Toyota Parts Price-Fixing: Two Japanese Execs Indicted

TOLEDO, OH – A Cleveland federal grand jury has slapped indictments on two executives of a Japanese automotive supplier for their roles in a long-running conspiracy to rig the prices of crucial anti-vibration rubber parts sold to Toyota. The Department of Justice announced the charges today, alleging a deliberate scheme to squeeze profits at the expense of American consumers.

Masao Hayashi and Kenya Nonoyama, both Japanese nationals, stand accused of conspiring to suppress competition by allocating supply, rigging bids, and artificially inflating the prices of these parts – engine mounts and suspension bushings – installed in vehicles sold in the U.S. and beyond. The indictment, filed in U.S. District Court for the Northern District of Ohio, details a scheme impacting popular Toyota models including the Corolla, Avalon, Tacoma, Camry, Tundra, Sequoia, Rav4, Sienna, Venza and Highlander.

Federal investigators claim the conspiracy stretched from as early as March 1996 until at least December 2008, with Hayashi and Nonoyama allegedly participating in clandestine meetings and communications within Japan to hammer out collusive agreements. These weren’t isolated incidents; the indictment paints a picture of a systematic effort to manipulate the market and control pricing for a key component in millions of vehicles.

“Today’s indictment reaffirms the Antitrust Division’s commitment to hold executives accountable for actions that corrupt the competitive landscape and harm consumers,” stated Renata B. Hesse, Deputy Assistant Attorney General for the Department of Justice’s Antitrust Division. “The Antitrust Division continues to work closely with its fellow competition enforcers abroad to ensure that there are no safe harbors for executives who engage in international cartel crimes.”

If convicted, Hayashi and Nonoyama each face a maximum penalty of 10 years in prison and a $1 million criminal fine under the Sherman Act. However, the potential financial repercussions could be far greater, with fines potentially escalating to twice the profits gained from the illegal scheme or twice the losses suffered by Toyota and ultimately, consumers.

This case is part of a larger, ongoing federal antitrust investigation into price-fixing and bid-rigging within the automotive parts industry. To date, 21 companies and 26 executives have been charged, with over $1.6 billion in criminal fines already secured and seventeen executives either serving prison time or having entered plea agreements with significant prison sentences attached. The investigation is a joint effort between the Antitrust Division’s Chicago Office and the FBI’s Cleveland Field Office, with assistance from the FBI headquarters’ International Corruption Unit and the U.S. Attorney’s Office for the Northern District of Ohio. Anyone with information related to automotive parts price-fixing is urged to contact the Antitrust Division’s Citizen Complaint Center at (888) 647–3258 or visit www.justice.gov/atr/contact/newcase.html. The FBI’s Cleveland Field Office can also be reached at (216) 522-1400.