAgra Inc.
Type of Crime: Fraud
Criminal Fine: $4.4 million
11 Corporate Crime Reporter 12(1), March 24, 1997
51) Ryland Mortgage Company
Type of Crime: Financial
Criminal Fine: $4.2 million
12 Corporate Crime Reporter 32(1), August 10, 1998
52)(tie) Blue Cross Blue Shield of Illinois
Type of Crime: Fraud
Criminal Fine: $4 million
12 Corporate Crime Reporter 29(1), July 20, 1998
52)(tie) Borden Inc.
Type of Crime: Antitrust
Criminal Fine: $4 million
4 Corporate Crime Reporter 11(9), March 19, 1990
52)(tie) Dexter Corporation
Type of Crime: Environmental
Criminal Fine: $4 million
6 Corporate Crime Reporter 35(6), September 14, 1992
52)(tie) Southland Corporation
Type of Crime: Antitrust
Criminal Fine: $4 million
4 Corporate Crime Reporter 11(9), March 19, 1990
52)(tie) Teledyne Industries Inc.
Type of Crime: Illegal exports
Criminal Fine: $4 million
9 Corporate Crime Reporter 5(3), February 6, 1995
52)(tie) Tyson Foods Inc.
Type of Crime: Public corruption
Criminal Fine: $4 million
12 Corporate Crime Reporter 1(3), January 5, 1998
58)(tie) Aluminum Company of America (ALCOA)
Type of Crime: Environmental
Criminal Fine: $3.75 million
5 Corporate Crime Reporter 29(6), July 22, 1991
58)(tie) Costain Coal Inc.
Type of Crime: Worker Death
Criminal Fine: $3.75 million
7 Corporate Crime Reporter 9(10), March 1, 1993
58)(tie) United States Sugar Corporation
Type of Crime: Environmental
Criminal Fine: $3.75 million
5 Corporate Crime Reporter 27(4), December 9, 1991
61) Saybolt, Inc., Saybolt North America
Type of Crime: Environmental
Criminal Fine: $3.4 million
12 Corporate Crime Reporter 33(1), August 17, 1998
62)(tie) Bristol-Myers Squibb
Type of Crime: Environmental
Criminal Fine: $3 million
6 Corporate Crime Reporter 18(3), May 4, 1992
62)(tie) Chemical Waste Management Inc.
Type of Crime: Environmental
Criminal Fine: $3 million
6 Corporate Crime Reporter 40(5), October 19, 1992
62)(tie) Ketchikan Pulp Company
Type of Crime: Environmental
Criminal Fine: $3 million
9 Corporate Crime Reporter 13(1), April 3, 1995
62)(tie) United Technologies Corporation
Type of Crime: Environmental
Criminal Fine: $3 million
5 Corporate Crime Reporter 21(1), May 27, 1991
62)(tie) Warner-Lambert Inc.
Type of Crime: Environmental
Criminal Fine: $3 million
11 Corporate Crime Reporter 37(3), September 29, 1997
67)(tie) Arizona Chemical Co. Inc.
Type of Crime: Environmental
Criminal Fine: $2.5 million
10 Corporate Crime Reporter 39(5), October 14, 1996
67)(tie) Consolidated Rail Corporation (Conrail)
Type of Crime: Environmental
Criminal Fine: $2.5 million
9 Corporate Crime Reporter 30(1), July 31, 1995
69) International Paper
Type of Crime: Environmental
Criminal Fine: $2.2 million
5 Corporate Crime Reporter 31(7), August 5, 1991
70)(tie) Consolidated Edison Company
Type of Crime: Environmental
Criminal Fine: $2 million
8 Corporate Crime Reporter 46(5), November 28, 1994
70)(tie) Crop Growers Corporation
Type of Crime: Campaign finance
Criminal fine: $2 million
11 Corporate Crime Reporter 4(3), January 27, 1997
70)(tie) E-Systems Inc.
Type of Crime: Fraud
Criminal Fine: $2 million
4 Corporate Crime Reporter 33, September 3, 1990
70)(tie) HAL Beheer BV
Type of Crime: Environmental
Criminal Fine: $2 million
12 Corporate Crime Reporter 39(4), October 12, 1998
70)(tie) John Morrell and Company
Type of Crime: Environmental
Criminal Fine: $2 million
10 Corporate Crime Reporter 6(3), February 12, 1996
70)(tie) United Technologies Corporation
Type of Crime: Fraud
Criminal Fine: $2 million
6 Corporate Crime Reporter 34(4), September 7, 1992
76) Mitsubishi Corporation, Mitsubishi International Corporation
Type of Crime: Antitrust
Criminal Fine: $1.8 million
8 Corporate Crime Reporter 29(4), July 18, 1994
77)(tie) Blue Shield of California
Type of Crime: Fraud
Criminal Fine: $1.5 million
10 Corporate Crime Reporter 18(3), May 6, 1996
77)(tie) Browning-Ferris Inc.
Type of Crime: Environmental
Criminal Fine: $1.5 million
12 Corporate Crime Reporter 23(3), June 8, 1998
77)(tie) Odwalla Inc.
Type of Crime: Food and drug
Criminal Fine: $1.5 million
12 Corporate Crime Reporter 30(1), July 27, 1998
77)(tie) Teledyne Inc.
Type of Crime: False statements
Criminal Fine: $1.5 million
7 Corporate Crime Reporter 34(12), September 6, 1993
77)(tie) Unocal Corporation
Type of Crime: Environmental
Criminal Fine: $1.5 million
8 Corporate Crime Reporter 12(8), March 21, 1994
82)(tie) Doyon Drilling Inc.
Type of Crime: Environmental
Criminal Fine: $1 million
12 Corporate Crime Reporter 21(1), May 25, 1998
82)(tie) Eastman Kodak
Type of Crime: Environmental
Criminal Fine: $1 million
4 Corporate Crime Reporter 14(1), April 9, 1990
82)(tie) Case Corporation
Type of Crime: Illegal exports
Criminal Fine: $1 million
10 Corporate Crime Reporter 22(4), June 3, 1996
85) Marathon Oil
Type of Crime: Environmental
Criminal Fine: $900,000
5 Corporate Crime Reporter 22(5), June 3, 1991
86) Hyundai Motor Company
Type of Crime: Campaign finance
Criminal Fine: $600,000
9 Corporate Crime Reporter 48(3), December 18, 1995
87)(tie) Baxter International Inc.
Type of Crime: Illegal Boycott
Criminal Fine: $500,000
7 Corporate Crime Reporter 13(7) , March 29, 1993
87)(tie) Bethship-Sabine Yard
Type of Crime: Environmental
Criminal Fine: $500,000
9 Corporate Crime Reporter 26(4), July 3, 1995
87(tie) Palm Beach Cruises
Type of Crime: Environmental
Criminal Fine: $500,000
12 Corporate Crime Reporter 30(4), July 26, 1999
87)(tie) Princess Cruises Inc.
Type of Crime: Environmental
Criminal Fine: $500,000
12 Corporate Crime Reporter 30(4), July 26, 1999
91)(tie) Cerestar Bioproducts BV
Type of Crime: Antitrust
Criminal Fine: $400,000
12 Corporate Crime Reporter 28(3), June 29, 1998
91)(tie) Sun-Land Products of California
Type of Crime: Campaign finance
Criminal Fine: $400,000
12 Corporate Crime Reporter 33(1), August 17, 1998
93)(tie) American Cyanamid
Type of Crime: Environmental
Criminal Fine: $250,000
4 Corporate Crime Reporter 46(5), December 3, 1990
93)(tie) Korean Air Lines
Type of Crime: Campaign finance
Criminal Fine: $250,000
9 Corporate Crime Reporter 47(1), December 11, 1995
93)(tie) Regency Cruises Inc.
Type of Crime: Environmental
Criminal Fine: $250,000
12 Corporate Crime Reporter 30(4), July 26, 1999
96)(tie) Adolph Coors Company
Type of Crime: Environmental
Criminal Fine: $200,000
4 Corporate Crime Reporter 43(3), November 12, 1990
96)(tie) Andrew and Williamson Sales Co.
Type of crime: Food and drug
Criminal fine: $200,000
11 Corporate Crime Reporter 44(4), November 17, 1997
96)(tie) Daewoo International (America) Corporation
Type of Fine: Campaign finance
Criminal Fine: $200,000
10 Corporate Crime Reporter 13(3), April 1, 1996
96)(tie) Exxon Corporation
Type of Crime: Environmental
Criminal Fine: $200,000
5 Corporate Crime Reporter 12(1), March 25, 1991
100) Samsung America Inc.
Type of Crime: Campaign finance
Criminal Fine: $150,000
10 Corporate Crime Reporter 6(5), February 12, 1996
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THE TOP 100 CORPORATE CRIMINALS OF THE 1990's
1) F. Hoffmann-La Roche Ltd.
Type of Crime: Antitrust
Criminal Fine: $500 million
12 Corporate Crime Reporter 21(1), May 24, 1999
The Swiss pharmaceutical giant, F. Hoffmann-La Roche Ltd., pled guilty and agreed to pay a record $500 million criminal fine for leading a worldwide conspiracy to raise and fix prices and allocate market shares for certain vitamins sold in the United States and elsewhere.
In Dallas, the Department of Justice charged the company with conspiring to fix, raise, and maintain prices, and allocate the sales volumes of vitamins sold by them and other unnamed co-conspirator companies in the U.S. and elsewhere.
Federal officials also allege that the company allocated contracts for vitamin premixes for customers throughout the U.S. and rigged the bids for those contracts.
The conspiracy lasted from January 1990 into February 1999 and affected the vitamins most commonly used as nutritional supplements or to enrich human food and animal feed -- vitamins A, B 2, B5, C, E, and Beta Carotene.
Vitamin premixes, which are used to enrich breakfast cereals and numerous other processed foods were also affected by the conspiracy, the Department said.
2) Daiwa Bank Ltd. Type of Crime: Fraud
Criminal Fine: $340 million
10 Corporate Crime Reporter 9(3), March 4, 1996
Daiwa Bank Ltd. pled guilty to 16 federal felonies and paid a $340 million criminal fine -- at the time, the largest criminal fine ever imposed in the United States.
Federal officials charged that the bank and bank officials sought to cover-up massive securities trading losses on two separate occasions and deceive and defraud bank regulators.
Daiwa pled guilty to two counts of conspiracy to defraud the United States and the Federal Reserve Bank, one count of misprison of a felony, ten counts of falsifying bank books and records, two counts of wire fraud, and one count of obstructing a bank examination.
Mary Jo White, the U.S. Attorney in Manhattan, told reporters that her office made many efforts to obtain the bank's cooperation in the criminal investigation, "but no meaningful cooperation was ever given."
"These corporate crimes represent companies at their highest levels acting at their worst," White said. "What we aim for in law enforcement in the corporate context is good corporate citizenship, cooperation and openness with authorities, and genuine efforts to improve a corporate culture that has led to the problems and crimes under investigation. Unfortunately, until today's guilty pleas, we had the opposite from Daiwa."
3) BASF Aktiengesellschaft
Type of Crime: Antitrust
Criminal Fine: $225 million
12 Corporate Crime Reporter 21(1), May 24, 1999
A German company, BASF Aktiengesellschaft, pled guilty and agreed to pay a $225 million criminal fine for leading a worldwide conspiracy to raise and fix prices and allocate market shares for certain vitamins sold in the United States and elsewhere.
In Dallas, the Department of Justice charged the company with conspiring to fix, raise, and maintain prices, and allocate the sales volumes of vitamins sold by them and other unnamed co-conspirator companies in the U.S. and elsewhere.
Federal officials also allege that the company allocated contracts for vitamin premixes for customers throughout the U.S. and rigged the bids for those contracts.
The conspiracy lasted from January 1990 into February 1999 and affected the vitamins most commonly used as nutritional supplements or to enrich human food and animal feed -- vitamins A, B 2, B5, C, E, and Beta Carotene.
Vitamin premixes, which are used to enrich breakfast cereals and numerous other processed foods were also affected by the conspiracy, the Department said.
4) SGL Carbon Aktiengesellschaft (SGL AG)
Type of Crime: Antitrust
Criminal Fine: $135 million
12 Corporate Crime Reporter 19(4), May 10, 1999
SGL Carbon Aktiengesellschaft (SGL AG), the world's largest producer of graphite and carbon products, pled guilty to antitrust crimes and agreed to pay a record $135 million fine for participating in an international conspiracy to fix prices and allocate the volume of graphite electrodes in the U.S. and elsewhere.
Graphite electrodes are large columns used in electric arc furnaces in steel-making "mini-mills."
5) Exxon Corporation and Exxon Shipping
Type of Crime: Environmental
Criminal Fine: $125 million
5 Corporate Crime Reporter 11(3), March 18, 1991
Exxon Corporation and Exxon Shipping pled guilty to federal criminal charges in connection with the March 24, 1989 Exxon Valdez oil spill.
The company was assessed a $125 million criminal fine.
Attorney General Dick Thornburgh called the fine "the largest single environmental criminal recovery ever enacted."
The companies pled guilty to misdemeanor violations of federal environmental laws.
Approximately 11 million gallons of crude oil spilled from the Valdez, fouling 700 miles of Alaska shoreline, killing birds and fish, and destroying the way of life of thousands of Native Americans.
