SAN JUAN, Puerto Rico – A former executive of a steel distributor in San Juan, Puerto Rico, pleaded guilty today to conspiring with competitors to fix prices for sales of reinforcing bar, or rebar.
According to court documents filed in the US District Court in San Juan, Juan Carlos Aponte Tolentino (Aponte), of Bayamon, Puerto Rico, was interim president of a steel distributor in Puerto Rico. The company was one of the leading wholesale distributors of rebar in Puerto Rico. Rebar is commonly required for residential and commercial construction projects on the island, and nearly all rebar distributed in Puerto Rico is imported from other countries or the continental US. Collectively, Aponte’s company and two other competitors controlled approximately 70 percent of the wholesale rebar market in the Commonwealth.
Between 2015 and 2022, including the period of reconstruction following hurricanes Irma and Maria in September 2017, Aponte conspired with competing companies and individuals to suppress and eliminate competition by fixing prices for steel products, including rebar, which were distributed to hardware stores, building contractors and other businesses and individuals in Puerto Rico, resulting in substantial profits to the conspirators.
Among other communications, Aponte and his competitors exchanged WhatsApp chat messages in which they agreed on specific rebar prices, including price increases. For example, in December 2020 an executive at a competing company sent Aponte a chat message with the price of Turkish rebar, and Aponte responded, “The position is the following: Platform $33.95, 10 bundles $34.50, Fewer than 10 bundles: $34.95” before asking, “The question is are we on the same page?” The competing executive responded, “Yes, that is what I am doing.”
In the plea agreement filed today, Aponte admitted that more than $100 million in sales by his company were affected by the conspiracy.
“In pleading guilty, this defendant admitted to fixing prices – for nearly a decade – on rebar, an essential part of the supply chain for the reconstruction of Puerto Rico following the 2017 hurricanes,” said deputy assistant attorney general Manish Kumar of the Justice Department’s Antitrust Division. “This guilty plea demonstrates the Antitrust Division’s continued commitment to holding accountable individuals who collude to raise construction prices and harm consumers and businesses in Puerto Rico. We and our law enforcement partners will continue to prosecute the people responsible for this type of anticompetitive criminal conduct.”
“We are satisfied with the outcome in this case as it sends a clear message that price-fixing and taking advantage of communities in crisis will not be tolerated,” said Special Agent in Charge Joseph Gonzalez of the FBI San Juan Field Office. “In the FBI, we remain committed to disrupting this illegal practice and bringing justice for all those affected by such unethical practices.”
Violating the Sherman Act, which is a federal criminal antitrust statute, is a felony. The maximum penalty for individuals convicted of violating the Sherman Act is 10 years in prison and a $1 million criminal fine. The maximum penalty for corporations is a $100 million criminal fine. The fine may be increased to twice the gain derived from the crime or twice the loss suffered by the victims of the crime if either amount is greater than the statutory maximum fine.
The court set Aponte’s sentencing hearing for November 8. A federal district court judge will determine any sentence after considering the US. Sentencing Guidelines and other statutory factors.
The Antitrust Division’s Washington Criminal Section investigated the case, with the assistance of the FBI San Juan Field Office.
Trial attorneys April Ayers-Perez, Alison Friberg and Taylor Bernhardt of the Washington Criminal Section, and senior litigation counsel John Davis of the Antitrust Division’s Litigation Program, are prosecuting the case.
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