TWO CLEVELAND SCRAP METAL COMPANIES, OWNER, AND AN EMPLOYEE
WASHINGTON, D.C. A federal grand jury in Cleveland today indicted M.
Weingold & Co. (M. Weingold); Harry Rock & Associates Inc. (Rock), formerly
known as Harry Rock & Company; their owner, Jack Weingold; and an employee of
M. Weingold, Loren Margolis, for conspiring to allocate scrap metal suppliers
and rig bids for the purchase of scrap metal in Northeast Ohio, the Department
of Justice announced. In addition, Rock was indicted for committing wire fraud
in connection with a bid-rigging attempt with a competitor.
According to the charges filed in U.S. District Court in Cleveland, the
companies, M. Weingold and Rock, both headquartered in Cleveland; Jack
Weingold of Chagrin Falls, Ohio; and Loren Margolis of Moreland Hills, Ohio,
were charged with participating in two separate conspiracies–one beginning at
least as early as December 1993 and continuing at least until October 1999 and
the other beginning at least as early as December 1993 and continuing at least
until November 1999–to allocate suppliers and rig bids for scrap metal.
Additionally, Rock was charged with wire fraud in connection with a scheme to
defraud a supplier of scrap metal by attempting to rig a bid with one of
Rocks competitors in January 2000.
Todays indictment demonstrates our ongoing commitment to prosecute
anticompetitive conduct that harms American businesses and consumers, said R.
Hewitt Pate, Assistant Attorney General in charge of the Departments
Antitrust Division.
The indictment charges that the two conspiracies were carried out through
meetings and discussions among the conspirators, during which they agreed to
allocate scrap metal suppliers among themselves and not compete against each
other, denying the companies and individuals from whom they purchased scrap
metal a competitive price. During their collusive discussions and meetings,
the conspirators agreed to rig bids to scrap metal suppliers, including
agreeing on which designated co-conspirator would purchase scrap metal from
particular suppliers and the prices to be submitted to them, refraining from
submitting bids to scrap metal suppliers, and submitting complementary,
non-competitive and rigged bids or price quotations to scrap metal suppliers.
This is the fifth case resulting from an ongoing criminal investigation of the
scrap metal industry being conducted by the Antitrust Divisions Cleveland
Field Office. Previously, Howard Bahm, the former president of Rock, pleaded
guilty to having engaged in four separate antitrust conspiracies, similar to
the ones charged today. Bahms plea agreement with the government, in addition
to requiring his continuing cooperation, requires him to pay a fine of $1
million, and he faces up to 37 months of jail. Bahm is awaiting sentencing.
Two other Cleveland-area scrap metal companies, Bay Metal Inc. (Bay Metal) of
Richfield, Ohio, and Bluestar Metal Recycling Co. (Bluestar) of Elyria, Ohio,
previously pleaded guilty to conspiring to allocate scrap metal suppliers in
the purchase of scrap metal in Northeast Ohio. Bay Metal also pleaded guilty
to rigging bids. In addition, Bluestar pleaded guilty to a conspiracy to
commit mail fraud and transport interstate fraudulently obtained property. Bay
Metal paid a fine of $850,000; Bluestar paid fines and restitution totaling
$675,000.
In another related case, United States v. Atlas Iron Processors Inc., et al.,
four individuals and two companies were convicted at trial in Miami, Florida,
for conspiring to allocate suppliers and fix prices, including a
Cleveland-area company, Atlas Iron Processors Inc. and its three top officials
and owners, Anthony J. Giordano, Sr., Anthony J. Giordano, Jr., and David
Giordano, each of whom was sentenced to one year in jail in addition to paying
fines and restitution.
M. Weingold, Rock, Jack Weingold and Loren Margolis are charged with violating
Section One of the Sherman Act, which carries a maximum fine of $10 million
for a corporation and three years imprisonment and a fine of $350,000 for an
individual on each count. Rock is also charged with violating 18 U.S.C. 1343
(wire fraud), which carries a maximum fine of $500,000. The maximum fines may
be increased to twice the gain derived from the crime or twice the loss
suffered by the victim of the crime, if either of those amounts is greater
than the statutory maximum fine. In addition, the defendants could be ordered
to pay restitution for the full amount of the victims loss.
The ongoing investigation is being conducted by the Antitrust Divisions
Cleveland Field Office with the assistance of the Federal Bureau of
Investigations Cleveland Office.
Anyone with information about supplier, customer or territorial allocation,
bid rigging, price fixing, or other anticompetitive conduct in the scrap metal
industry should call the Antitrust Divisions Cleveland Field Office at (216)
522-4070, or the Federal Bureau of Investigations Cleveland Office at (216)
522-1400.