6) UCAR International, Inc.
Type of Crime: Antitrust
Criminal Fine: $110 million
12 Corporate Crime Reporter 15(6), April 13, 1998
AR International, Inc. (UCAR), the largest producer of graphite electrodes in the United States, was charged with participating in an international cartel to fix the price and allocate the volume of graphite electrodes sold in the United States and elsewhere.
The company pled guilty and agreed to pay a $110 million criminal fine.
UCAR is charged with violating the Sherman Act by conspiring with unnamed co-conspirators to suppress and eliminate competition.
According to the charges, UCAR and the other companies began to fix prices and allocate their market shares for graphite electrodes in the United States and elsewhere at least as early as July 1992, and continued until at least June 1997.
As a result, steel makers paid noncompetitive and higher prices for graphite electrodes used in manufacturing products that are integral to a variety of business and consumer items.
Graphite electrodes are large columns used in electric arc furnaces in steel-making "mini-mills" to generate the intense heat necessary to melt and further refine steel. Nine electrodes, joined in columns of three, are used in the typical electric arc furnace to melt scrap steel.
7) Archer Daniels Midland
Type of Crime: Antitrust
Criminal Fine: $100 million
10 Corporate Crime Reporter 40(1), October 21, 1996
Archer Daniels Midland (ADM) pled guilty and paid a $100 million criminal fine -- at the time, the largest criminal antitrust fine ever -- for its role in conspiracies to fix prices to eliminate competition and allocate sales in the lysine and citric acid markets worldwide.
Federal officials said that as a result of ADM's crime, seed companies, large poultry and swine producers and ultimately farmers paid millions more to buy the lysine additive.
In addition, manufacturers of soft drinks, processed foods, detergents, and others, paid millions more to buy the citric acid additive, which ultimately caused consumers to pay more for those products.
Lysine is an amino acid used by farmers as a feed additive to ensure the proper growth of livestock. It is a $600 million a year industry worldwide.
Citric acid is a flavor additive and preservative produced from various sugars. It is found in soft drinks, processed food, detergents, pharmaceutical and cosmetic products. Citric acid is a $1.2 billion a year industry worldwide.
8)(tie) Banker's Trust
Type of Crime: Financial
Criminal Fine: $60 million
12 Corporate Crime Reporter 11(1), March 15, 1999
Bankers Trust was fined $60 million for its role in a scheme by high-ranking bank officials to enhance the bank's financial performance by falsely recording approximately $19.1 million in unclaimed customer funds as the bank's income and reserves.
Bankers Trust pled guilty to three counts of making false entries in bank books and records.
In addition to the $19.1 million fine, Bankers Trust was forced to return $17.85 million of the approximately $19.1 million unlawfully recorded as the bank's income and reserves to their rightful owners.
Bankers Trust's plan to return the remaining balance of the $19.1 million will be supervised by the Federal Reserve Bank of New York. Three Bankers Trust executives were indicted in the case.
"Bankers Trust's guilty plea should send a strong signal to all companies that negative consequences will flow from putting pressure on their executives and employees to generate revenues and meet expense targets with any means necessary," said U.S. Attorney Mary Jo White. "While a corporation, especially a financial institution -- naturally expresses concern and interest in the bottom line, it must at the same time ensure that it fosters a corporate culture requiring strict compliance with all applicable legal and ethical obligations."
8)(tie) Sears Bankruptcy Recovery Management Services
Type of Crime: Fraud
Criminal Fine: $60 million
13 Corporate Crime Reporter 7(1), February 15, 1999
A unit of Sears, Roebuck and Company pled guilty to bankruptcy fraud and agreed to pay a $60 million fine.
Sears Bankruptcy Recovery Management Services pled guilty to one count of bankruptcy fraud involving fraudulent reaffirmation practices that began in 1985 and continued until early 1997.
Sears has already paid over $180 million in restitution to about 188,000 debtors and $40 million in civil fines to 50 state attorneys general.
The $60 million criminal fine is the largest fine ever to be paid in a bankruptcy fraud case. The fine also is believed to be the largest criminal fine ever in Massachusetts, and one of the largest nationwide.
"Sears intentionally misled bankrupt debtors without attorneys and defrauded the Bankruptcy Court for over a decade," said U.S. Attorney Donald Stern said. "This was not the haphazard action of a few employees. It represented an outrageous company policy, carried out by those responsible for debt collection, which plainly violated federal law."
The fraudulent scheme involved Sears' practices relating to bankruptcy reaffirmation agreements. Such reaffirmation agreements, when executed in compliance with the Bankruptcy Code, have the effect of maintaining legally binding debts which would otherwise be discharged in bankruptcy. The discharge of debts is the principal benefit to a debtor filing for bankruptcy. The discharge prohibits all creditors from taking any collection action against the debtor for prebankruptcy debts that are not reaffirmed.
According to the criminal charges filed by the U.S. Attorney, beginning in 1985 and continuing until April, 1997, Sears and its subsidiary unit engaged in a scheme to induce bankruptcy debtors to enter into reaffirmation agreements concerning their credit card debts with Sears and lead them to believe that the agreements would be filed with the Bankruptcy Court and were binding contractual obligations, when in fact the agreements were not going to be filed and the debtors had no obligation to pay the debt.
10) Haarman & Reimer Corp.
Type of Crime: Antitrust
Criminal fine: $50 million
11 Corporate Crime Reporter 5(4), February 3, 1997
Haarman & Reimer Corp., a New Jersey-based subsidiary of the Germany-based pharmaceutical and chemical giant Bayer AG, pled guilty and agreed to pay a $50 million criminal fine for participating in an international conspiracy to fix prices and allocate sales in the citric acid market worldwide.
"This $50 million criminal fine sends a clear message to corporations around the world," said Attorney General Janet Reno. "We will not tolerate international conspiracies that defraud American consumers, and those companies that engage in collusive conduct will be punished."
11) Louisiana-Pacific Corporation
Type of Crime: Environmental
Criminal Fine: $37 million
12 Corporate Crime Reporter 23(1), June 8, 1998
Louisiana-Pacific Corporation pled guilty to 18 felonies, was fined $37 million, and was placed on five years probation.
The plea agreement, cut with the U.S. Attorney in Colorado, capped a six-year investigation of the nation's largest producer of oriented stranded board (OSB), a lamented structural wood panel that is used as a plywood substitute in residential and commercial construction.
The criminal investigation began in July 1992, when Dave Horan, a former Louisiana-Pacific supervisor at its Montrose, Colorado facility, filed a lawsuit against the company alleging that he had been fired because he refused to tamper with the Montrose mill's pollution monitoring equipment.
The investigation expanded to include both environmental and consumer fraud violations.
In its plea agreement, the company admitted it committed numerous criminal acts, including conspiring to violate the Clean Air Act and False Statement Act, tampering with the Montrose mill's air pollution monitor on 12 occasions by inserting foil into the monitor, pulling a protective lens off the monitor, miscalibrating the monitor, and turning it off, lying to the Colorado Department of Health about the number of times the Montrose mill violated the limits of its pollution permits, creating and submitting to the American Plywood Association non-representative samples of OSB that the Association used in its on-going quality assurance testing from 1990 to 1994, and misrepresenting to its customers that its OSB conformed to the quality assurance testing requirements of the Association.
12) Hoechst AG
Type of Crime: Antitrust
Criminal Fine: $36 million
12 Corporate Crime Reporter 19(6), May 10, 1999
The German chemical and pharmaceutical giant Hoechst AG pled guilty and agreed to pay a $36 million criminal fine for participating in a 17-year international conspiracy to fix prices and allocate market shares on the sale of sorbates in the United States and elsewhere.
Federal officials charged Hoechst AG and Bernd Romahn, former Marketing Manager of Hoechst's Food Ingredients Business Unit, with conspiring with unnamed sorbates producers to suppress and eliminate competition in the sorbates industry from 1979 until 1996.
In addition to the $36 million fine against the corporation, Romahn has agreed to pled guilty and pay a $250,000 criminal fine for his role in the conspiracy. As part of the plea agreements, Hoechst and Romahn have agreed to cooperate in the ongoing government investigation.
13) Damon Clinical Laboratories, Inc.
Type of Crime: Fraud
Criminal Fine: $35.2 million
10 Corporate Crime Reporter 39(6), October 14, 1996
Damon Clinical Laboratories, Inc., a unit of Corning Inc., pled guilty to a one-count criminal information charging the company with conspiring to defraud the United States by submitting false claims to the Medicare program.
The Corning paid $119 million in fines and penalties -- $35.2 million as a criminal fine and $83.7 to resolve related civil liabilities.
Federal officials said that the $119 million payment represents a recovery of three dollars for every one dollar that the company stole from federal and state health care programs.
"Faced with declining profits and a changing health care marketplace, Damon decided to cheat the Medicare program," said U.S. Attorney Donald Stern. "It did so by submitting literally millions of fraudulent claims for payment to federal and state health care programs for medically unnecessary laboratory tests. What was marketed as a LabScan was actually a massive lab scam."
Federal officials charged that the company bundled three different tests with certain blood panels, causing doctors to order tests that were not medically necessary for the treatment and diagnosis of Medicare beneficiaries.
After physicians had ordered the medically unnecessary tests, Damon then billed Medicare for the bundled tests, knowing that the tests were in fact not necessary.
14) C.R. Bard Inc.
Type of Crime: Food and drug
Criminal Fine: $30.9 million
7 Corporate Crime Reporter 41(1), October 25, 1993
C.R. Bard Inc., a heart catheter manufacturer, pled guilty to a 391 count criminal charge for marketing an unapproved medical device that caused at least 10 patients to undergo emergency heart surgery and at least one death.
The company paid $60.1 million in fines and penalties, including a $30.9 million criminal fine.
A heart catheter is a wire with a balloon like tip which is temporarily threaded into a person's coronary arteries by a doctor and then inflated in order to flatten material which is clogging the artery. The device widens the path through which blood can flow to the heart muscle.
The company pled guilty to conducting illegal experiments on people with the unapproved catheters, including illegal testing of catheters on people for the purpose of determining whether the catheters were safe and effective.
About 22,000 people had used the catheters before they were recalled in 1990.
15) Genentech Inc.
Type of Crime: Food and drug
Criminal Fine: $30 million
12 Corporate Crime Reporter 16(3), April 19, 1999
Genentech Inc., the San Francisco-based biotech and pharmaceutical company, pled guilty to marketing to doctors one of its most lucrative prescription drugs, Protropin, for uses which had not been approved by the Food and Drug Administration (FDA).
Genentech paid a $30 million criminal fine and $20 million in civil penalties.
Genentech will admit that from 1985 to 1994, it aggressively marketed Protropin, a synthetic human growth hormone, to doctors, hospitals, and others for use in the treatment of various medical conditions for which Protropin had not received FDA approval.
It is illegal under federal law for a drug company to market a drug for purposes which the FDA has not approved based on research and clinical trials.
16) Nippon Gohsei
Type of Crime: Antitrust
Criminal Fine: $21 million
12 Corporate Crime Reporter 29(3), July 19, 1999
Nippon Gohsei, a large Japanese chemical producer, pled guilty and agreed to pay a $21 million criminal fine for participating in a 17-year international conspiracy to suppress and eliminate competition in the foods preservatives industry.
In San Francisco, the Justice Department charged Nippon Gohsei Fine Chemicals Business Department with conspiring to fix, raise, and maintain prices, and allocate market shares on sorbates sold by them and unnamed co-conspirators from 1979 to 1996.
Sorbates are chemical preservatives used primarily in high-moisture and high-sugar foods such as cheese and other dairy products, baked goods, and other processed foods.
Roughly $200 million worth of sorbates, including potassium sorbate and sorbic acid, are sold annually worldwide.
17)(tie) Pfizer Inc.
Type of Crime: Antitrust
Criminal Fine: $20 million
12 Corporate Crime Reporter 30(1), July 26, 1999
Pfizer Inc. will pled guilty and agreed to pay criminal fines totaling $20 million for participating in two international price fixing conspiracies in the food additives industry.
Pfizer -- the fourth largest pharmaceutical company in the United States -- was charged with participating in a conspiracy to raise and fix prices and allocate market shares in the U.S. for a food preservative called sodium erythorbate, and to allocate customers and territories for a flavoring agent called maltol.
Federal officials charged Pfizer with conspiring with an unnamed sodium erythorbate producer to fix prices and allocate market shares on sodium erythorbate sales in the United States from 1992 to 1994.
Federal officials also charged the corporation with conspiring with an unnamed maltol producer to allocate customers and territories for sales of maltol in the United States and elsewhere from 1989 until 1995.
Sodium erythorbate is a chemical food preservative used to protect the color and flavor of meat, vegetables, and processed foods.
Maltol is a chemical food flavoring agent used primarily in fruit and caramel-flavored candies and beverages.
The two conspiracies affected more than $65 million in United States commerce.
17)(tie) Summitville Consolidated Mining Co. Inc.
Type of Crime: Environmental
Criminal Fine: $20 million
10 Corporate Crime Reporter 20(3) May 20, 1996
The Summitville Consolidated Mining Co. Inc. pled guilty to 40 counts of violating the Clean Water Act and other federal statutes at its Summitville Gold Mine operation in southwestern Colorado from 1984 to 1992. The company was fined $20 million.
