In a historic case, J&J Korea Inc., a South Korean company, has been fined $9 million in a U.S. federal court for bid rigging and fraud related to U.S. military projects in South Korea. This ruling sets a precedent in the investigation of bid rigging and fraud involving U.S. military facilities in the country.
The sentencing comes after J&J Korea Inc. pleaded guilty to one count each of wire fraud and conspiracy to restrain trade in May. The company engaged in a deceitful scheme from November 2018 to March 2021, defrauding the U.S. Department of Defense (DOD) under a U.S. Army Corps of Engineers (USACE) contract. By bypassing the competitive bidding process, they caused overpayments totaling approximately $3.6 million.
The significant fine and restitution order reflect the importance of protecting U.S. taxpayer funds, both domestically and internationally, according to Deputy Assistant Attorney General for Criminal Enforcement Manish Kumar. This ruling demonstrates the commitment of the Department of Justice and other agencies to combat fraud and conspiracy that undermines fair competition.
The FBI's Criminal Investigative Division and the Department of the Army Criminal Investigation Division have both expressed their dedication to pursuing justice against entities involved in fraudulent activities. The sentencing of J&J Korea Inc. serves as a warning to other individuals and companies that exploit governmental processes to defraud the U.S. government and its citizens.
As part of ongoing efforts to combat antitrust violations and fraudulent activities in government procurement globally, the sentencing of J&J Korea Inc. is a significant step. The case was led by the Antitrust Division’s Washington Criminal II Section, CID, and the FBI, in collaboration with the Procurement Collusion Strike Force (PCSF).
The PCSF encourages anyone with knowledge relevant to this case or other anti-competitive practices to come forward as the investigation continues. This landmark ruling sends a strong message that bid rigging and fraud will not be tolerated, and measures will be taken to protect the integrity of government procurement processes.
