In the Courts

Eighth Circuit Affirms Longest Antitrust Sentences Ever Imposed

On April 27, 2012, the Eighth Circuit affirmed a 48-month prison sentence and $829,715.85 fine imposed upon Steven VandeBrake after he pleaded guilty to two counts of price fixing and one count of bid rigging in violation of 15 U.S.C. ' 1. United States v. VandeBrake, —F.3d —, 2012 WL 1448486 (April 27, 2012). The sentence was based on VandeBrake's role in a bid rigging conspiracy involving the sale of concrete products in Iowa, which was reported by a competitor in 2009 as part of the DOJ Antitrust Division's Leniency Program. *1. VandeBrake initially accepted a binding plea agreement that would have required him to serve 19 months in prison and pay a fine of $100,000 for his role in the conspiracy. *2. However, when the District Judge indicated that he was not inclined to accept the binding agreement, VandeBrake accepted a non-binding agreement. Id.

The District Judge ultimately imposed a 48-month sentence and $829,715.85 fine, representing a significant departure from the advisory sentencing guidelines and apparently the longest antitrust sentence ever imposed. Id. In support of this departure, the District Judge cited a policy disagreement with the United States Sentencing Guidelines (USSG) as well as VandeBrake's lack of remorse. In communicating its policy concerns, the district court focused on the fact that the offense levels for fraud violations under the USSG have increased far more rapidly than the offense levels for antitrust violations. According to the district court, the Sentencing Commission's stated reasons for this divergence (that the level of mark up from an antitrust violation may tend to decline with the volume of commerce involved) are without merit and are not borne out by the facts in the case against VandeBrake. Furthermore, the district court found that the guidelines fine range was “woefully inadequate” in this case, based on the losses involved as well as the need to impose a sufficiently punitive fine given VandeBrake's substantial personal wealth. *4.

On appeal, VandeBrake contended that the district court abused its discretion in not accepting the initial, binding plea agreement and, furthermore, that the prison sentence and fine imposed were substantively unreasonable. *5. The circuit court declined to consider VandeBrake's argument regarding acceptance of the initial plea agreement, holding that such claims were waived by his later unconditional guilty plea. With respect to the reasonableness of the sentence, the circuit court held that the district court appropriately based its decision “on the particular facts of an individual case,” in that the district court found that the Sentencing Commission's stated policy reasons for not increasing the offense level in line with the offense levels for fraud offenses did not apply in VandeBrake's case.

The circuit court affirmed the judgment, holding that both the prison sentence and the fine were based on appropriate consideration of sentencing factors and were substantively reasonable.

Eighth Circuit Affirms Longest Antitrust Sentences Ever Imposed

On April 27, 2012, the Eighth Circuit affirmed a 48-month prison sentence and $829,715.85 fine imposed upon Steven VandeBrake after he pleaded guilty to two counts of price fixing and one count of bid rigging in violation of 15 U.S.C. ' 1. United States v. VandeBrake, —F.3d —, 2012 WL 1448486 (April 27, 2012). The sentence was based on VandeBrake's role in a bid rigging conspiracy involving the sale of concrete products in Iowa, which was reported by a competitor in 2009 as part of the DOJ Antitrust Division's Leniency Program. *1. VandeBrake initially accepted a binding plea agreement that would have required him to serve 19 months in prison and pay a fine of $100,000 for his role in the conspiracy. *2. However, when the District Judge indicated that he was not inclined to accept the binding agreement, VandeBrake accepted a non-binding agreement. Id.

The District Judge ultimately imposed a 48-month sentence and $829,715.85 fine, representing a significant departure from the advisory sentencing guidelines and apparently the longest antitrust sentence ever imposed. Id. In support of this departure, the District Judge cited a policy disagreement with the United States Sentencing Guidelines (USSG) as well as VandeBrake's lack of remorse. In communicating its policy concerns, the district court focused on the fact that the offense levels for fraud violations under the USSG have increased far more rapidly than the offense levels for antitrust violations. According to the district court, the Sentencing Commission's stated reasons for this divergence (that the level of mark up from an antitrust violation may tend to decline with the volume of commerce involved) are without merit and are not borne out by the facts in the case against VandeBrake. Furthermore, the district court found that the guidelines fine range was “woefully inadequate” in this case, based on the losses involved as well as the need to impose a sufficiently punitive fine given VandeBrake's substantial personal wealth. *4.

On appeal, VandeBrake contended that the district court abused its discretion in not accepting the initial, binding plea agreement and, furthermore, that the prison sentence and fine imposed were substantively unreasonable. *5. The circuit court declined to consider VandeBrake's argument regarding acceptance of the initial plea agreement, holding that such claims were waived by his later unconditional guilty plea. With respect to the reasonableness of the sentence, the circuit court held that the district court appropriately based its decision “on the particular facts of an individual case,” in that the district court found that the Sentencing Commission's stated policy reasons for not increasing the offense level in line with the offense levels for fraud offenses did not apply in VandeBrake's case.

The circuit court affirmed the judgment, holding that both the prison sentence and the fine were based on appropriate consideration of sentencing factors and were substantively reasonable.