DENVER – A federal grand jury returned an indictment against Norman W. Fries Inc., doing business as Claxton Poultry Farms, on charges of participating in a nationwide conspiracy to fix prices and rig bids for broiler chicken products, the US Department of Justice (DOJ) said.
In June 2020, Mikell Fries, president of Claxton Poultry, and Scott Brady, vice president of national accounts at the company, were indicted along with Jayson Penn, former chief executive officer of Pilgrim’s Pride, and Roger Austin, vice president of fresh foodservice at Pilgrim’s Pride Corp., for their alleged role in the conspiracy to fix prices for broiler chickens. Fries and Brady are among 10 individuals charged in a superseding indictment in October 2020 for their roles in the conspiracy.
The indictment states that Claxton participated in a network of suppliers and co-conspirators whose understood purpose “...was to suppress and eliminate competition through rigging bids and fixing prices and price-related terms for broiler chicken products sold in the United States.”
The company also is accused of reaching agreements and understandings to submit aligned — but not necessarily identical — bids, prices and price-related terms, including discount levels, for broiler chickens.
Additionally, the indictment accuses Claxton of participating in conversations and communications relating to non-public information including bids, prices, and price-related terms for chickens "...with the shared understanding that the purpose of the conversations and communications was to rig bids, and to fix, maintain, stabilize, and raise prices and other price-related terms" for broiler chicken products.
Claxton also discussed protecting and acting to protect the conspiracy, according to the indictment. The conspiracy was in effect from at least as early as 2012 until at least 2019, according to the court documents.
“As this charge shows, we will not hesitate to prosecute crimes designed to put money in corporate coffers and line executives’ pockets at the expense of everyday Americans, including the hundreds of millions of us who rely on chicken to be an affordable staple food,” said Acting Assistant Attorney General Richard A. Powers of the DOJ’s Antitrust Division. “Alongside our valued law enforcement partners and colleagues at the District of Colorado US Attorney’s Office, we will not stop until integrity is restored to this vital market and all wrongdoers are held to account.”
If convicted, the company faces a statutory maximum fine for corporations of $100 million which may be increased to twice the gain derived from the crime or twice the loss suffered by victims, if either of those amounts is greater than the statutory maximum fine, the DOJ said.
Pilgrim’s Pride pleaded guilty and was sentenced in February 2021 to pay a criminal fine of more than $107 million for its role in the conspiracy.
Pilgrim’s and Tyson Foods, Inc. both have agreed to pay millions to settle civil lawsuits filed by direct purchasers — foodservice, institutional and retail poultry buyers.