Stories of air-cargo, car-parts executives underscore pain of US antitrust extradition

06 July 2020 00:00

prison fence

Eun Soo Kim spent more than five months alone in a German prison cell while the US government sought his extradition on antitrust charges. Maria Ullings spent roughly six months under house arrest with her husband in an apartment in Italy while the US similarly pursued her. Both eventually plead guilty to their charges, paid criminal fines and served prison sentences.

Ullings was recently released early due to Covid-19 concerns, while Kim is still in custody in Louisiana despite completing his sentence more than three weeks ago. Their stories are different, but they underscore the difficulty antitrust conspirators face once they are targeted by US law enforcement. They could also serve as a warning to other fugitives of US antitrust law enforcement.

Ullings, a 66-year-old Dutch national, was indicted in 2010 by the US Department of Justice antitrust division for fixing the prices of air freight services while she was an executive at Martinair. Kim, a 59-year-old Korean national, was charged by the division in 2015 for his participation in a car parts bid-rigging scheme while an executive at Continental Automotive Korea.

Both had managed to evade US law enforcement until last year, when Kim flew to Frankfurt for a work trip and Ullings traveled to Palermo for a holiday with her husband. Soon after Kim and Ullings arrived in Germany and Italy, respectively, they were detained by authorities and held until their eventual extraditions to the US.

They are just the second and third executives ever to be extradited to the US based solely on antitrust charges. The first, Romano Pisciotti, is an Italian who pleaded guilty in 2014 to rigging bids for hoses used in the oil industry. He served nearly two years and paid a $50,000 fine for his offense.

From interviews and recently unsealed court papers, a potentially grim fate awaits the dozens of foreign nationals currently evading indictments for antitrust crimes.

— Kim —

Kim was arrested shortly after arriving at Frankfurt’s airport on Sept. 14, 2019, MLex has learned. He was then held under dire conditions in a nearby prison while his extradition proceedings unfolded, according to a transcript of his March 2, 2020, sentencing hearing. US District Judge Timothy Batten in Atlanta unsealed the transcript following a request from MLex.

Kim spent a little over five months in solitary confinement in a 120-square-foot cell at JVA Frankfurt, his lawyer Michael Yi told Batten. In arguing for a lenient sentence, Yi said Kim was alone in his cell for 21 to 22 hours each day, with just one meal each day. He was rarely allowed access to a telephone, and he was allowed one visit per month, for one hour, Yi said.

“Your Honor, this must be given weight,” Yi said. “He was held in solitary confinement. He was a man all alone in a foreign country. He wasn't even given regular access to his attorneys.”

These conditions violated United Nations rules adopted in 2015 known as the “Standard Minimum Rules for the Treatment of Prisoners,” or the “Nelson Mandela Rules,” Yi said. Kim’s conditions appear to fall just short of a violation. The rules prohibit “prolonged solitary confinement,” which is defined as holding a prisoner for 22 hours a day or more in excess of 15 days.

“I can give no details on previous or current detainees given provisions on the protection of identities,” a spokesperson for JVA Frankfurt told MLex in a written statement. “Furthermore, all people detained here are treated according to the valid legal provisions in Hessen, which correspond at least to UN standards.”

Yi declined to comment to MLex for this report. A DOJ spokesperson also declined to comment.

Kim was indicted and pleaded guilty to market allocation and bid-rigging charges filed by the DOJ in 2015. As an executive for Continental Automotive Korea, he engaged in a conspiracy that artificially increased the prices of dashboards, or “instrument panel clusters,” that were later installed in Kia Optima cars and sold in the US. The conspiracy Kim took part in affected some $13 million in dashboard sales, according to court records.

“I have regretted it every day since 2013, and I… spend my time now being prosecuted in my mind about it,” Kim told Batten. “And my family has suffered a great deal after I was arrested… I would ask Your Honor’s mercy if possible if I can return to them earlier than later.”

