Christopher Lischewski, the former president and CEO of Bumble Bee Foods, was convicted on 3 December, 2019, of helping to orchestrate a price-fixing conspiracy between Bumble Bee, Chicken of the Sea, and StarKist, the so-called “Big Three” players in the U.S. canned tuna sector.
Lischewski was found guilty of one count of price-fixing by a jury in the U.S. District Court for the Northern District of California and faces up to 10 years in prison and a fine of USD 1 million (EUR 900,000). His sentencing has been set for 8 April, 2020. Lischewski’s conviction may also open him up as a target of civil lawsuits filed by parties who overpaid for canned tuna as a result of the price-fixing, according to Eric Snyder, chairman of the bankruptcy practice at Wilk Auslander, a New York City-based law firm.
“Given the criminal fine here, he might end up filing for personal bankruptcy,” Snyder told the Los Angeles Times.
In a statement released by the U.S. Justice Department, FBI San Francisco Special Agent in Charge John F. Bennett said the verdict sets an example for top executives' behavior.
“This guilty verdict demonstrates the FBI’s commitment to working with our law enforcement partners to investigate price-fixing schemes that harm consumers,” Bennett said. “A company’s senior leadership sets the example for how it should operate, and in this case a CEO prioritized his own greed at the expense of American consumers.”
Lischewski’s trial took four weeks and featured testimony from major players in the canned tuna sector, including former Chicken of the Sea CEO Shue Wing Chan and Renato Curto, the former president and CEO of Bumble Bee tuna supplier Tri Marine, as well as Lischewski’s former employees, Kenneth Robert Worsham and Walter Scott Cameron, who both claimed under oath that Lischewski had directed the conspiracy.
“Today’s verdict reaffirms the Division’s commitment to rooting out collusion that robs American consumers of the benefits of competition when they purchase household staples like canned tuna,” Assistant Attorney General Makan Delrahim, of the Department of Justice’s Antitrust Division, said. “The jury’s verdict is a reminder that no one, including members of the C-suite, is above the law. Executives who conspire to cheat consumers for their own benefit will be held accountable for their illegal conduct.”
According to evidence presented during the trial, the price-fixing conspiracy affected hundreds of millions of dollars in sales throughout the United States. Justice Department prosecutors worked during the trial to show Lischewski and his co-conspirators employed measures to conceal conspiratorial conduct, including meeting at offsite locations; used third-party e-mail addresses; and discouraged retention of documents concerning the conspiracy.
Keker, Van Nest, and Peters Partner Elliot Peters, Lischewski’s lead counsel said in a statement following the verdict that he would continue to fight on behalf of his client.
“We are very disappointed by today’s verdict,” he said. “We continue to believe strongly in Chris Lischewski’s innocence and intend to continue vigorously to pursue justice for Chris.”
The investigation into collusion in the packaged seafood marketing remains ongoing, according to the Department of Justice, and continues to be led by the Antitrust Division’s San Francisco Office and the FBI’s San Francisco Field Office.
The investigation has already netted guilty pleas from numerous individuals involved in the conspiracy, including Worsham and Cameron, as well as from former StarKist Vice President of Sales Stephen Hodge. Bumble Bee and StarKist, also pleaded guilty to the conspiracy, with Bumble Bee sentenced to pay a criminal fine of at least USD 25 million (EUR 22.5 million). That fine was reduced from a potential USD 100 million (EUR 90 million) due to the company’s financial situation, but desptie the reduction it still contributed to Bumble Bee's recent bankruptcy filing.
In September, StarKist Co. was sentenced to pay a USD 100 million (EUR 90 million) criminal fine, which its lawyers have said could be a “life or death” situation for the firm.
Last week, Chicken of the Sea, which was the whistleblower in the criminal case – saving it from paying criminal fines – said in response to Bumble Bee’s bankruptcy filing that “there have been questions surrounding the financial stability of the other leaders in the North American shelf-stable seafood industry.”
“Chicken of the Sea International (COSI) is pleased to have fully cooperated and resolved the industry investigation by the Department of Justice; and as the whistleblower, will not be prosecuted and will not have to pay a fine,” the company said in its recent statement. “Additionally, COSI has made significant progress in the civil case settlement process, having reached fair and responsible agreements with 90 percent of all plaintiffs, on reasonable terms. The company is engaged with the remaining plaintiffs and believes, fair and equitable solutions can be found in line with the settlements already reached with the broad majority of U.S. retailers, foodservice companies and especially the U.S. consumers and consumer representatives.”
A StarKist spokesperson told SeafoodSource that it would not respond to Chicken of the Sea’s questioning of its financial health.
“StarKist does not comment on another company’s news,” the spokesperson said in an email.