- The Washington Times - Wednesday, October 18, 2006

A federal grand jury in San Francisco yesterday indicted two executives from Samsung Electronics Ltd. and another from Hynix Semiconductor America Inc. on charges of a global conspiracy to fix prices on a memory product used in everything from laptops to video-game consoles, Justice Department officials said.

Each of the three executives is charged with participating in a conspiracy to suppress competition in the multibillion-dollar dynamic random access memory (DRAM) industry in violation of the Sherman Antitrust Act.

“The Antitrust Division will vigorously pursue individuals who engage in criminal cartel conspiracies,” said Assistant Attorney General Thomas O. Barnett, who heads the division.

“Criminal cartel enforcement is the division’s top priority, and both companies and individuals must comply with the antitrust laws.”

The indictment, filed in U.S. District Court in San Francisco, charged that Il-ung Kim and Young-bae Rha, both of Samsung, and Gary Swanson participated with co-conspirators in the scheme from April 2001 until June 2002. At the time, according to the document, Mr. Kim was vice president of marketing and Mr. Rha was vice president of sales and marketing.

Both men are citizens and residents of South Korea.

The indictment said that at the time of the conspiracy, Mr. Swanson was a senior vice president at Hynix America, the U.S.-based subsidiary of Hynix Semiconductor Inc., with headquarters in South Korea. Mr. Swanson is a U.S. citizen.

To date, four companies and 16 persons have been charged and fines totaling more than $731 million have resulted from the department’s antitrust investigation into the DRAM semiconductor industry.

DRAM is the most commonly used semiconductor memory product, providing high-speed storage and retrieval of electronic information for a variety of computer, telecommunication and consumer electronic products. DRAM sales in the United States in 2004 totaled about $7.7 billion.

The three executives face maximum penalties of three years’ imprisonment and fines of $350,000, although department officials said the maximum fines may be increased to twice the gain derived from the crime or twice the loss suffered by the victims if either of those amounts is greater than the maximum fines under the Sherman Act .

Three foreign-based Samsung executives pleaded guilty to the DRAM price-fixing conspiracy in March and August and agreed to serve prison terms ranging from seven to eight months and to each pay a $250,000 fine. In September, a fourth Samsung executive agreed to plead guilty to the DRAM price-fixing conspiracy, serve eight months in prison and pay a $250,000 fine.

In addition, four Hynix Semiconductor executives agreed to plead guilty and serve jail terms ranging from five to eight months and pay $250,000 fines.

Samsung pleaded guilty to the price-fixing conspiracy and paid a $300 million criminal fine in November. Hynix pleaded guilty and paid a $185 million fine in May 2005.

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