Batten obliged. Over the government's objection, he granted Kim’s request for a nine-month sentence. Prosecutors sought an 18-month sentence. The DOJ and Kim’s lawyers jointly recommended, however, that Kim pay a $130,000 fine and requested that he receive credit for the time he was held by the German government.

Batten agreed to the remaining terms. Kim was set to serve a remainder of three months and 13 days once the credit was applied. Batten said Kim’s age was a factor in that decision and he believed Kim would never again appear in a US court, considering he was being deported following his sentence.

“But candidly, it is significant to me the conditions in which he was held for five and a half months,” Batten said. “I don’t want the government to think that I am soft on antitrust, or that it is not important, because I think what he did was wrong, and I think he knew it was wrong.”

“I think nine months is enough,” Batten concluded.

But Kim’s time in custody has now exceeded that sentence.

Despite officially finishing his sentence on June 14, he is still being held in a room with around 90 other detainees at an Immigrations & Customs Enforcement processing center in Jena, Louisiana, MLex has learned. ICE has not given him a reason for his continued detention and he does not know when he will return home, it's understood.

When asked for comment, an ICE spokesperson said the agency doesn't comment on when or if an individual is departing the US ahead of it taking place, for operational security reasons. The spokesperson also disputed that he had not been given a reason for his continued detention, citing a judgement issued by Batten on March 4.

“Upon completion of the term of imprisonment and release from the custody of the Federal Bureau of Prisons, you must be turned over to a duly authorized immigration official for appropriate removal proceedings from the United States,” the judgment reads.

The ICE spokesperson did not respond to follow-up questions regarding what “appropriate removal proceedings” Kim is undergoing.

Meanwhile, the Covid-19 pandemic continues to creep through ICE facilities. Public health guidance such as the practice of social distancing is hard if not impossible to follow in facilities like Kim’s, where he is being held in a room with around 90 others. As of June 30, at least 15 detainees at the ICE facility housing Kim had tested positive for the coronavirus, including one active case, according to numbers released by the immigration agency.

— Ullings —

Ullings spent roughly six months with her husband in an apartment in Palermo during her extradition proceedings, her attorney, Jodi Avergun, told MLex in an interview. Ullings was arrested in July 2019 after arriving at a hotel in the Italian seaside city where she and her husband planned to spend a vacation.

The Dutch national was then held for roughly a week in a Sicilian jail with no other English speakers, save for a fellow inmate, a Nigerian woman who acted as her translator, while her lawyers plotted their next move. Ullings was then placed under house arrest after Avergun’s Italian co-counsel, Carlo Emma, got involved.

In enforcing Ullings’ house arrest, Avergun said Palermo police checked in on her 3-4 times a day, including in the middle of the night. But after two months, the local Italian court allowed her to leave the house twice a week for one hour a day.

“I’m sure she’ll wake up in the middle of the night, you know, thinking about this for many years to come,” Avergun told MLex.

Ullings was caught up in a long-running price-fixing probe by the DOJ and antitrust enforcers in Europe and elsewhere involving fuel surcharges on air cargo services. She was charged with fixing the prices of surcharges from January 2001 to February 2006, when she was a senior vice president of sales at Martinair and in charge of the company’s cargo pricing. The conduct affected shipments of US Air Force parts, according to a court document supporting the extradition request.

When Ullings was arrested in Italy, Avergun said they planned to fight the request and didn't think she would be extradited. As in Holland, Avergun said she believed Ullings’ alleged conduct wasn't criminal under Italian law. But her predictions were wrong.

The primary hurdle to extradite a foreign national from any country with which the US has an extradition treaty is dual criminality. That requires the conduct for which an individual is being sought to be a crime punishable by jail time in both countries.

Ultimately, Avergun said the Court of Appeal of Palermo found that the Sherman Act, which Ullings was accused of violating, was equivalent to an Italian law prohibiting criminal associations.

The lawyer said she was shocked, but suspected that the ruling was influenced by Italian-US relations that had nothing to do with Ullings’ case. Avergun said Palermo has a “tremendous amount of indebtedness” to the US for its assistance in helping root out mafia influence in the city, which she experienced firsthand as a federal prosecutor in Brooklyn in the 1990s.