The company pled guilty to one count of conspiracy, four counts of making false statements, five counts of failing to report under the Clean Water Act, and 30 counts of knowingly violating the Clean Water Act by making unauthorized discharges to waters of the United States.
As part of the plea agreement Summitville agreed to pay the maximum criminal fine of $500,000 on each count, for a total fine of $20 million.
Summitville, which opened in 1986, introduced a technology called "cyanide leaching" to extract gold from ore. This process, invented in Scotland and first used in South Africa, involves spraying cyanide solution on the ore to extract gold.
The cyanide waste that was left over was supposed to be stored in lined and covered ponds to prevent contact with local animals which can die if they drink the water. However, the cyanide solution did not stay in the ponds but leaked through the lining into nearby creeks. By 1990, a 16-mile stretch of the Alamosa river was biologically dead.
19)(tie) Lucas Western Inc.
Type of Crime: False Statements
Criminal Fine: $18.5 million
9 Corporate Crime Reporter 4(6), January 30, 1995
Lucas Western Industries, Inc., a subsidiary of Lucas Industries plc, the British defense contractor, pled guilty to 37 counts of submitting false statements to the U.S. Department of Defense and paid a criminal fine of $18.5 million.
Lucas falsely certified to the Defense Department that gearboxes it manufactured had been fully inspected. In fact, many required inspections had not been performed.
The charges focused on faulty gearboxes for two military programs -- the airframe mounted accessory drive for the Navy's F/A-18 aircraft and the aximuth drive unit gearbox for the Army's Multiple Launch Rocket System.
19)(tie) Rockwell International Corporation
Type of Crime: Environmental
Criminal Fine: $18.5 million
6 Corporate Crime Reporter 13(4), March 30, 1992
Rockwell International Corporation pled guilty to ten counts of environmental crimes at the Rocky Flats Nuclear Weapons Plant near Boulder, Colorado.
Rockwell pled guilty to four felony violations of the Resource Conservation and Recovery Act and to one felony and five misdemeanors of the Clean Water Act.
Federal officials charged that Rockwell illegally stored and treated hazardous wastes generated during the production of plutonium "triggers" and other components of nuclear weapons at Rocky Flats.
Federal officials also charged that Rockwell improperly and illegally discharged wastes through its sewage treatment plant, creating the potential for contamination by runoff to a reservoir used for drinking water.
21) Royal Caribbean Cruises Ltd.
Type of Crime: Environmental
Criminal Fine: $18 million
12 Corporate Crime Reporter 30(4), July 26, 1999
Royal Caribbean Cruises Ltd., one of the world's largest passenger cruise lines, pled guilty to 21 felony counts and agreed to pay a record $18 million criminal fine for dumping waste oil and hazardous chemicals and lying to the U.S. Coast Guard.
In a plea agreement, filed in federal courts in six cities, Royal Caribbean admitted that it routinely dumped waste oil from its fleet of cruise ships.
The company also pled guilty to the unprecedented charge that it deliberately dumped into U.S. harbors and coastal areas many other types of pollutants, including hazardous chemicals from photo processing equipment, dry cleaning shops and printing presses.
The $18 million fine is the largest ever to be paid by a cruise line in connection with polluting U.S. waters.
The plea agreements were filed in Miami, New York City, Los Angeles, Anchorage, St. Thomas, U.S. Virgin Islands, and, San Juan, Puerto Rico.
"Royal Caribbean used our nation's waters as its dumping ground, even as it promoted itself as an environmentally 'green' company," said Attorney General Janet Reno. "This case will sound like a foghorn throughout the entire maritime industry."
Under the terms of the plea agreement, the cruise ship operator will also pled guilty to deliberately storing waste from its ships at a Port of Miami pier without a permit, violating federal hazardous waste law.
Some hazardous materials, including toxic solvents from dry cleaning operations, were illegally placed in the garbage aboard the ships. The material was then either incinerated on the ship or dumped in U.S. or foreign ports mixed with ordinary garbage.
22) Teledyne Industries Inc.
Type of Crime: Fraud
Criminal Fine: $17.5 million
6 Corporate Crime Reporter 39(9), October 12, 1992
Teledyne Industries Inc. pled guilty to 35 counts of preparing and submitting false statements regarding the testing of electronic relays at its Teledyne Relays Division in Hawthorne, California.
Teledyne paid a $17.5 million criminal fine.
Federal officials alleged that the company sold commercial grade relay switches to the federal government while certifying that they had successfully met rigorous military testing requirements. The government pays a premium of nearly four times as much for the tested, military version of the switches as it would for the untested, commercial quality relay switch.
23) Northrop
Type of Crime: False statements
Criminal Fine: $17 million
4 Corporate Crime Reporter 9(1), March 5, 1990
Northrop pled guilty to 34 counts of providing false statements to the federal government over a three year period in connection with two military programs -- the Air Launched Cruise Missile and the Navy Harrier Jet.
24) Litton Applied Technology Division (ATD) and Litton Systems Canada (LSL)
Type of Crime: Fraud
Criminal Fine: $16.5 million
12 Corporate Crime Reporter 27(1), July 5, 1999
Two Litton Industries, Inc. units pled guilty to felony charges and agreed to pay $18.5 million in connection with the concealment of commissions paid to consultants who secured military sales to Taiwan and Greece.
Litton Applied Technology Division (ATD) and Litton Systems Canada (LSL) each pled guilty to one conspiracy count. LSL also pled guilty to additional charges of mail fraud and false statements.
The two Litton units agreed to pay $18.5 million -- which includes $16.5 million in criminal fines and $2 million in restitution.
The federal case against the Litton units involves a long-running conspiracy to defraud agencies of the United States and Taiwan in connection with Litton's military sales to governments of Taiwan and Greece.
25) Iroquois Pipeline Operating Company
Type of Crime: Environmental
Criminal Fine: $15 million
10 Corporate Crime Reporter 22(1), June 3, 1996
The Connecticut-based Iroquois Pipeline Operating Company and four of its high-level officers and supervisors pled guilty to numerous criminal violations of the Clean Water Act including failure to clean up or restore damage to nearly 200 streams and wetlands as a result of rushing to meet construction deadlines.
The company agreed to pay $22 million in criminal and civil fines -- including a $15 million criminal fine -- for violating federal environmental and safety laws.
The violations stem from the construction of one of the country's longest natural gas pipelines running 370 miles from Canada through upstate New York and Connecticut to Long Island.
26) Eastman Chemical Company
Type of Crime: Antitrust
Criminal Fine: $11 million
12 Corporate Crime Reporter 38(5), October 5, 1998
Eastman Chemical Company pled guilty and agreed to pay an $11 million criminal fine for participating in an international price-fixing conspiracy in the food preservatives industry.
Roughly $200 million worth of sorbates, which include potassium sorbate and sorbic acid, is sold worldwide every year.
Sorbates are chemical preservatives used primarily as mold inhibitors in high-moisture and high-sugar foods such as cheese and other dairy products, baked goods, and other processed foods.
Eastman is headquartered in Kingsport, Tennessee.
Federal officials alleged that Eastman, through one or more of its employees, conspired with other unnamed sorbate producers to suppress and eliminate competition in the sorbates market.
The Department of Justice alleged that Eastman officials agreed with their co-conspirators on prices to be charged for sorbates sold in the United States.
The single-count felony charges the company with participating in conversations to discuss the price of sorbates sold in the United States, agreeing, during those conversations, to charge prices at certain levels and otherwise increase and maintain prices of sorbates sold in the United States, and issuing price announcements and price quotations in accordance with the agreements reached.
27) Copley Pharmaceutical, Inc.
Type of Crime: Food and drug
Criminal Fine: $10.65 million
11 Corporate Crime Reporter 22(1), June 2, 1997
Copley Pharmaceutical, Inc., a Massachusetts-based generic drug maker, pled guilty to one count of conspiracy to defraud the Food and Drug Administration (FDA) and agreed to pay a fine of $10.65 million.
Federal officials said the investigation began after two brothers -- Michael and Mark Riley -- who worked for the company, "blew the whistle on their superiors and the company."
A criminal information filed by the U.S. Attorney's office in Boston charged the company with:
* changing manufacturing methods from those approved by the FDA for drugs, including prescription and over-the-counter drugs;
* falsifying manufacturing batch records to cover-up the manufacturing deviations;
* submitting false annual reports to the FDA for FDA-approved drugs which did not disclose the manufacturing changes; and
* failing to seek prior FDA approval for certain manufacturing changes.
28) Lonza AG
Type of Crime: Antitrust
Criminal Fine: $10.5 million
12 Corporate Crime Reporter 10(1), March 8, 1999
A Swiss vitamin manufacturer and five United States executives pled guilty and agreed to cooperate in the government's ongoing investigation of illegal collusive practices in the international vitamin industry.
Federal officials charged the company, Lonza AG, with participating in a conspiracy to fix prices and allocate the volume of sales of vitamin B3 (niacin and niacinamide). The company agreed to pay a fine of $10.5 million for its role in the conspiracy.
The five executives were charged with participating in a conspiracy to fix prices and allocate customers and the sales of vitamin B4 (choline chloride). Vitamins B3 and B4 are used to enrich both animal and human nutritional products and are marketed worldwide.
In the Lonza case, federal officials alleged that company executives agreed with the other major vitamin B3 firms to suppress and eliminate competition in the Vitamin B3 market.
29) Kimberly Home Health Care Inc.
Type of Crime: Fraud
Criminal Fine: $10.08 million
12 Corporate Crime Reporter 30(6), July 26, 1999
Olsten Corporation and a subsidiary, Kimberly Home Health Care, Inc., agreed to pay $61 million to settle allegations that both companies defrauded the Medicare program. Olsten agreed to pay nearly $51 million as part of a civil settlement, and Kimberly will enter into criminal plea agreements in three districts and pay more than $10 million in criminal fines.
Kimberly will pled guilty to three separate felony charges, which were filed in Florida and Georgia.
Kimberly will pled guilty to conspiracy, mail fraud and violating the Medicare Anti-Kickback statute, and agreed to pay $10.08 million in criminal fines in connection with its scheme to defraud the Medicare program.
Kimberly's parent company, Olsten, entered into a civil settlement agreement with the United States and agreed to pay $50.92 million to resolve its civil liability stemming from the same Medicare fraud schemes and an additional scheme in Brooklyn, New York.
Olsten and its subsidiaries own and operate management and staffing services for home health agencies in several states, including Florida and Georgia.
Federal officials alleged kickbacks and false Medicare billings made in connection with Kimberly's receipt of fees from another company for Kimberly's management of certain home health agencies.
30)(tie) Ajinomoto Co. Inc.
Type of Crime: Antitrust
Criminal Fine: $10 million
10 Corporate Crime Reporter 40(1), October 21, 1996
Ajinomoto Co. Inc., pled guilty to suppressing and eliminating competition in the lysine market from June 1992 through June 27, 1995 in violation of the Sherman Antitrust Act.
Lysine is an amino acid used by farmers as a feed additive to ensure the proper growth of livestock. It is a $600 million a year industry worldwide.
30)(tie) Bank of Credit and Commerce International (BCCI)
Type of Crime: Financial
Criminal Fine: $10 million
4 Corporate Crime Reporter 3(1) January 22, 1990
Two BCCI units pled guilty to 29 counts of laundering illegal drug profits. At the time of the indictment, Justice Department officials called the BCCI prosecution "the most important money laundering case in U.S. history." Among the bank's customers was Manuel Noriega.
Under the plea agreement, the two BCCI units, Bank of Credit and Commerce International S.A. and Bank of Credit and Commerce International (Overseas) Ltd. would forfeit $14.8 million in alleged drug profits and be placed on probation for five years.
BCCI was assessed $550 million in restitution, fines and penalties, including a $10 million criminal fine.
30)(tie) Kyowa Hakko Kogyo Co. Ltd.
Type of Crime: Antitrust
Criminal Fine: $10 million
10 Corporate Crime Reporter 40(1), October 21, 1996
Kyowa Hakko Kogyo Co. Ltd. pled guilty to suppressing and eliminating competition in the lysine market from June 1992 through June 27, 1995 in violation of the Sherman Antitrust Act.
Lysine is an amino acid used by farmers as a feed additive to ensure the proper growth of livestock. It is a $600 million a year industry worldwide.
30)(tie) Warner-Lambert Company
Type of Crime: Food and drug
Criminal Fine: $10 million
9 Corporate Crime Reporter 46(1), December 4, 1995
Warner-Lambert Company, a Fortune 500 pharmaceutical manufacturer, pled guilty to one felony count and was sentenced to pay a $10 million criminal fine for fraudulently failing to notify the Food and Drug Administration (FDA) about persistent drug stability problems with certain prescription drugs.
Federal officials charged that the company violated federal law by fraudulently failing to report to the FDA drug stability failures concerning the prescription drug Dilantin, a widely used anti-epileptic medication.
34) General Electric
Type of Crime: Fraud
Criminal Fine: $9.5 million
6 Corporate Crime Reporter 30(7), July 27, 1992
General Electric Company pled guilty to charges of defrauding the federal government of $26.5 million in the sale of military equipment to Israel.
The company paid $69 million in fines, penalties and damages for committing the offenses. Of that, $9.5 million is a criminal fine.
