By Matt Mackinder
Clarkston News Editor
A business executive with a Clarkston-based business pleaded guilty to breaking federal trade laws recently and will pay the price, literally.
Last week, Kevin Shell, an executive with Clarkston-based F. Allied Construction Co. Inc., a Michigan paving and excavating contractor, pleaded guilty to two counts of conspiracy to restrain trade.
Shell and company president Andrew Foster are also charged in a federal bid-rigging case that state officials say resulted from a wider asphalt paving sector investigation.
Shell, vice president of estimating for Allied, conspired with Foster and two other contractors and their employees to rig bids for asphalt paving services between June 2013 and June 2019 and then in separate cases from July 2017 through May 2021, the U.S. Department of Justice Antitrust Division announced in court filings.
Prosecutors did not name the other contractors alleged to have been involved in the bid rigging.
“These bids gave customers the false impression of competition when, in fact, the co-conspirators had already decided among themselves who would win the contracts,” a department news release said.
Shell, who pleaded guilty on Aug. 17 before a federal judge in Detroit, will be sentenced Nov. 30. A plea hearing for Foster was scheduled for yesterday, Aug. 29. Shell faces a sentence of up to 10 years in prison and fine of up to $1 million on each count. If Foster is convicted, he could face a similar sentence.
According to prosecutors, the predetermined “losing” companies would submit intentionally low bids to give project owners the false impression of competition for the jobs.
The Justice Department conducted the investigation with the U.S. Department of Transportation and U.S. Postal Service as part of an ongoing probe into anticompetitive conduct in the asphalt paving sector, officials said in a press release.
“Our economic vitality depends on a fair and competitive bidding process to construct, and maintain, America’s infrastructure,” said Jonathan Kanter, assistant attorney general of the Antitrust Division, in a statement.
Allied itself faces criminal fines of up to $100 million per count if convicted. Shell pleaded guilty to two counts of violating Section One of the Sherman Act, authorities said. The maximum penalty for such a violation is 10 years in prison and a $1 million fine for individuals and a $100 million fine for corporations. The fine may be increased to twice the gain accrued from the crime or twice the loss suffered by the victims if either amount is greater than the statutory maximum, according to statements.
If anyone has information related to the investigation, call 888-647-3258 or visit www.justice.gov/atr/report-violations.