Bumble Bee Foods' former CEO has been sentenced to more than three years in prison for his role in a conspiracy to fix prices for canned tuna involving three major companies, the U.S. Department of Justice said.
Christopher Lischewski, the former executive, was asked to pay a fine of $100,000 and serve a term of 40 months. According to prosecutors, the scheme affected more than $600 million in canned tuna sales.
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The move "would deter" corporate-level misconduct
In a statement, Assistant Attorney General Makan Delrahim said the sentence would deter corporate-level misconduct.
Delrahim said the sentence imposed on the Bumble Bee Foods' former CEO will be a "significant deterrent" in the C-suite and the boardroom.
"Executives who cheat American consumers out of the benefits of competition will be brought to justice, particularly when their antitrust crimes affect the most basic necessity, food," the official added.
Lischewski was previously indicted by a federal grand jury in San Francisco. He pleaded not guilty. However, a jury convicted him of a single count of taking part in a conspiracy to fix canned tuna prices late last year.
According to court records, Mr. Lischewski also faced a maximum sentence of 10 years and a $1 million fine when charged in May 2018.
The Justice Department said the court found hundreds of millions of dollars in canned tuna sales had been impacted by the three-year plot.
The conspiracy scheme started in or around November 2010 and lasted until December 2013, court records show. According to the New York Times, Lischewski managed to go undetected by the authorities by speaking in code while talking to other co-conspirators by meeting in remote locations and offering false justifications.
Chicken of the Sea's role
Bumble Bee - who filed for bankruptcy in 2019 - had pleaded guilty to conspire with StarKist and Chicken of the Sea to keep prices high falsely.
The company pleaded guilty and was sentenced to pay a fine of $25 million, and fined $100 million for StarKist. Three executives who were charged in his trial, along with Lischewski, pleaded guilty and testified.
The scheme came to light after an attempt by the Chicken of Thai Union Group to buy Bumble Bee based in San Diego in 2015 had failed, according to court records. Chicken of the Sea executives then alerted federal investigators, who agreed to shield the company in exchange for cooperation from criminal prosecution.
When StarKist was charged in 2018, the company's chief executive, Andrew Choe "coordinated" with the Department of Justice investigation and was ready to accept responsibility for his role in the price-fixing scheme.
The authorities became aware of the scheme in 2015 when the Bangkok-based Thai Union Frozen Goods unsuccessfully attempted to buy Bumble Bee Foods, which was financially struggling. Thai Union had already bought Chicken of the Sea and hoped that combining with Bumble Bee would make it the United States market leader.
Until the merger happened, a food wholesaler in New York found that while raw tuna prices had plummeted, canned-tuna prices did not. In California, the wholesaler has filed a lawsuit. Other grocers, restaurants, and retailers - including Walmart, Target, and Kroger - filed lawsuits, and the merger disintegrated.
