The term “white collar crime” refers to a wide range of offenses involving financial and commercial activities. Many federal statutes dealing with financial regulations have both civil and criminal enforcement provisions. This means that the government can bring a civil lawsuit, which could result in penalties and damages, or a criminal prosecution, which could result in a fine and a prison sentence. Antitrust law deals with monopolistic and other anticompetitive practices by businesses. Most federal antitrust cases involve civil enforcement, but one statute allows criminal prosecution by the Department of Justice (DOJ). An online retail company recently pleaded guilty to criminal antitrust violations in a Texas white collar prosecution. United States v. Zaappaaz, Inc., No. 4:17-cr-00477, information (S.D. Tex., Aug. 7, 2017). Its president also pleaded guilty to a similar charge. United States v. Makanojiya, No. 4:17-cr-00478, information (S.D. Tex., Aug. 7, 2017).
The Sherman Antitrust Act of 1890 was the first major federal statute addressing anticompetitive business practices. It prohibits contracts and conspiracies “in restraint of trade or commerce” across state lines. 15 U.S.C. § 1. The purpose of this statute, according to the Supreme Court, “is to protect the public from the failure of the market” by prohibiting “conduct which unfairly tends to destroy competition itself.” Spectrum Sports, Inc. v. McQuillan, 506 U.S. 447, 458 (1993). Criminal penalties may include up to 10 years in prison. Congress has amended the statute over the years to increase the monetary penalties. Originally, the law provided for a fine of up to $5,000. Since 2004, the maximum penalty has been $100 million for a corporation, or $1 million for an individual or an organization other than a corporation. Additionally, private parties may be able to file civil lawsuits for antitrust violations that directly caused them harm.
The corporate defendant is a Texas corporation that sells “customized promotional products, including wristbands and lanyards,” through several websites. Zaappaaz, information at 1. The government alleged that the defendant conspired with other e-commerce businesses involved in the sale of similar products “to suppress and eliminate competition by fixing and maintaining prices.” Id. at 2. The defendant allegedly made these agreements at in-person meetings or in communications through text messaging and social media platforms. This occurred from approximately October 2014 until about June 2016. The information in Makanojiya makes almost identical allegations against that defendant, identifying him as the president and director of the corporate defendant.