The company pled guilty to diverting millions of dollars to a former Israeli Air Force General to assist GE in securing favorable treatment in connection with the F-16 program.
35)(tie) Royal Caribbean Cruises Ltd.
Type of Crime: Environmental
Criminal Fine: $9 million
12 Corporate Crime Reporter 23(3), June 8, 1998
Royal Caribbean Cruises Ltd., one of the world's largest passenger cruise lines, pled guilty to a fleet-wide conspiracy of dumping oil into the ocean and lying to the U.S. Coast Guard to cover up the crimes. The company was fined $9 million.
The plea agreement, which was filed in federal courts in Miami, Florida, and San Juan, Puerto Rico, was reached on the eve of trials scheduled in Miami and Puerto Rico on June 2nd and 8th, 1998.
Royal Caribbean president Jack Williams issued a strong statement accepting responsibility and apologizing for the company's crimes.
Federal officials said that the conspiracy included using false oil record books. These logs were kept to record all overboard discharges. Some Royal Caribbean engineers had referred to the oil record books, which were presented to the Coast Guard during inspections in U.S. ports, as the "Eventyrbok," which means "Fairytale book" in Norwegian.
The company also pled guilty to two counts of obstruction of justice -- witness tampering (ordering an engineer to lie to a federal grand jury) and destroying evidence of a bypass pipe used to make illegal discharges from the cruise ship "Sovereign of the Seas."
35)(tie) Showa Denko Carbon
Type of Crime: Antitrust
Criminal Fine: $9 million
12 Corporate Crime Reporter 19(4), May 10, 1999
Showa Denko Carbon, Inc. (SDC), a U.S. subsidiary of the Japanese firm Showa Financing KK, pled guilty to a charge of participating in an international cartel to fix the price and allocate the volume of graphite electrodes sold in the United States and elsewhere and was fined $9 million.
Graphite electrodes are large columns used in electric arc furnaces in steel-making "mini-mills."
SDC is charged with violating the Sherman Antitrust Act by conspiring with unnamed co-conspirators to suppress and eliminate competition. According to the charges, SDC fixed prices and allocated market share for graphite electrodes in the United States and elsewhere from 1993 until January 1997.
37) IBM East Europe/Asia Ltd.
Type of Crime: Illegal exports
Criminal Fine: $8.5 million
12 Corporate Crime Reporter 32(1), August 10, 1998
A unit of IBM Corp. pled guilty in Washington, D.C. to a 17-count criminal information charging violations that the company unlawfully exported computers to a Russian nuclear lab.
The company, IBM East Europe/Asia Ltd., was sentenced to pay $8.5 million, the maximum fine authorized by law.
IBM East Europe/Asia Ltd., the Russian subsidiary of IBM, admitted that it sold and exported computers to Arzamas-16, the Russian nuclear lab, "having reason to believe that the computers would be used directly or indirectly in research on or development, design, manufacture, construction, testing or maintenance of nuclear explosive devices" in violation of federal export control laws.
38) Empire Sanitary Landfill Inc.
Type of crime: Campaign finance
Criminal fine: $8 million
11 Corporate Crime Reporter 39(3), October 13, 1997
Empire Sanitary Landfill Inc. pled guilty to making illegal campaign contributions and was fined $8 million, the largest criminal fine ever imposed in a federal election campaign finance fraud prosecution.
In Harrisburg, Pennsylvania, federal officials charged Empire with making $129,000 in illegal corporate contributions.
The money went to both the Dole and Clinton 1996 president campaigns and numerous Congressional campaigns, but the Dole campaign received the largest chunk of the money -- $80,000 in illegal contributions in April and May 1995.
39)(tie) Colonial Pipeline Company
Type of Crime: Environmental
Criminal Fine: $7 million
13 Corporate Crime Reporter 9(3), March 1, 1999
Colonial Pipeline Company, the operator of the largest hazardous liquid pipeline in the world, pled guilty to criminal charges in connection with a spill of almost one million gallons of oil into the Reedy River in South Carolina.
The company was fined $7 million and put on five years probation.
Colonial is owned by several of the world's largest oil companies. Shareholders include Mobil, Texaco and Amoco.
The company pled guilty to a misdemeanor charge of violating the Clean Water Act when it failed to exercise reasonable care leading to the rupture of its pipeline where it crosses the Reedy River near Simpsonville, South Carolina.
Colonial Pipeline acknowledged that its actions led to the spill of about 960,000 gallons of diesel fuel affecting a 23-mile segment of the river. The spill killed about 35,000 fish and also affected wildlife such as beaver, muskrat, and turtles, which died as a result of direct contact with the spilled oil.
39)(tie) Eklof Marine Corporation
Type of Crime: Environmental
Criminal Fine: $7 million
11 Corporate Crime Reporter 37(4), September 29, 1997
A tugboat company, Eklof Marine Corporation, its president, the tugboat's captain and two affiliated companies pled guilty to environmental crimes in connection with a 826,000 gallon oil spill off Rhode Island in 1996.
The spill caused substantial environmental damage, killing marine and bird life on Rhode Island's south coast.
The North Cape barge, carrying four million gallons of home heating oil, ran aground after a fire broke out in the engine room of the Scandia tugboat, which was towing the North Cape to Providence.
The crew had to abandon the tug, leaving it and the barge adrift in a severe winter storm.
Eklof Marine Corporation, two affiliate companies, Eklof's president and the tugboat's captain admitted that their combined negligence caused the spill.
The companies agreed to pay $8.5 million in fines and conservation payments and will undertake a $1 million remedial safety program on any vessels navigating Rhode Island waters.
41)(tie) Chevron
Type of Crime: Environmental
Criminal Fine: $6.5 million
6 Corporate Cr
Every year, the major business magazines put out their annual surveys of big business in America.
You have the Fortune 500, the Forbes 400, the Forbes Platinum 100, the International 800 -- among others.
These lists rank big corporations by sales, assets, profits and market share. The point of these surveys is simple -- to identify and glorify the biggest and most profitable corporations.
The point of the list contained in this report, The Top 100 Corporate Criminals of the Decade -- is to focus public attention on a wave of corporate criminality that has swamped prosecutors offices around the country.
This is the dark underside of the marketplace that is given little sustained attention and analysis by politicians and news outlets.
To compile The Top 100 Corporate Criminals of the 1990s, we used the most narrow and conservative of definitions -- corporations that have pled guilty or no contest to crimes and have been criminally fined.
The 100 corporate criminals fell into 14 categories of crime: Environmental (38), antitrust (20), fraud (13), campaign finance (7), food and drug (6), financial crimes (4), false statements (3), illegal exports (3), illegal boycott (1), worker death (1), bribery (1), obstruction of justice (1) public corruption (1), and tax evasion (1).
We did not try to assess and compare the damage committed by these corporate criminals or by other corporate wrongdoers.
There are millions of Americans who care about morality in the marketplace.
But few Americans realize that when they buy Exxon stock, or when they fill up at an Exxon gas station, they are in fact supporting a criminal recidivist corporation.
And few Americans realize that when the take a ride on a cruise ship owned by Royal Caribbean Cruise Lines, they are riding on a ship owned by a criminal recidivist corporation.
Six corporations that made the list of the Top 100 Corporate Criminals were criminal recidivist companies during the 1990s.
In addition to Exxon and Royal Caribbean, Rockwell International, Warner-Lambert, Teledyne, and United Technologies each pled guilty to more than one crime during the 1990s.
A few caveats about this report.
Caveat one: Big companies that are criminally prosecuted represent only the tip of a very large iceberg of corporate wrongdoing.
For every company convicted of health care fraud, there are hundreds of others who get away with ripping off Medicare and Medicaid, or face only mild slap-on-the-wrist fines and civil penalties when caught.
For every company convicted of polluting the nation's waterways, there are many others who are not prosecuted because their corporate defense lawyers are able to offer up a low-level employee to go to jail in exchange for a promise from prosecutors not to touch the company or high-level executives.
For every corporation convicted of bribery or of giving money directly to a public official in violation of federal law, there are thousands who give money legally through political action committees to candidates and political parties. They profit from a system that effectively has legalized bribery.
For every corporation convicted of selling illegal pesticides, there are hundreds more who are not prosecuted because their lobbyists have worked their way in Washington to ensure that dangerous pesticides remain legal.
For every corporation convicted of reckless homicide in the death of a worker, there are hundreds of others that don't even get investigated for reckless homicide when a worker is killed on the job. Only a few district attorneys across the country (Michael McCann, the DA in Milwaukee County, Wisconsin, being one) regularly investigate workplace deaths as homicides.
Caveat two: Corporations define the laws under which they live.
For example, the automobile industry over the past 30 years has worked its will on Congress to block legislation that would impose criminal sanctions on knowing and willful violations of the federal auto safety laws. Now, if an auto company is caught violating the law, and if the cops are not asleep at the wheel, only a civil fine is imposed.
Caveat three: Because of their immense political power, big corporations have the resources to defend themselves in courts of law and in the court of public opinion.
Few prosecutors are willing to subject themselves to the constant legal and public relations barrage that a corporation's well connected and high-priced legal talent can inflict.
It is a testament to the tenacity of a few dedicated federal prosecutors that Royal Caribbean Cruise Lines, for example, was criminally convicted of polluting the oceans.
In the criminal prosecution of Royal Caribbean Cruise Lines the company was facing a team of two federal criminal prosecutors.
To defend itself, Royal Caribbean hired Judson Starr and Jerry Block, both of whom have served as head of the Justice Department's Environmental Crimes Section, and former Attorney General Benjamin Civiletti.
Also representing Royal Caribbean were former federal prosecutors Kenneth C. Bass III, and Norman Moscowitz. Donald Carr of Winthrop & Stimson also joined the defense team.
Hired on as experts on international law issues were former Attorney General Eliot Richardson, University of Virginia law professor John Norton Moore, former State Department officials Terry Leitzell and Bernard Oxman, and four retired senior admirals.
As the case proceeded to trial, Royal Caribbean engaged in a massive public relations campaign, taking out ads during the Super Bowl, putting former Environmental Protection Agency (EPA) Administrators on its board of directors, and donating thousands of dollars to environmental groups.
Federal prosecutors overcame this legal and public relations barrage and convicted the company. But that was an unusual prosecution and unusually determined prosecutors.
While the 1990s was a decade of booming markets and booming profits, it was also a decade of rampant corporate criminality.
There is an emerging consensus among corporate criminologists.
And that emerging consensus is this: corporate crime and violence inflicts far more damage on society than all street crime combined.
The FBI estimates, for example, that burglary and robbery -- street crimes -- costs the nation $3.8 billion a year.
Compare this to the hundreds of billions of dollars stolen from Americans as a result of corporate and white-collar fraud.
Health care fraud alone costs Americans $100 billion to $400 billion a year.
The savings and loan fraud -- which former Attorney General Dick Thornburgh called "the biggest white collar swindle in history" -- cost us anywhere from $300 billion to $500 billion.
And then you have your lesser frauds: auto repair fraud, $40 billion a year, securities fraud, $15 billion a year -- and on down the list.
Recite this list of corporate frauds and people will immediately say to you: but you can't compare street crime and corporate crime -- corporate crime is not violent crime.
Unfortunately, corporate crime is often violent crime.
The FBI estimates that, 19,000 Americans are murdered every year.
Compare this to the 56,000 Americans who die every year on the job or from occupational diseases such as black lung and asbestosis and the tens of thousands of other Americans who fall victim to the silent violence of pollution, contaminated foods, hazardous consumer products, and hospital malpractice.
These deaths are often the result of criminal recklessness. They are sometimes prosecuted as homicides or as criminal violations of federal laws.
And environmental crimes often result in death, disease and injury.
In 1998, for example, a Tampa, Florida company and the company's plant manager were found guilty of violating a federal hazardous waste law. Those illegal acts resulted in the deaths of two nine-year-old boys who were playing in a dumpster at the company's facility.
This report is only a tiny step in an effort to fill a great void in corporate crime research.
The Justice Department has the information and should get the budget to begin putting out yearly reports on corporate crime.
Every year, the Justice Department puts out an annual report titled "Crime in the United States."
But by "Crime in the United States," the Justice Department means "street crime in the United States."
So, in "Crime in the United States" document you will read about burglary, robbery and theft. There is nothing in it about price-fixing, corporate fraud, pollution, or public corruption.
A yearly Justice Department report on Corporate Crime in the United States is long overdue.
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THE TOP 100 CORPORATE CRIMINALS OF THE 1990's
1) F. Hoffmann-La Roche Ltd.
Type of Crime: Antitrust
Criminal Fine: $500 million
12 Corporate Crime Reporter 21(1), May 24, 1999
2) Daiwa Bank Ltd.
Type of Crime: Financial
Criminal Fine: $340 million
10 Corporate Crime Reporter 9(3), March 4, 1996
3) BASF Aktiengesellschaft
Type of Crime: Antitrust
Criminal Fine: $225 million
12 Corporate Crime Reporter 21(1), May 24, 1999
4) SGL Carbon Aktiengesellschaft (SGL AG)
Type of Crime: Antitrust
Criminal Fine: $135 million
12 Corporate Crime Reporter 19(4), May 10, 1999
5) Exxon Corporation and Exxon Shipping
Type of Crime: Environmental
Criminal Fine: $125 million
5 Corporate Crime Reporter 11(3), March 18, 1991
6) UCAR International, Inc.
