Four Korean executives to serve
U.S. jail sentences for price fixing

By Julia Cheever, Bay City News Service

March 1, 2006

SAN FRANCISCO (BCN) - The U.S. Justice Department announced today that four executives of a Korean semiconductor company have agreed to plead guilty in federal court in San Francisco and serve jail sentences in the United States in an international price-fixing case.

In connection with the agreement, federal prosecutors filed a single criminal charge of price-fixing conspiracy against the four executives of Hynix Semiconductor Inc. in U.S. District Court in San Francisco today.

The four managers, who worked for Hynix subsidiaries in the United States and Germany, will serve sentences of five to eight months in jail under the plea agreement.

The case is part of an ongoing U.S. investigation of international fixing of the prices of memory chips known as dynamic random access memory, or DRAM, between 1999 and 2002.

Thus far, four companies from South Korea, Japan and Germany and five other individuals have pleaded guilty to various charges and agreed to pay fines totaling more than $731 million.

Hynix, based in Ichon, South Korea, pleaded guilty in federal court in San Francisco last year to conspiring to fix DRAM prices and agreed to pay a $185 million fine.

The four Hynix executives each agreed to pay a $250,000 fine and cooperate in the continuing investigation in addition to serving the jail time.

DRAM chips are used in many electronic devices, including computers, printers, servers, hard disk drives, telephones, mobile phones and digital cameras.

The criminal charges filed in the various cases alleged that U.S. computer companies victimized by the price fixing included Dell Inc., Compaq Computer Corp., Hewlett-Packard Co., Apple Computer Inc. and International Business Machines Corp.

Assistant U.S. Attorney General Thomas Barnett, who heads the Justice Department's antitrust division, said, "Prison time for price fixers is the most potent deterrent to illegal cartel activity."

Barnett said, "These guilty pleas demonstrate our commitment to ensuring that participants in cartels serve time in prison."

The guilty pleas and proposed sentences must be approved by a federal judge, the Justice Department said.

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