Antitrust Law Daily Flooring contractor agrees to plead guilty, pay $1.4M for bid rigging
Friday, August 28, 2020

Flooring contractor agrees to plead guilty, pay $1.4M for bid rigging

By Thomas G. Wolfe, J.D.

Vortex Commercial Flooring, the largest corporation to be charged thus far in ongoing probe, agreed to cooperate with the Justice Department.

The Department of Justice has announced that Vortex Commercial Flooring Inc., a Chicago-area commercial flooring contractor, has agreed to plead guilty and "pay at least $1.4 million in fines and restitution" for its role in a "long-running antitrust conspiracy to rig bids and fix prices for commercial flooring services and products sold in the United States." Noting that this is the second corporate guilty plea in the federal investigation, Assistant Attorney General Makan Delrahim of the Justice Department’s Antitrust Division remarked that "Vortex is the largest flooring corporation charged to date." Assisting with the investigation, FBI Special Agent Emmerson Buie, Jr. stated, "Vortex ultimately cheated innocent businesses and communities out of the competitive pricing necessary to complete flooring projects." According to a one-count superseding felony charge filed in the federal district court in Chicago, Vortex and its previously charged executives "engaged in a conspiracy to suppress and eliminate competition in the commercial flooring market" from early 2009 until at least June 2017 "by agreeing with other individuals and companies to submit complementary bids so that the designated company would win the contract."

Notably, Vortex also has agreed to cooperate with the Justice Department in its ongoing investigation into bid rigging, price fixing, and other anticompetitive conduct of Chicago-area commercial flooring contractors.

Other corporate defendant. Previously, in August 2019, an Illinois-based commercial flooring contractor, PCI FlorTech, agreed to plead guilty to a felony count for its role in the alleged conspiracy to rig bids and fix prices for commercial flooring services and products. In addition, PCI FlorTech agreed to pay a $150,000 criminal fine and pledged its cooperation with the Antitrust Division’s ongoing investigation.

Individual defendants. Earlier this year,two commercial flooring executives, Robert A. Patrey Jr. and Kenneth R. Smith, pleaded guilty for their respective roles in the conspiracy to rig bids and fix prices for commercial flooring services and products. Smith pleaded guilty in March 2020, while Patrey entered a guilty plea in late February in the Chicago federal district court. Also charged at that time was Delmar E. Church, Jr, another individual who, along with Patrey and Smith, are considered to be part of the executive leadership team behind Vortex Commercial Flooring during the pertinent time period.

Further, in February 2020, Carter Brett, an account executive for a large flooring manufacturer, was charged by the Department for his role in conspiring to rig bids and fix prices for commercial flooring products and services, and for his role in a money laundering conspiracy involving kickbacks. Earlier, in April 2019, Michael Gannon, a former Vice President of Sales for Mr. David's Flooring International, LLC, pleaded guilty as part of a plea agreement with the Government.

Companies: Mr. David's Flooring International, LLC; PCI FlorTech; Vortex Commercial Flooring Inc.

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