Type of Crime: Antitrust
Criminal Fine: $110 million
12 Corporate Crime Reporter 15(6), April 13, 1998
7) Archer Daniels Midland
Type of Crime: Antitrust
Criminal Fine: $100 million
10 Corporate Crime Reporter 40(1), October 21, 1996
8)(tie) Banker's Trust
Type of Crime: Financial
Criminal Fine: $60 million
12 Corporate Crime Reporter 11(1), March 15, 1999
8)(tie) Sears Bankruptcy Recovery Management Services
Type of Crime: Fraud
Criminal Fine: $60 million
13 Corporate Crime Reporter 7(1), February 15, 1999
10) Haarman & Reimer Corp.
Type of Crime: Antitrust
Criminal fine: $50 million
11 Corporate Crime Reporter 5(4), February 3, 1997
11) Louisiana-Pacific Corporation
Type of Crime: Environmental
Criminal Fine: $37 million
12 Corporate Crime Reporter 23(1), June 8, 1998
12) Hoechst AG
Type of Crime: Antitrust
Criminal Fine: $36 million
12 Corporate Crime Reporter 19(6), May 10, 1999
13) Damon Clinical Laboratories, Inc.
Type of Crime: Fraud
Criminal Fine: $35.2 million
10 Corporate Crime Reporter 39(6), October 14, 1996
14) C.R. Bard Inc.
Type of Crime: Food and drug
Criminal Fine: $30.9 million
7 Corporate Crime Reporter 41(1), October 25, 1993
15) Genentech Inc.
Type of Crime: Food and drug
Criminal Fine: $30 million
12 Corporate Crime Reporter 16(3), April 19, 1999
16) Nippon Gohsei
Type of Crime: Antitrust
Criminal Fine: $21 million
12 Corporate Crime Reporter 29(3), July 19, 1999
17)(tie) Pfizer Inc.
Type of Crime: Antitrust
Criminal Fine: $20 million
12 Corporate Crime Reporter 30(1), July 26, 1999
17)(tie) Summitville Consolidated Mining Co. Inc.
Type of Crime: Environmental
Criminal Fine: $20 million
10 Corporate Crime Reporter 20(3) May 20, 1996
19)(tie) Lucas Western Inc.
Type of Crime: False Statements
Criminal Fine: $18.5 million
9 Corporate Crime Reporter 4(6), January 30, 1995
19)(tie) Rockwell International Corporation
Type of Crime: Environmental
Criminal Fine: $18.5 million
6 Corporate Crime Reporter 13(4), March 30, 1992
21) Royal Caribbean Cruises Ltd.
Type of Crime: Environmental
Criminal Fine: $18 million
12 Corporate Crime Reporter 30(4), July 26, 1999
22) Teledyne Industries Inc.
Type of Crime: Fraud
Criminal Fine: $17.5 million
6 Corporate Crime Reporter 39(9), October 12, 1992
23) Northrop
Type of Crime: False statements
Criminal Fine: $17 million
4 Corporate Crime Reporter 9(1), March 5, 1990
24) Litton Applied Technology Division (ATD) and Litton Systems Canada (LSL)
Type of Crime: Fraud
Criminal Fine: $16.5 million
12 Corporate Crime Reporter 27(1), July 5, 1999
25) Iroquois Pipeline Operating Company
Type of Crime: Environmental
Criminal Fine: $15 million
10 Corporate Crime Reporter 22(1), June 3, 1996
26) Eastman Chemical Company
Type of Crime: Antitrust
Criminal Fine: $11 million
12 Corporate Crime Reporter 38(5), October 5, 1998
27) Copley Pharmaceutical, Inc.
Type of Crime: Food and drug
Criminal Fine: $10.65 million
11 Corporate Crime Reporter 22(1), June 2, 1997
28) Lonza AG
Type of Crime: Antitrust
Criminal Fine: $10.5 million
12 Corporate Crime Reporter 10(1), March 8, 1999
29) Kimberly Home Health Care Inc.
Type of Crime: Fraud
Criminal Fine: $10.08 million
12 Corporate Crime Reporter 30(6), July 26, 1999
30)(tie) Ajinomoto Co. Inc.
Type of Crime: Antitrust
Criminal Fine: $10 million
10 Corporate Crime Reporter 40(1), October 21, 1996
30)(tie) Bank of Credit and Commerce International (BCCI)
Type of Crime: Financial
Criminal Fine: $10 million
4 Corporate Crime Reporter 3(1) January 22, 1990
30)(tie) Kyowa Hakko Kogyo Co. Ltd.
Type of Crime: Antitrust
Criminal Fine: $10 million
10 Corporate Crime Reporter 40(1), October 21, 1996
30)(tie) Warner-Lambert Company
Type of Crime: Food and drug
Criminal Fine: $10 million
9 Corporate Crime Reporter 46(1), December 4, 1995
34) General Electric
Type of Crime: Fraud
Criminal Fine: $9.5 million
6 Corporate Crime Reporter 30(7), July 27, 1992
35)(tie) Royal Caribbean Cruises Ltd.
Type of Crime: Environmental
Criminal Fine: $9 million
12 Corporate Crime Reporter 23(3), June 8, 1998
35)(tie) Showa Denko Carbon
Type of Crime: Antitrust
Criminal Fine: $9 million
12 Corporate Crime Reporter 19(4), May 10, 1999
37) IBM East Europe/Asia Ltd.
Type of Crime: Illegal exports
Criminal Fine: $8.5 million
12 Corporate Crime Reporter 32(1), August 10, 1998
38) Empire Sanitary Landfill Inc.
Type of crime: Campaign finance
Criminal fine: $8 million
11 Corporate Crime Reporter 39(3), October 13, 1997
39)(tie) Colonial Pipeline Company
Type of Crime: Environmental
Criminal Fine: $7 million
13 Corporate Crime Reporter 9(3), March 1, 1999
39)(tie) Eklof Marine Corporation
Type of Crime: Environmental
Criminal Fine: $7 million
11 Corporate Crime Reporter 37(4), September 29, 1997
41)(tie) Chevron
Type of Crime: Environmental
Criminal Fine: $6.5 million
6 Corporate Crime Reporter, 22(1), June 1, 1992
41)(tie) Rockwell International Corporation
Type of Crime: Environmental
Criminal Fine: $6.5 million
10 Corporate Crime Reporter 15(4), April 15, 1996
43) Tokai Carbon Ltd. Co.
Type of Crime: Antitrust
Criminal Fine: $6 million
12 Corporate Crime Reporter 19(4), May 10, 1999
44)(tie) Allied Clinical Laboratories, Inc.
Type of Crime: Fraud
Criminal Fine: $5 million
10 Corporate Crime Reporter 45(1), November 25, 1996
44)(tie) Northern Brands International Inc.
Type of Crime: Fraud
Criminal Fine: $5 million
13 Corporate Crime Reporter 1(1), January 4,1999
44)(tie) Ortho Pharmaceutical Corporation
Type of Crime: Obstruction of justice
Criminal Fine: $5 million
9 Corporate Crime Reporter 2(3), January 16, 1995
44)(tie) Unisys
Type of Crime: Bribery
Criminal Fine: $5 million
5 Corporate Crime Reporter 35(11), September 16, 1991
44)(tie) Georgia Pacific Corporation
Type of Crime: Tax evasion
Criminal Fine: $5 million
5 Corporate Crime Reporter 38(8), October 7, 1991
49) Kanzaki Specialty Papers Inc.
Type of Crime: Antitrust
Criminal Fine: $4.5 million
8 Corporate Crime Reporter 29(4), July 18, 1994
50) ConAgra Inc.
Type of Crime: Fraud
Criminal Fine: $4.4 million
11 Corporate Crime Reporter 12(1), March 24, 1997
51) Ryland Mortgage Company
Type of Crime: Financial
Criminal Fine: $4.2 million
12 Corporate Crime Reporter 32(1), August 10, 1998
52)(tie) Blue Cross Blue Shield of Illinois
Type of Crime: Fraud
Criminal Fine: $4 million
12 Corporate Crime Reporter 29(1), July 20, 1998
52)(tie) Borden Inc.
Type of Crime: Antitrust
Criminal Fine: $4 million
4 Corporate Crime Reporter 11(9), March 19, 1990
52)(tie) Dexter Corporation
Type of Crime: Environmental
Criminal Fine: $4 million
6 Corporate Crime Reporter 35(6), September 14, 1992
52)(tie) Southland Corporation
Type of Crime: Antitrust
Criminal Fine: $4 million
4 Corporate Crime Reporter 11(9), March 19, 1990
52)(tie) Teledyne Industries Inc.
Type of Crime: Illegal exports
Criminal Fine: $4 million
9 Corporate Crime Reporter 5(3), February 6, 1995
52)(tie) Tyson Foods Inc.
Type of Crime: Public corruption
Criminal Fine: $4 million
12 Corporate Crime Reporter 1(3), January 5, 1998
58)(tie) Aluminum Company of America (ALCOA)
Type of Crime: Environmental
Criminal Fine: $3.75 million
5 Corporate Crime Reporter 29(6), July 22, 1991
58)(tie) Costain Coal Inc.
Type of Crime: Worker Death
Criminal Fine: $3.75 million
7 Corporate Crime Reporter 9(10), March 1, 1993
58)(tie) United States Sugar Corporation
Type of Crime: Environmental
Criminal Fine: $3.75 million
5 Corporate Crime Reporter 27(4), December 9, 1991
61) Saybolt, Inc., Saybolt North America
Type of Crime: Environmental
Criminal Fine: $3.4 million
12 Corporate Crime Reporter 33(1), August 17, 1998
62)(tie) Bristol-Myers Squibb
Type of Crime: Environmental
Criminal Fine: $3 million
6 Corporate Crime Reporter 18(3), May 4, 1992
62)(tie) Chemical Waste Management Inc.
Type of Crime: Environmental
Criminal Fine: $3 million
6 Corporate Crime Reporter 40(5), October 19, 1992
62)(tie) Ketchikan Pulp Company
Type of Crime: Environmental
Criminal Fine: $3 million
9 Corporate Crime Reporter 13(1), April 3, 1995
62)(tie) United Technologies Corporation
Type of Crime: Environmental
Criminal Fine: $3 million
5 Corporate Crime Reporter 21(1), May 27, 1991
62)(tie) Warner-Lambert Inc.
Type of Crime: Environmental
Criminal Fine: $3 million
11 Corporate Crime Reporter 37(3), September 29, 1997
67)(tie) Arizona Chemical Co. Inc.
Type of Crime: Environmental
Criminal Fine: $2.5 million
10 Corporate Crime Reporter 39(5), October 14, 1996
67)(tie) Consolidated Rail Corporation (Conrail)
Type of Crime: Environmental
Criminal Fine: $2.5 million
9 Corporate Crime Reporter 30(1), July 31, 1995
69) International Paper
Type of Crime: Environmental
Criminal Fine: $2.2 million
5 Corporate Crime Reporter 31(7), August 5, 1991
70)(tie) Consolidated Edison Company
Type of Crime: Environmental
Criminal Fine: $2 million
8 Corporate Crime Reporter 46(5), November 28, 1994
70)(tie) Crop Growers Corporation
Type of Crime: Campaign finance
Criminal fine: $2 million
11 Corporate Crime Reporter 4(3), January 27, 1997
70)(tie) E-Systems Inc.
Type of Crime: Fraud
Criminal Fine: $2 million
4 Corporate Crime Reporter 33, September 3, 1990
70)(tie) HAL Beheer BV
Type of Crime: Environmental
Criminal Fine: $2 million
12 Corporate Crime Reporter 39(4), October 12, 1998
70)(tie) John Morrell and Company
Type of Crime: Environmental
Criminal Fine: $2 million
10 Corporate Crime Reporter 6(3), February 12, 1996
70)(tie) United Technologies Corporation
Type of Crime: Fraud
Criminal Fine: $2 million
6 Corporate Crime Reporter 34(4), September 7, 1992
76) Mitsubishi Corporation, Mitsubishi International Corporation
Type of Crime: Antitrust
Criminal Fine: $1.8 million
8 Corporate Crime Reporter 29(4), July 18, 1994
77)(tie) Blue Shield of California
Type of Crime: Fraud
Criminal Fine: $1.5 million
10 Corporate Crime Reporter 18(3), May 6, 1996
77)(tie) Browning-Ferris Inc.
Type of Crime: Environmental
Criminal Fine: $1.5 million
12 Corporate Crime Reporter 23(3), June 8, 1998
77)(tie) Odwalla Inc.
Type of Crime: Food and drug
Criminal Fine: $1.5 million
12 Corporate Crime Reporter 30(1), July 27, 1998
77)(tie) Teledyne Inc.
Type of Crime: False statements
Criminal Fine: $1.5 million
7 Corporate Crime Reporter 34(12), September 6, 1993
77)(tie) Unocal Corporation
Type of Crime: Environmental
Criminal Fine: $1.5 million
8 Corporate Crime Reporter 12(8), March 21, 1994
82)(tie) Doyon Drilling Inc.
