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WASHINGTON -- A federal grand jury in Phoenix has returned an indictment charging a former manager at a commercial refrigeration company with participating in a conspiracy to rig bids on contracts for the installation of equipment in Safeway grocery stores in the Phoenix metropolitan area.
The indictment, filed yesterday in the United States District Court in Phoenix, charged that James Govostes participated with unnamed co-conspirators in the bid rigging, which took place beginning around January 2005, and continuing until May 16, 2005. During the period, Govostes served as a regional manager for a commercial refrigeration company that served the Phoenix metropolitan area. A press release on the indictment did not name the company. (Story continues below.)
This is the first charge as a result of the Department of Justice's ongoing antitrust investigation into the commercial refrigeration industry. "The Antitrust Division is committed to prosecuting those who damage the integrity of the free market by conspiring to rig bids," said Thomas O. Barnett, assistant attorney general in charge of the Antitrust Division.
The indictment charges that Govostes and his co-conspirators engaged in the following actions involving commercial refrigeration installation projects at Safeway grocery stores:
-- Discussed among themselves the submission of bids,
-- Agreed to allocate bids among themselves according to which company had a maintenance agreement in place at a particular grocery store,
-- Solicited other individuals to join and facilitate the conspiracy,
-- Designated which company would submit the low bid and submitted a rigged bid, and
-- Accepted payment from Safeway for work done as a result of the conspiracy.
Govostes is charged with bid rigging in violation of the Sherman Act and, if convicted, could receive a fine of up to $1 million and up to 10 years in prison.