Antitrust Law Daily Heir location service principal receives probation for market allocation conspiracy
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Tuesday, September 22, 2020

Heir location service principal receives probation for market allocation conspiracy

By Thomas G. Wolfe, J.D.

Brad Davis of Brandenburger & Davis avoided incarceration upon sentencing for conspiring to allocate customers in the heir location services industry.

In connection with the U.S. Department of Justice Antitrust Division’s criminal proceeding in the federal district court in Chicago in which Brad Davis and the Brandenburger & Davis firm pleaded guilty to charges that they conspired to allocate customers in the heir location services industry, Davis has received probation at a September 17 hearing instead of a sentence of incarceration that was recommended by the government. Although the Justice Department had maintained that the court should impose a sentence of 13 months of incarceration, Davis, the president of the firm, argued that he had cooperated with the government and its probe for nearly six years and pointed to a similarly situated conspirator who previously was sentenced to probation even though he did not initially cooperate. Moreover, the probation office recommended a sentence of probation as well, Davis communicated to the court (U.S. v. Davis, Case No. 1:15-cr-00752-002; U.S v. Brandenburger & Davis, Case No. 1:15-cr-00752-001).

According to the Justice Department, providers of heir location services identify heirs to estates of intestate decedents and, in exchange for a contingency fee, establish claims to an inheritance. Providers compete based on contingency fee rates.

In December 2015, the Antitrust Division charged Brad Davis and the Brandenburger & Davis firm (headquartered in California) with conspiring to eliminate competition by agreeing to allocate customers in the heir location services industry. The government alleged that the Brandenburger & Davis defendants participated in the alleged conspiracy for nearly nine years, from November 2003 until August 2012. During that time, the conspirators agreed to pay a portion of the collected contingency fees to a rival that refrained from effective competition, it was charged. Shortly thereafter, Brad Davis and the Brandenburger & Davis firm agreed to plead guilty to the charges and to cooperate with the government in its ongoing probe of the heir location services industry and agreed to pay an $890,000 fine for their role in the alleged conspiracy.

As a result of the Justice Department’s probe, other firms and individuals were implicated and charged as well. In January 2016, Richard A. Blake Jr. was charged in the conspiracy and agreed to plead guilty in the federal district court in Chicago. Blake is awaiting sentencing, which is scheduled for October 5.

In August 2016, Kemp & Associates Inc. and its co-owner and vice president—Daniel J. Mannix—were charged by way of a one-count indictment, and these defendants allegedly participated in the customer allocation conspiracy from September 1999 until January 2014.

Sentencing memoranda. The Justice Department’s August 17, 2020, Sentencing Memorandum concerning Brad Davis requested that the court: "(1) include a four-level enhancement based on the defendant’s role as an organizer and leader of the criminal conspiracy charged in this case; (2) otherwise accept the remaining sentencing guidelines calculations recommended in the Presentence Investigative Report ("PSR"); (3) impose a sentence of 13 months incarceration, which is 72 percent of the low end of the guidelines’ incarceration range as calculated by the United States; (4) impose a criminal fine of $62,000; (5) order the defendant to pay the special assessment of $100; and (6) not order restitution."

In his August 24, 2020, Sentencing Memorandum in reply, Brad Davis emphasized that: (i) the probation office was recommending that "Davis receive a sentence of probation"; and (ii) Dan Mannix of Kemp & Associates, who also was charged "with a similar heir location ‘call-off’ conspiracy" that involved a different company, did not initially cooperate with the government, had a "similar sentencing guideline calculation," pleaded guilty "almost three years after being charged," and received "a sentence of probation on January 23, 2020." Accordingly, Brad Davis requested that the court "sentence him to probation, order no restitution as agreed with the government, order a fine of $20,000, and order a $100 special assessment."

In addition, in connection with the Brandenburger & Davis firm, the Justice Department’s August 17, 2020, Sentencing Memorandum recommended that the court "impose the sentence set forth in the Plea Agreement: (1) imposing a criminal fine in the amount of $890,000 payable in full within 15 days of the judgment; (2) ordering Brandenburger & Davis to pay the special assessment of $400; and (3) issuing no order of restitution." In its own August 24, 2020, Sentencing Memorandum in reply, the Brandenburger & Davis firm agreed with the Government’s recommendation.

Attorneys: Robert M. Jacobs, U.S. Department of Justice, for the United States. Matthew J. Cannon (Greenberg Traurig, LLP) for Bradley N. Davis. Laurel L. Headley (Arguedas, Cassman & Headley, LLP) for Brandenburger & Davis.

Companies: Brandenburger & Davis

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