Type of Crime: Environmental
Criminal Fine: $1 million
12 Corporate Crime Reporter 21(1), May 25, 1998
82)(tie) Eastman Kodak
Type of Crime: Environmental
Criminal Fine: $1 million
4 Corporate Crime Reporter 14(1), April 9, 1990
82)(tie) Case Corporation
Type of Crime: Illegal exports
Criminal Fine: $1 million
10 Corporate Crime Reporter 22(4), June 3, 1996
85) Marathon Oil
Type of Crime: Environmental
Criminal Fine: $900,000
5 Corporate Crime Reporter 22(5), June 3, 1991
86) Hyundai Motor Company
Type of Crime: Campaign finance
Criminal Fine: $600,000
9 Corporate Crime Reporter 48(3), December 18, 1995
87)(tie) Baxter International Inc.
Type of Crime: Illegal Boycott
Criminal Fine: $500,000
7 Corporate Crime Reporter 13(7) , March 29, 1993
87)(tie) Bethship-Sabine Yard
Type of Crime: Environmental
Criminal Fine: $500,000
9 Corporate Crime Reporter 26(4), July 3, 1995
87(tie) Palm Beach Cruises
Type of Crime: Environmental
Criminal Fine: $500,000
12 Corporate Crime Reporter 30(4), July 26, 1999
87)(tie) Princess Cruises Inc.
Type of Crime: Environmental
Criminal Fine: $500,000
12 Corporate Crime Reporter 30(4), July 26, 1999
91)(tie) Cerestar Bioproducts BV
Type of Crime: Antitrust
Criminal Fine: $400,000
12 Corporate Crime Reporter 28(3), June 29, 1998
91)(tie) Sun-Land Products of California
Type of Crime: Campaign finance
Criminal Fine: $400,000
12 Corporate Crime Reporter 33(1), August 17, 1998
93)(tie) American Cyanamid
Type of Crime: Environmental
Criminal Fine: $250,000
4 Corporate Crime Reporter 46(5), December 3, 1990
93)(tie) Korean Air Lines
Type of Crime: Campaign finance
Criminal Fine: $250,000
9 Corporate Crime Reporter 47(1), December 11, 1995
93)(tie) Regency Cruises Inc.
Type of Crime: Environmental
Criminal Fine: $250,000
12 Corporate Crime Reporter 30(4), July 26, 1999
96)(tie) Adolph Coors Company
Type of Crime: Environmental
Criminal Fine: $200,000
4 Corporate Crime Reporter 43(3), November 12, 1990
96)(tie) Andrew and Williamson Sales Co.
Type of crime: Food and drug
Criminal fine: $200,000
11 Corporate Crime Reporter 44(4), November 17, 1997
96)(tie) Daewoo International (America) Corporation
Type of Fine: Campaign finance
Criminal Fine: $200,000
10 Corporate Crime Reporter 13(3), April 1, 1996
96)(tie) Exxon Corporation
Type of Crime: Environmental
Criminal Fine: $200,000
5 Corporate Crime Reporter 12(1), March 25, 1991
100) Samsung America Inc.
Type of Crime: Campaign finance
Criminal Fine: $150,000
10 Corporate Crime Reporter 6(5), February 12, 1996
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THE TOP 100 CORPORATE CRIMINALS OF THE 1990's
1) F. Hoffmann-La Roche Ltd.
Type of Crime: Antitrust
Criminal Fine: $500 million
12 Corporate Crime Reporter 21(1), May 24, 1999
The Swiss pharmaceutical giant, F. Hoffmann-La Roche Ltd., pled guilty and agreed to pay a record $500 million criminal fine for leading a worldwide conspiracy to raise and fix prices and allocate market shares for certain vitamins sold in the United States and elsewhere.
In Dallas, the Department of Justice charged the company with conspiring to fix, raise, and maintain prices, and allocate the sales volumes of vitamins sold by them and other unnamed co-conspirator companies in the U.S. and elsewhere.
Federal officials also allege that the company allocated contracts for vitamin premixes for customers throughout the U.S. and rigged the bids for those contracts.
The conspiracy lasted from January 1990 into February 1999 and affected the vitamins most commonly used as nutritional supplements or to enrich human food and animal feed -- vitamins A, B 2, B5, C, E, and Beta Carotene.
Vitamin premixes, which are used to enrich breakfast cereals and numerous other processed foods were also affected by the conspiracy, the Department said.
2) Daiwa Bank Ltd. Type of Crime: Fraud
Criminal Fine: $340 million
10 Corporate Crime Reporter 9(3), March 4, 1996
Daiwa Bank Ltd. pled guilty to 16 federal felonies and paid a $340 million criminal fine -- at the time, the largest criminal fine ever imposed in the United States.
Federal officials charged that the bank and bank officials sought to cover-up massive securities trading losses on two separate occasions and deceive and defraud bank regulators.
Daiwa pled guilty to two counts of conspiracy to defraud the United States and the Federal Reserve Bank, one count of misprison of a felony, ten counts of falsifying bank books and records, two counts of wire fraud, and one count of obstructing a bank examination.
Mary Jo White, the U.S. Attorney in Manhattan, told reporters that her office made many efforts to obtain the bank's cooperation in the criminal investigation, "but no meaningful cooperation was ever given."
"These corporate crimes represent companies at their highest levels acting at their worst," White said. "What we aim for in law enforcement in the corporate context is good corporate citizenship, cooperation and openness with authorities, and genuine efforts to improve a corporate culture that has led to the problems and crimes under investigation. Unfortunately, until today's guilty pleas, we had the opposite from Daiwa."
3) BASF Aktiengesellschaft
Type of Crime: Antitrust
Criminal Fine: $225 million
12 Corporate Crime Reporter 21(1), May 24, 1999
A German company, BASF Aktiengesellschaft, pled guilty and agreed to pay a $225 million criminal fine for leading a worldwide conspiracy to raise and fix prices and allocate market shares for certain vitamins sold in the United States and elsewhere.
In Dallas, the Department of Justice charged the company with conspiring to fix, raise, and maintain prices, and allocate the sales volumes of vitamins sold by them and other unnamed co-conspirator companies in the U.S. and elsewhere.
Federal officials also allege that the company allocated contracts for vitamin premixes for customers throughout the U.S. and rigged the bids for those contracts.
The conspiracy lasted from January 1990 into February 1999 and affected the vitamins most commonly used as nutritional supplements or to enrich human food and animal feed -- vitamins A, B 2, B5, C, E, and Beta Carotene.
Vitamin premixes, which are used to enrich breakfast cereals and numerous other processed foods were also affected by the conspiracy, the Department said.
4) SGL Carbon Aktiengesellschaft (SGL AG)
Type of Crime: Antitrust
Criminal Fine: $135 million
12 Corporate Crime Reporter 19(4), May 10, 1999
SGL Carbon Aktiengesellschaft (SGL AG), the world's largest producer of graphite and carbon products, pled guilty to antitrust crimes and agreed to pay a record $135 million fine for participating in an international conspiracy to fix prices and allocate the volume of graphite electrodes in the U.S. and elsewhere.
Graphite electrodes are large columns used in electric arc furnaces in steel-making "mini-mills."
5) Exxon Corporation and Exxon Shipping
Type of Crime: Environmental
Criminal Fine: $125 million
5 Corporate Crime Reporter 11(3), March 18, 1991
Exxon Corporation and Exxon Shipping pled guilty to federal criminal charges in connection with the March 24, 1989 Exxon Valdez oil spill.
The company was assessed a $125 million criminal fine.
Attorney General Dick Thornburgh called the fine "the largest single environmental criminal recovery ever enacted."
The companies pled guilty to misdemeanor violations of federal environmental laws.
Approximately 11 million gallons of crude oil spilled from the Valdez, fouling 700 miles of Alaska shoreline, killing birds and fish, and destroying the way of life of thousands of Native Americans.
6) UCAR International, Inc.
Type of Crime: Antitrust
Criminal Fine: $110 million
12 Corporate Crime Reporter 15(6), April 13, 1998
AR International, Inc. (UCAR), the largest producer of graphite electrodes in the United States, was charged with participating in an international cartel to fix the price and allocate the volume of graphite electrodes sold in the United States and elsewhere.
The company pled guilty and agreed to pay a $110 million criminal fine.
UCAR is charged with violating the Sherman Act by conspiring with unnamed co-conspirators to suppress and eliminate competition.
According to the charges, UCAR and the other companies began to fix prices and allocate their market shares for graphite electrodes in the United States and elsewhere at least as early as July 1992, and continued until at least June 1997.
As a result, steel makers paid noncompetitive and higher prices for graphite electrodes used in manufacturing products that are integral to a variety of business and consumer items.
Graphite electrodes are large columns used in electric arc furnaces in steel-making "mini-mills" to generate the intense heat necessary to melt and further refine steel. Nine electrodes, joined in columns of three, are used in the typical electric arc furnace to melt scrap steel.
7) Archer Daniels Midland
Type of Crime: Antitrust
Criminal Fine: $100 million
10 Corporate Crime Reporter 40(1), October 21, 1996
Archer Daniels Midland (ADM) pled guilty and paid a $100 million criminal fine -- at the time, the largest criminal antitrust fine ever -- for its role in conspiracies to fix prices to eliminate competition and allocate sales in the lysine and citric acid markets worldwide.
Federal officials said that as a result of ADM's crime, seed companies, large poultry and swine producers and ultimately farmers paid millions more to buy the lysine additive.
In addition, manufacturers of soft drinks, processed foods, detergents, and others, paid millions more to buy the citric acid additive, which ultimately caused consumers to pay more for those products.
Lysine is an amino acid used by farmers as a feed additive to ensure the proper growth of livestock. It is a $600 million a year industry worldwide.
Citric acid is a flavor additive and preservative produced from various sugars. It is found in soft drinks, processed food, detergents, pharmaceutical and cosmetic products. Citric acid is a $1.2 billion a year industry worldwide.
8)(tie) Banker's Trust
Type of Crime: Financial
Criminal Fine: $60 million
12 Corporate Crime Reporter 11(1), March 15, 1999
Bankers Trust was fined $60 million for its role in a scheme by high-ranking bank officials to enhance the bank's financial performance by falsely recording approximately $19.1 million in unclaimed customer funds as the bank's income and reserves.
Bankers Trust pled guilty to three counts of making false entries in bank books and records.
In addition to the $19.1 million fine, Bankers Trust was forced to return $17.85 million of the approximately $19.1 million unlawfully recorded as the bank's income and reserves to their rightful owners.
Bankers Trust's plan to return the remaining balance of the $19.1 million will be supervised by the Federal Reserve Bank of New York. Three Bankers Trust executives were indicted in the case.
"Bankers Trust's guilty plea should send a strong signal to all companies that negative consequences will flow from putting pressure on their executives and employees to generate revenues and meet expense targets with any means necessary," said U.S. Attorney Mary Jo White. "While a corporation, especially a financial institution -- naturally expresses concern and interest in the bottom line, it must at the same time ensure that it fosters a corporate culture requiring strict compliance with all applicable legal and ethical obligations."
8)(tie) Sears Bankruptcy Recovery Management Services
Type of Crime: Fraud
Criminal Fine: $60 million
13 Corporate Crime Reporter 7(1), February 15, 1999
A unit of Sears, Roebuck and Company pled guilty to bankruptcy fraud and agreed to pay a $60 million fine.
Sears Bankruptcy Recovery Management Services pled guilty to one count of bankruptcy fraud involving fraudulent reaffirmation practices that began in 1985 and continued until early 1997.
Sears has already paid over $180 million in restitution to about 188,000 debtors and $40 million in civil fines to 50 state attorneys general.
The $60 million criminal fine is the largest fine ever to be paid in a bankruptcy fraud case. The fine also is believed to be the largest criminal fine ever in Massachusetts, and one of the largest nationwide.
"Sears intentionally misled bankrupt debtors without attorneys and defrauded the Bankruptcy Court for over a decade," said U.S. Attorney Donald Stern said. "This was not the haphazard action of a few employees. It represented an outrageous company policy, carried out by those responsible for debt collection, which plainly violated federal law."
The fraudulent scheme involved Sears' practices relating to bankruptcy reaffirmation agreements. Such reaffirmation agreements, when executed in compliance with the Bankruptcy Code, have the effect of maintaining legally binding debts which would otherwise be discharged in bankruptcy. The discharge of debts is the principal benefit to a debtor filing for bankruptcy. The discharge prohibits all creditors from taking any collection action against the debtor for prebankruptcy debts that are not reaffirmed.
According to the criminal charges filed by the U.S. Attorney, beginning in 1985 and continuing until April, 1997, Sears and its subsidiary unit engaged in a scheme to induce bankruptcy debtors to enter into reaffirmation agreements concerning their credit card debts with Sears and lead them to believe that the agreements would be filed with the Bankruptcy Court and were binding contractual obligations, when in fact the agreements were not going to be filed and the debtors had no obligation to pay the debt.
10) Haarman & Reimer Corp.
Type of Crime: Antitrust
Criminal fine: $50 million
11 Corporate Crime Reporter 5(4), February 3, 1997
Haarman & Reimer Corp., a New Jersey-based subsidiary of the Germany-based pharmaceutical and chemical giant Bayer AG, pled guilty and agreed to pay a $50 million criminal fine for participating in an international conspiracy to fix prices and allocate sales in the citric acid market worldwide.
