By Jeffrey May, J.D.
First criminal antitrust case filing of 2019 continues probe of online promotional products industry.
During the partial government shutdown last week, the Department of Justice Antitrust Division were busy filing the first criminal antitrust case of 2019. The charge against Netbrands Media Corp. is the latest in a string of actions against promotional product companies and their executives for conspiring to fix prices. On January 24, the government filed a one-count charge against Netbrands Media in the federal district court in Houston (U.S. v. Netbrands Media Corp., Case 4:19-cr-00065).
This latest action follows plea agreements from the company’s owner/chief executive officer and its owner/chief operator officer. Netbrands Media is an online retail company that sells customized silicone and vinyl wristbands, as well as other promotional products. Earlier this month, Mashnoon Ahmed and Mueen Akhteran both agreed to fines and to serve prison time for their role in the conspiracy. Sentencing is set for March.
Like the company officers/owners, Netbrands was charged with engaging in the challenged conduct between May 2014 and June 2016. The Texas-based company operates the website 24HOURWRISTBANDS.COM. The government identifies customized promotional products as wristbands, lanyards, temporary tattoos, and buttons.
Long-running investigation. Netbrands is the fourth company to be charged as a result of the long-running antitrust investigation. E-commerce company 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. The executive’s sentencing is set for April 2019. 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. In November 2018, charges were filed naming another player in the online promotional products industry, Gennex Media d/b/a Brandnex.com and PMGOA, as well as the company's owner.
Companies: Gennex Media LLC; Custom Wristbands Inc.; Netbrands Media Corp; Zaappaaz Inc.
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