StarKist’s Stephen Hodge charged in ongoing tuna price-fixing scandal

Published on
June 5, 2017
StarKist

Stephen L. Hodge, a former senior vice president of sales for StarKist, has been charged with price-fixing in the latest development in a federal investigation that has shaken up the canned tuna industry in the United States.

The scandal, which originated out of a joint criminal antitrust investigation by the U.S. Department of Justice and the Federal Bureau of Investigation, has engulfed the so-called “big three” tuna companies – Bumble Bee Foods; Thai Union-owned Tri-Union Seafoods, which controls Chicken of the Sea; and StarKist, owned by Dongwon Industries, South Korea’s largest seafood company. Last month, Bumble Bee Foods became the first of the three to plead guilty to price-fixing and was subsequently fined USD 25 million (EUR 22.8 million). Two Bumble Bee executives also pled guilty to price-fixing earlier this year and are awaiting sentencing.  

Hodge is the first seafood industry executive not associated with Bumble Bee to be charged as a result of the investigation. The one count of price-fixing he is charged with comes with a maximum penalty of a 10-year prison term followed by a three-year supervised release, a fine of USD 1 million (EUR 894,000), and any restitution the court deems applicable.

In an emailed statement to SeafoodSource, StarKist Senior Manager for Corporate Affairs Michelle Faist said her company has been aware of the investigation since 2015 and is cooperating with investigators.

“In 2015, StarKist Co. received a subpoena from the U.S. Department of Justice seeking information as part of a packaged seafood industry investigation,” Faist said. “StarKist has cooperated and is continuing to fully cooperate with the investigation. Steve Hodge is a former employee who left the company in December 2013 and has had no affiliation with StarKist since that time.”

According to documents filed 30 May in the U.S. District Court in Northern California, from as early as 2011 and continuing until around 2013, Hodge and unnamed co-conspirators “knowingly entered into and engaged in a combination and conspiracy to fix, raise, and maintain the prices of packaged seafood sold in the United States.”

“[Hodge] engaged in conversations and discussions and attended meetings with representatives of other major packaged-seafood-producing firms; agreed and reached mutual understandings during these conversations, discussions, and meetings, to fix, raise, and maintain the prices of packaged seafood sold in the United States; and negotiated prices and issued price announcements for packaged seafood in accordance with the agreements and mutual understandings reached,” according to the charging documents.

Additional court documents filed on 30 May revealed the Department of Justice is seeking to tie the Hodge case into its previous cases against Bumble Bee executives Kenneth Worsham and Walter Scott Cameron. That will ensure that Hodge’s case will be heard by San Francisco Judge Edward Chen, who presided over all current cases involving the price-fixing conspiracy.

“If heard by separate judges, [it] would likely involve substantial duplication of labor by the two judges,” the filing said. “The assignment of these cases to a single judge is likely to conserve judicial resources and promote and efficient determination of each action.”

The sentencing date for Worsham and Cameron has been set for 4 October, while Bumble Bee’s final court date is 2 August. Worsham and Cameron have received recommendations for reduced sentences in exchange for cooperating with the investigation, including agreements to testify in future trials pertaining to price-fixing in the U.S. canned tuna industry.

Separately, several large retailers, including Wal-Mart, have filed a civil lawsuit against the “big three” tuna companies, which remains on hold until the criminal investigation is completed.

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