"This $50 million criminal fine sends a clear message to corporations around the world," said Attorney General Janet Reno. "We will not tolerate international conspiracies that defraud American consumers, and those companies that engage in collusive conduct will be punished."
11) Louisiana-Pacific Corporation
Type of Crime: Environmental
Criminal Fine: $37 million
12 Corporate Crime Reporter 23(1), June 8, 1998
Louisiana-Pacific Corporation pled guilty to 18 felonies, was fined $37 million, and was placed on five years probation.
The plea agreement, cut with the U.S. Attorney in Colorado, capped a six-year investigation of the nation's largest producer of oriented stranded board (OSB), a lamented structural wood panel that is used as a plywood substitute in residential and commercial construction.
The criminal investigation began in July 1992, when Dave Horan, a former Louisiana-Pacific supervisor at its Montrose, Colorado facility, filed a lawsuit against the company alleging that he had been fired because he refused to tamper with the Montrose mill's pollution monitoring equipment.
The investigation expanded to include both environmental and consumer fraud violations.
In its plea agreement, the company admitted it committed numerous criminal acts, including conspiring to violate the Clean Air Act and False Statement Act, tampering with the Montrose mill's air pollution monitor on 12 occasions by inserting foil into the monitor, pulling a protective lens off the monitor, miscalibrating the monitor, and turning it off, lying to the Colorado Department of Health about the number of times the Montrose mill violated the limits of its pollution permits, creating and submitting to the American Plywood Association non-representative samples of OSB that the Association used in its on-going quality assurance testing from 1990 to 1994, and misrepresenting to its customers that its OSB conformed to the quality assurance testing requirements of the Association.
12) Hoechst AG
Type of Crime: Antitrust
Criminal Fine: $36 million
12 Corporate Crime Reporter 19(6), May 10, 1999
The German chemical and pharmaceutical giant Hoechst AG pled guilty and agreed to pay a $36 million criminal fine for participating in a 17-year international conspiracy to fix prices and allocate market shares on the sale of sorbates in the United States and elsewhere.
Federal officials charged Hoechst AG and Bernd Romahn, former Marketing Manager of Hoechst's Food Ingredients Business Unit, with conspiring with unnamed sorbates producers to suppress and eliminate competition in the sorbates industry from 1979 until 1996.
In addition to the $36 million fine against the corporation, Romahn has agreed to pled guilty and pay a $250,000 criminal fine for his role in the conspiracy. As part of the plea agreements, Hoechst and Romahn have agreed to cooperate in the ongoing government investigation.
13) Damon Clinical Laboratories, Inc.
Type of Crime: Fraud
Criminal Fine: $35.2 million
10 Corporate Crime Reporter 39(6), October 14, 1996
Damon Clinical Laboratories, Inc., a unit of Corning Inc., pled guilty to a one-count criminal information charging the company with conspiring to defraud the United States by submitting false claims to the Medicare program.
The Corning paid $119 million in fines and penalties -- $35.2 million as a criminal fine and $83.7 to resolve related civil liabilities.
Federal officials said that the $119 million payment represents a recovery of three dollars for every one dollar that the company stole from federal and state health care programs.
"Faced with declining profits and a changing health care marketplace, Damon decided to cheat the Medicare program," said U.S. Attorney Donald Stern. "It did so by submitting literally millions of fraudulent claims for payment to federal and state health care programs for medically unnecessary laboratory tests. What was marketed as a LabScan was actually a massive lab scam."
Federal officials charged that the company bundled three different tests with certain blood panels, causing doctors to order tests that were not medically necessary for the treatment and diagnosis of Medicare beneficiaries.
After physicians had ordered the medically unnecessary tests, Damon then billed Medicare for the bundled tests, knowing that the tests were in fact not necessary.
14) C.R. Bard Inc.
Type of Crime: Food and drug
Criminal Fine: $30.9 million
7 Corporate Crime Reporter 41(1), October 25, 1993
C.R. Bard Inc., a heart catheter manufacturer, pled guilty to a 391 count criminal charge for marketing an unapproved medical device that caused at least 10 patients to undergo emergency heart surgery and at least one death.
The company paid $60.1 million in fines and penalties, including a $30.9 million criminal fine.
A heart catheter is a wire with a balloon like tip which is temporarily threaded into a person's coronary arteries by a doctor and then inflated in order to flatten material which is clogging the artery. The device widens the path through which blood can flow to the heart muscle.
The company pled guilty to conducting illegal experiments on people with the unapproved catheters, including illegal testing of catheters on people for the purpose of determining whether the catheters were safe and effective.
About 22,000 people had used the catheters before they were recalled in 1990.
15) Genentech Inc.
Type of Crime: Food and drug
Criminal Fine: $30 million
12 Corporate Crime Reporter 16(3), April 19, 1999
Genentech Inc., the San Francisco-based biotech and pharmaceutical company, pled guilty to marketing to doctors one of its most lucrative prescription drugs, Protropin, for uses which had not been approved by the Food and Drug Administration (FDA).
Genentech paid a $30 million criminal fine and $20 million in civil penalties.
Genentech will admit that from 1985 to 1994, it aggressively marketed Protropin, a synthetic human growth hormone, to doctors, hospitals, and others for use in the treatment of various medical conditions for which Protropin had not received FDA approval.
It is illegal under federal law for a drug company to market a drug for purposes which the FDA has not approved based on research and clinical trials.
16) Nippon Gohsei
Type of Crime: Antitrust
Criminal Fine: $21 million
12 Corporate Crime Reporter 29(3), July 19, 1999
Nippon Gohsei, a large Japanese chemical producer, pled guilty and agreed to pay a $21 million criminal fine for participating in a 17-year international conspiracy to suppress and eliminate competition in the foods preservatives industry.
In San Francisco, the Justice Department charged Nippon Gohsei Fine Chemicals Business Department with conspiring to fix, raise, and maintain prices, and allocate market shares on sorbates sold by them and unnamed co-conspirators from 1979 to 1996.
Sorbates are chemical preservatives used primarily in high-moisture and high-sugar foods such as cheese and other dairy products, baked goods, and other processed foods.
Roughly $200 million worth of sorbates, including potassium sorbate and sorbic acid, are sold annually worldwide.
17)(tie) Pfizer Inc.
Type of Crime: Antitrust
Criminal Fine: $20 million
12 Corporate Crime Reporter 30(1), July 26, 1999
Pfizer Inc. will pled guilty and agreed to pay criminal fines totaling $20 million for participating in two international price fixing conspiracies in the food additives industry.
Pfizer -- the fourth largest pharmaceutical company in the United States -- was charged with participating in a conspiracy to raise and fix prices and allocate market shares in the U.S. for a food preservative called sodium erythorbate, and to allocate customers and territories for a flavoring agent called maltol.
Federal officials charged Pfizer with conspiring with an unnamed sodium erythorbate producer to fix prices and allocate market shares on sodium erythorbate sales in the United States from 1992 to 1994.
Federal officials also charged the corporation with conspiring with an unnamed maltol producer to allocate customers and territories for sales of maltol in the United States and elsewhere from 1989 until 1995.
Sodium erythorbate is a chemical food preservative used to protect the color and flavor of meat, vegetables, and processed foods.
Maltol is a chemical food flavoring agent used primarily in fruit and caramel-flavored candies and beverages.
The two conspiracies affected more than $65 million in United States commerce.
17)(tie) Summitville Consolidated Mining Co. Inc.
Type of Crime: Environmental
Criminal Fine: $20 million
10 Corporate Crime Reporter 20(3) May 20, 1996
The Summitville Consolidated Mining Co. Inc. pled guilty to 40 counts of violating the Clean Water Act and other federal statutes at its Summitville Gold Mine operation in southwestern Colorado from 1984 to 1992. The company was fined $20 million.
The company pled guilty to one count of conspiracy, four counts of making false statements, five counts of failing to report under the Clean Water Act, and 30 counts of knowingly violating the Clean Water Act by making unauthorized discharges to waters of the United States.
As part of the plea agreement Summitville agreed to pay the maximum criminal fine of $500,000 on each count, for a total fine of $20 million.
Summitville, which opened in 1986, introduced a technology called "cyanide leaching" to extract gold from ore. This process, invented in Scotland and first used in South Africa, involves spraying cyanide solution on the ore to extract gold.
The cyanide waste that was left over was supposed to be stored in lined and covered ponds to prevent contact with local animals which can die if they drink the water. However, the cyanide solution did not stay in the ponds but leaked through the lining into nearby creeks. By 1990, a 16-mile stretch of the Alamosa river was biologically dead.
19)(tie) Lucas Western Inc.
Type of Crime: False Statements
Criminal Fine: $18.5 million
9 Corporate Crime Reporter 4(6), January 30, 1995
Lucas Western Industries, Inc., a subsidiary of Lucas Industries plc, the British defense contractor, pled guilty to 37 counts of submitting false statements to the U.S. Department of Defense and paid a criminal fine of $18.5 million.
Lucas falsely certified to the Defense Department that gearboxes it manufactured had been fully inspected. In fact, many required inspections had not been performed.
The charges focused on faulty gearboxes for two military programs -- the airframe mounted accessory drive for the Navy's F/A-18 aircraft and the aximuth drive unit gearbox for the Army's Multiple Launch Rocket System.
19)(tie) Rockwell International Corporation
Type of Crime: Environmental
Criminal Fine: $18.5 million
6 Corporate Crime Reporter 13(4), March 30, 1992
Rockwell International Corporation pled guilty to ten counts of environmental crimes at the Rocky Flats Nuclear Weapons Plant near Boulder, Colorado.
Rockwell pled guilty to four felony violations of the Resource Conservation and Recovery Act and to one felony and five misdemeanors of the Clean Water Act.
Federal officials charged that Rockwell illegally stored and treated hazardous wastes generated during the production of plutonium "triggers" and other components of nuclear weapons at Rocky Flats.
Federal officials also charged that Rockwell improperly and illegally discharged wastes through its sewage treatment plant, creating the potential for contamination by runoff to a reservoir used for drinking water.
21) Royal Caribbean Cruises Ltd.
Type of Crime: Environmental
Criminal Fine: $18 million
12 Corporate Crime Reporter 30(4), July 26, 1999
Royal Caribbean Cruises Ltd., one of the world's largest passenger cruise lines, pled guilty to 21 felony counts and agreed to pay a record $18 million criminal fine for dumping waste oil and hazardous chemicals and lying to the U.S. Coast Guard.
In a plea agreement, filed in federal courts in six cities, Royal Caribbean admitted that it routinely dumped waste oil from its fleet of cruise ships.
The company also pled guilty to the unprecedented charge that it deliberately dumped into U.S. harbors and coastal areas many other types of pollutants, including hazardous chemicals from photo processing equipment, dry cleaning shops and printing presses.
The $18 million fine is the largest ever to be paid by a cruise line in connection with polluting U.S. waters.
The plea agreements were filed in Miami, New York City, Los Angeles, Anchorage, St. Thomas, U.S. Virgin Islands, and, San Juan, Puerto Rico.
"Royal Caribbean used our nation's waters as its dumping ground, even as it promoted itself as an environmentally 'green' company," said Attorney General Janet Reno. "This case will sound like a foghorn throughout the entire maritime industry."
Under the terms of the plea agreement, the cruise ship operator will also pled guilty to deliberately storing waste from its ships at a Port of Miami pier without a permit, violating federal hazardous waste law.
Some hazardous materials, including toxic solvents from dry cleaning operations, were illegally placed in the garbage aboard the ships. The material was then either incinerated on the ship or dumped in U.S. or foreign ports mixed with ordinary garbage.
22) Teledyne Industries Inc.
Type of Crime: Fraud
Criminal Fine: $17.5 million
6 Corporate Crime Reporter 39(9), October 12, 1992
Teledyne Industries Inc. pled guilty to 35 counts of preparing and submitting false statements regarding the testing of electronic relays at its Teledyne Relays Division in Hawthorne, California.
Teledyne paid a $17.5 million criminal fine.
Federal officials alleged that the company sold commercial grade relay switches to the federal government while certifying that they had successfully met rigorous military testing requirements. The government pays a premium of nearly four times as much for the tested, military version of the switches as it would for the untested, commercial quality relay switch.
23) Northrop
Type of Crime: False statements
Criminal Fine: $17 million
4 Corporate Crime Reporter 9(1), March 5, 1990
Northrop pled guilty to 34 counts of providing false statements to the federal government over a three year period in connection with two military programs -- the Air Launched Cruise Missile and the Navy Harrier Jet.
24) Litton Applied Technology Division (ATD) and Litton Systems Canada (LSL)
Type of Crime: Fraud
Criminal Fine: $16.5 million
12 Corporate Crime Reporter 27(1), July 5, 1999
Two Litton Industries, Inc. units pled guilty to felony charges and agreed to pay $18.5 million in connection with the concealment of commissions paid to consultants who secured military sales to Taiwan and Greece.
Litton Applied Technology Division (ATD) and Litton Systems Canada (LSL) each pled guilty to one conspiracy count. LSL also pled guilty to additional charges of mail fraud and false statements.
The two Litton units agreed to pay $18.5 million -- which includes $16.5 million in criminal fines and $2 million in restitution.
The federal case against the Litton units involves a long-running conspiracy to defraud agencies of the United States and Taiwan in connection with Litton's military sales to governments of Taiwan and Greece.
