Antitrust Law Daily Customized product sellers sentenced in price fixing probe
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Friday, June 28, 2019

Customized product sellers sentenced in price fixing probe

By Jody Coultas, J.D.

Eleven criminal antitrust cases have been filed in the ongoing probe of online promotional products industry.

Gennex Media LLC (aka Brandnex.com and PMGOA) and its owner have pleaded guilty and been sentenced for conspiring to fix prices for customized promotional products sold online to customers in the United States, according to an announcementmade by the Department of Justice. Under its plea agreeement, Gennex was sentenced to pay a $752,717 criminal fine. The company’s president, Akil Kurji, was sentenced to eight months in custody, a $20,000 criminal fine, and three years of supervised release (U.S. v. Gennex Media LLC, Case 4:18-cr-00654; U.S. v. Kurji, Case 4:18-cr-00655).

Charges filed against Gennex Media and Kurji alleged that a number of companies that sold customized promotional products online agreed to fix prices for products, including wristbands, lanyards, temporary tattoos, and buttons. From May 2014 until at least June 2016, the online sellers allegedly used social media platforms and encrypted messaging applications, such as Facebook, Skype, and Whatsapp, to reach and implement their illegal agreement.

"Today’s guilty plea and sentencings demonstrate the Division’s commitment to uncovering and prosecuting collusion that affects the online marketplace," said Makan Delrahim, Assistant Attorney General in charge of the Department of Justice Antitrust Division. "We will continue to hold companies and their top executives accountable, seeking significant criminal fines and prison terms for those who violate the antitrust laws at the expense of everyday Americans."

Of the 11 defendants that have been charged by the Antitrust Division since the investigation into the online customized promotional products industry was announced in August 2017, five individuals and four companies have pleaded guilty. The corporate guilty pleas in the investigation have resulted in criminal fines totaling almost $10 million. Zaappaaz Inc. and its top executive were the first to be named in the probe. In August 2017, the Justice Department announced that Zaappaaz Inc. and its president Azim Makanojiya agreed to plead guilty to conspiring to fix prices for these products. The company agreed to pay a $1.9 million criminal fine. Also in 2017, the government announced that a second e-commerce company, Custom Wristbands, Inc., and a company executive would plead guilty to similar charges. Custom Wristbands agreed to pay a $409,342 criminal fine. The company’s owner/CEO, Christopher Angeles, was sentenced to serve one month in prison and to serve one year of supervised release. He also was fined $20,000.

Attorneys: Danielle M. Garten, US Dept of Justice, for the United States. James Madison Ardoin, III (Jones Walker, LLP) for Gennex Media LLC.

Companies: Gennex Media LLC

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