A federal grand jury in Detroit on Tuesday returned an indictment against the former president and CEO of a Whirlpool Corporation subsidiary for his role in an international conspiracy to fix the prices of refrigerant compressors used in refrigerators and freezers in homes and businesses, the Department of Justice announced.
The indictment was returned against Ernesto Heinzelmann, former president and CEO of Embraco North America, Inc., a division of Whirlpool, along with two other former executives from Panasonic Corporation and the Brasil company Tecumseh.
The three executives are all accused of conspiring to suppress and eliminate competition by coordinating prices increases for refrigerant compressors to customers in the U.S. and elsewhere dating from October 2004 to December 2007.
The former company executives are the first charged in the ongoing investigation into the worldwide refrigerant compressor market. The compressors take low-pressure refrigerant, compress it and then pump out a high-pressure vapor, which condenses and then cools refrigerators and freezers.
"Cracking down on international price fixing cartels has been and will continue to be among the most significant priorities for the Antitrust Division," said Sharis A. Pozen, acting assistant attorney general in charge of the Department of Justice's Antitrust Division. "Our investigation into the refrigerant compressors industry has already resulted in two companies - Panasonic and Embraco North America - pleading guilty and paying a total of $140.9 million in criminal fines."
The Whirlpool subsidiary Embraco plead guilty and was sentenced to pay a $91.8 million criminal fine. Panasonic paid a $49.1 million criminal fine.
The executives are charged with price fixing in violation of the Sherman Act, which carries a maximum penalty of 10 years in prison and a $1 million fine for the individuals. The maximum fine my be increased to twice the gain derived from the crime or twice the loss suffered by the victims of the crime, if either of those amounts is greater than the statutory maximum fine.
Whirlpool operates a refrigerator manufacturing operation in Amana, Iowa, that was previously owned by Maytag.