25) Iroquois Pipeline Operating Company
Type of Crime: Environmental
Criminal Fine: $15 million
10 Corporate Crime Reporter 22(1), June 3, 1996
The Connecticut-based Iroquois Pipeline Operating Company and four of its high-level officers and supervisors pled guilty to numerous criminal violations of the Clean Water Act including failure to clean up or restore damage to nearly 200 streams and wetlands as a result of rushing to meet construction deadlines.
The company agreed to pay $22 million in criminal and civil fines -- including a $15 million criminal fine -- for violating federal environmental and safety laws.
The violations stem from the construction of one of the country's longest natural gas pipelines running 370 miles from Canada through upstate New York and Connecticut to Long Island.
26) Eastman Chemical Company
Type of Crime: Antitrust
Criminal Fine: $11 million
12 Corporate Crime Reporter 38(5), October 5, 1998
Eastman Chemical Company pled guilty and agreed to pay an $11 million criminal fine for participating in an international price-fixing conspiracy in the food preservatives industry.
Roughly $200 million worth of sorbates, which include potassium sorbate and sorbic acid, is sold worldwide every year.
Sorbates are chemical preservatives used primarily as mold inhibitors in high-moisture and high-sugar foods such as cheese and other dairy products, baked goods, and other processed foods.
Eastman is headquartered in Kingsport, Tennessee.
Federal officials alleged that Eastman, through one or more of its employees, conspired with other unnamed sorbate producers to suppress and eliminate competition in the sorbates market.
The Department of Justice alleged that Eastman officials agreed with their co-conspirators on prices to be charged for sorbates sold in the United States.
The single-count felony charges the company with participating in conversations to discuss the price of sorbates sold in the United States, agreeing, during those conversations, to charge prices at certain levels and otherwise increase and maintain prices of sorbates sold in the United States, and issuing price announcements and price quotations in accordance with the agreements reached.
27) Copley Pharmaceutical, Inc.
Type of Crime: Food and drug
Criminal Fine: $10.65 million
11 Corporate Crime Reporter 22(1), June 2, 1997
Copley Pharmaceutical, Inc., a Massachusetts-based generic drug maker, pled guilty to one count of conspiracy to defraud the Food and Drug Administration (FDA) and agreed to pay a fine of $10.65 million.
Federal officials said the investigation began after two brothers -- Michael and Mark Riley -- who worked for the company, "blew the whistle on their superiors and the company."
A criminal information filed by the U.S. Attorney's office in Boston charged the company with:
* changing manufacturing methods from those approved by the FDA for drugs, including prescription and over-the-counter drugs;
* falsifying manufacturing batch records to cover-up the manufacturing deviations;
* submitting false annual reports to the FDA for FDA-approved drugs which did not disclose the manufacturing changes; and
* failing to seek prior FDA approval for certain manufacturing changes.
28) Lonza AG
Type of Crime: Antitrust
Criminal Fine: $10.5 million
12 Corporate Crime Reporter 10(1), March 8, 1999
A Swiss vitamin manufacturer and five United States executives pled guilty and agreed to cooperate in the government's ongoing investigation of illegal collusive practices in the international vitamin industry.
Federal officials charged the company, Lonza AG, with participating in a conspiracy to fix prices and allocate the volume of sales of vitamin B3 (niacin and niacinamide). The company agreed to pay a fine of $10.5 million for its role in the conspiracy.
The five executives were charged with participating in a conspiracy to fix prices and allocate customers and the sales of vitamin B4 (choline chloride). Vitamins B3 and B4 are used to enrich both animal and human nutritional products and are marketed worldwide.
In the Lonza case, federal officials alleged that company executives agreed with the other major vitamin B3 firms to suppress and eliminate competition in the Vitamin B3 market.
29) Kimberly Home Health Care Inc.
Type of Crime: Fraud
Criminal Fine: $10.08 million
12 Corporate Crime Reporter 30(6), July 26, 1999
Olsten Corporation and a subsidiary, Kimberly Home Health Care, Inc., agreed to pay $61 million to settle allegations that both companies defrauded the Medicare program. Olsten agreed to pay nearly $51 million as part of a civil settlement, and Kimberly will enter into criminal plea agreements in three districts and pay more than $10 million in criminal fines.
Kimberly will pled guilty to three separate felony charges, which were filed in Florida and Georgia.
Kimberly will pled guilty to conspiracy, mail fraud and violating the Medicare Anti-Kickback statute, and agreed to pay $10.08 million in criminal fines in connection with its scheme to defraud the Medicare program.
Kimberly's parent company, Olsten, entered into a civil settlement agreement with the United States and agreed to pay $50.92 million to resolve its civil liability stemming from the same Medicare fraud schemes and an additional scheme in Brooklyn, New York.
Olsten and its subsidiaries own and operate management and staffing services for home health agencies in several states, including Florida and Georgia.
Federal officials alleged kickbacks and false Medicare billings made in connection with Kimberly's receipt of fees from another company for Kimberly's management of certain home health agencies.
30)(tie) Ajinomoto Co. Inc.
Type of Crime: Antitrust
Criminal Fine: $10 million
10 Corporate Crime Reporter 40(1), October 21, 1996
Ajinomoto Co. Inc., pled guilty to suppressing and eliminating competition in the lysine market from June 1992 through June 27, 1995 in violation of the Sherman Antitrust Act.
Lysine is an amino acid used by farmers as a feed additive to ensure the proper growth of livestock. It is a $600 million a year industry worldwide.
30)(tie) Bank of Credit and Commerce International (BCCI)
Type of Crime: Financial
Criminal Fine: $10 million
4 Corporate Crime Reporter 3(1) January 22, 1990
Two BCCI units pled guilty to 29 counts of laundering illegal drug profits. At the time of the indictment, Justice Department officials called the BCCI prosecution "the most important money laundering case in U.S. history." Among the bank's customers was Manuel Noriega.
Under the plea agreement, the two BCCI units, Bank of Credit and Commerce International S.A. and Bank of Credit and Commerce International (Overseas) Ltd. would forfeit $14.8 million in alleged drug profits and be placed on probation for five years.
BCCI was assessed $550 million in restitution, fines and penalties, including a $10 million criminal fine.
30)(tie) Kyowa Hakko Kogyo Co. Ltd.
Type of Crime: Antitrust
Criminal Fine: $10 million
10 Corporate Crime Reporter 40(1), October 21, 1996
Kyowa Hakko Kogyo Co. Ltd. pled guilty to suppressing and eliminating competition in the lysine market from June 1992 through June 27, 1995 in violation of the Sherman Antitrust Act.
Lysine is an amino acid used by farmers as a feed additive to ensure the proper growth of livestock. It is a $600 million a year industry worldwide.
30)(tie) Warner-Lambert Company
Type of Crime: Food and drug
Criminal Fine: $10 million
9 Corporate Crime Reporter 46(1), December 4, 1995
Warner-Lambert Company, a Fortune 500 pharmaceutical manufacturer, pled guilty to one felony count and was sentenced to pay a $10 million criminal fine for fraudulently failing to notify the Food and Drug Administration (FDA) about persistent drug stability problems with certain prescription drugs.
Federal officials charged that the company violated federal law by fraudulently failing to report to the FDA drug stability failures concerning the prescription drug Dilantin, a widely used anti-epileptic medication.
34) General Electric
Type of Crime: Fraud
Criminal Fine: $9.5 million
6 Corporate Crime Reporter 30(7), July 27, 1992
General Electric Company pled guilty to charges of defrauding the federal government of $26.5 million in the sale of military equipment to Israel.
The company paid $69 million in fines, penalties and damages for committing the offenses. Of that, $9.5 million is a criminal fine.
The company pled guilty to diverting millions of dollars to a former Israeli Air Force General to assist GE in securing favorable treatment in connection with the F-16 program.
35)(tie) Royal Caribbean Cruises Ltd.
Type of Crime: Environmental
Criminal Fine: $9 million
12 Corporate Crime Reporter 23(3), June 8, 1998
Royal Caribbean Cruises Ltd., one of the world's largest passenger cruise lines, pled guilty to a fleet-wide conspiracy of dumping oil into the ocean and lying to the U.S. Coast Guard to cover up the crimes. The company was fined $9 million.
The plea agreement, which was filed in federal courts in Miami, Florida, and San Juan, Puerto Rico, was reached on the eve of trials scheduled in Miami and Puerto Rico on June 2nd and 8th, 1998.
Royal Caribbean president Jack Williams issued a strong statement accepting responsibility and apologizing for the company's crimes.
Federal officials said that the conspiracy included using false oil record books. These logs were kept to record all overboard discharges. Some Royal Caribbean engineers had referred to the oil record books, which were presented to the Coast Guard during inspections in U.S. ports, as the "Eventyrbok," which means "Fairytale book" in Norwegian.
The company also pled guilty to two counts of obstruction of justice -- witness tampering (ordering an engineer to lie to a federal grand jury) and destroying evidence of a bypass pipe used to make illegal discharges from the cruise ship "Sovereign of the Seas."
35)(tie) Showa Denko Carbon
Type of Crime: Antitrust
Criminal Fine: $9 million
12 Corporate Crime Reporter 19(4), May 10, 1999
Showa Denko Carbon, Inc. (SDC), a U.S. subsidiary of the Japanese firm Showa Financing KK, pled guilty to a charge of participating in an international cartel to fix the price and allocate the volume of graphite electrodes sold in the United States and elsewhere and was fined $9 million.
Graphite electrodes are large columns used in electric arc furnaces in steel-making "mini-mills."
SDC is charged with violating the Sherman Antitrust Act by conspiring with unnamed co-conspirators to suppress and eliminate competition. According to the charges, SDC fixed prices and allocated market share for graphite electrodes in the United States and elsewhere from 1993 until January 1997.
37) IBM East Europe/Asia Ltd.
Type of Crime: Illegal exports
Criminal Fine: $8.5 million
12 Corporate Crime Reporter 32(1), August 10, 1998
A unit of IBM Corp. pled guilty in Washington, D.C. to a 17-count criminal information charging violations that the company unlawfully exported computers to a Russian nuclear lab.
The company, IBM East Europe/Asia Ltd., was sentenced to pay $8.5 million, the maximum fine authorized by law.
IBM East Europe/Asia Ltd., the Russian subsidiary of IBM, admitted that it sold and exported computers to Arzamas-16, the Russian nuclear lab, "having reason to believe that the computers would be used directly or indirectly in research on or development, design, manufacture, construction, testing or maintenance of nuclear explosive devices" in violation of federal export control laws.
38) Empire Sanitary Landfill Inc.
Type of crime: Campaign finance
Criminal fine: $8 million
11 Corporate Crime Reporter 39(3), October 13, 1997
Empire Sanitary Landfill Inc. pled guilty to making illegal campaign contributions and was fined $8 million, the largest criminal fine ever imposed in a federal election campaign finance fraud prosecution.
In Harrisburg, Pennsylvania, federal officials charged Empire with making $129,000 in illegal corporate contributions.
The money went to both the Dole and Clinton 1996 president campaigns and numerous Congressional campaigns, but the Dole campaign received the largest chunk of the money -- $80,000 in illegal contributions in April and May 1995.
39)(tie) Colonial Pipeline Company
Type of Crime: Environmental
Criminal Fine: $7 million
13 Corporate Crime Reporter 9(3), March 1, 1999
Colonial Pipeline Company, the operator of the largest hazardous liquid pipeline in the world, pled guilty to criminal charges in connection with a spill of almost one million gallons of oil into the Reedy River in South Carolina.
The company was fined $7 million and put on five years probation.
Colonial is owned by several of the world's largest oil companies. Shareholders include Mobil, Texaco and Amoco.
The company pled guilty to a misdemeanor charge of violating the Clean Water Act when it failed to exercise reasonable care leading to the rupture of its pipeline where it crosses the Reedy River near Simpsonville, South Carolina.
Colonial Pipeline acknowledged that its actions led to the spill of about 960,000 gallons of diesel fuel affecting a 23-mile segment of the river. The spill killed about 35,000 fish and also affected wildlife such as beaver, muskrat, and turtles, which died as a result of direct contact with the spilled oil.
39)(tie) Eklof Marine Corporation
Type of Crime: Environmental
Criminal Fine: $7 million
11 Corporate Crime Reporter 37(4), September 29, 1997
A tugboat company, Eklof Marine Corporation, its president, the tugboat's captain and two affiliated companies pled guilty to environmental crimes in connection with a 826,000 gallon oil spill off Rhode Island in 1996.
The spill caused substantial environmental damage, killing marine and bird life on Rhode Island's south coast.
The North Cape barge, carrying four million gallons of home heating oil, ran aground after a fire broke out in the engine room of the Scandia tugboat, which was towing the North Cape to Providence.
The crew had to abandon the tug, leaving it and the barge adrift in a severe winter storm.
Eklof Marine Corporation, two affiliate companies, Eklof's president and the tugboat's captain admitted that their combined negligence caused the spill.
The companies agreed to pay $8.5 million in fines and conservation payments and will undertake a $1 million remedial safety program on any vessels navigating Rhode Island waters.
41)(tie) Chevron
Type of Crime: Environmental
Criminal Fine: $6.5 million
6 Corporate Cr