“Maybe that somehow implicitly or indirectly influenced the court because it was not based in law,” Avergun said.

An appeal could have taken another six months, Avergun said, adding that the DOJ suggested that if she waived her right to an appeal, Ullings would be more likely to get credit for her time in Italy. With that calculation in mind, Ullings decided to go to the US, plead guilty and serve her sentence.

She was sentenced to pay a $20,000 fine and serve eight months in prison by US District Judge Michael Brown, also in Atlanta, on Jan. 23, 2020. Brown said a 14-month sentence was reasonable for Ullings’ case, but gave her a six-month credit for her time in Italy.

Avergun said the inmates and staff at the prison Ullings was held in, the privately-run Robert A. Deyton facility in Georgia, were kind and deferential to her. Most people didn’t understand the crime she had committed, Avergun said.

“I know that to her it was less bad than it could have been and I think that she felt she was treated with respect…as much as an inmate is accorded respect, but she had no complaints about the professional staff there.”

But at the time of her sentencing in January, the Covid-19 pandemic was making inroads in the US and Georgia. By April 13, the disease had claimed 695 lives in the state and 18,150 Georgians were confirmed to have the virus, according to statistics published by the Georgia Department of Public Health.

On that same day, nearly three months after her sentencing, Ullings asked for early release due to Covid-19. The 66-year-old said she was particularly vulnerable to the virus because of her age and high blood pressure. Court documents show that Ullings’ prison facility had three confirmed coronavirus cases, though the facility took steps to mitigate the virus' spread upon the confirmations.

At the outset of the videoconference hearing on Ullings request for early release, Brown noted that the guard supervising her was not wearing a mask. Avergun told Brown the prison guards were inconsistently wearing masks and that very few wore gloves except when serving food.

Brown’s observation and Ullings’ descriptions show just a small example of the challenges the US prison population faces in combatting the spread of Covid-19. In Ullings’ request, she said that there were as many as 768 individuals incarcerated at her facility that shared toilets, soap, phones, computers and common areas, and that hand sanitizer is prohibited because it’s considered contraband.

Ullings’ experience isn't isolated. Numerous news outlets have reported conditions in US prisons similar to the ones she describes. The New York Times reported June 16 that the number of US prison inmates known to be infected with the disease had doubled over the past month to more than 68,000.

But despite Ullings’ pleadings, the DOJ strictly opposed her release. Department attorney Jason Jones said her health risks weren’t serious enough to warrant a release and that a “higher medical condition” was necessary.

Brown determined that Ullings had the more persuasive arguments and ordered her release on May 12. Avergun said Ullings left the US once her release was granted.

Avergun said there was nothing unfair or unprofessional about what the DOJ did, but she thinks the DOJ’s strict opposition to Ullings request ultimately harmed them. She speculated that they were trying to set a hard line against criminal antitrust violators. Any unreasonable position they took was due to “the concern that they have for all the other defendants out there who haven’t surrendered,” she said.

Upon announcing Ullings’ extradition to the US in January, DOJ antitrust chief Makan Delrahim issued a warning to those who had violated US criminal antitrust law.

"This extradition ruling by the Italian courts — the seventh country to extradite a defendant in an Antitrust Division case in recent years, and the second to do so based solely on an antitrust charge – demonstrates that those who violate U.S. antitrust laws and seek to evade justice will find no place to hide," Delrahim said.

Due to the secretive nature of law enforcement investigations, it’s hard to know exactly how many outstanding arrest warrants exist for antitrust law violators. There could be dozens of fugitives that participated in the cartels that brought Kim and Ullings down. On top of those, the DOJ has investigated several international cartels in the computer-monitor manufacturing, shipping and energy industries.

For the facilitators of those cartels that remain at large, the stories of Kim and Ullings will serve as chilling examples of what could lie ahead.

--Lewis Crofts in Brussels contributed to this report.

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