SAMSUNG EXECS GO TO JAIL

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Samsung execs go to jail
Three executives from Samsung Electronics, the world’s largest manufacturer of DRAM (dynamic random access memory), have agreed to plead guilty and serve jail time for participating in a worldwide conspiracy to fix DRAM prices, the US Department of Justice (DOJ) announced Wednesday.
Sun Woo Lee, Samsung’s senior manager of DRAM sales, agreed to a sentence of eight months in US prison. Yeongho Kang, associate director of DRAM marketing for Samsung’s US subsidiary, and Young Woo Lee, sales director for Samsung’s German subsidiary, both agreed to serve seven months, the DOJ said.
The three also agreed to each pay a $250,000 fine and cooperate with the DOJ’s ongoing DRAM investigation. The South Korean executives each face one felony count for violating the US Sherman Antitrust Act.
“True deterrence occurs when guilty individuals serve jail terms, and not just when corporations pay criminal fines,” US Attorney General Alberto Gonzales said in a statement. “These pleas should send a clear message that we will hold accountable all conspirators, whether domestic or foreign, that harm American consumers through their illegal conduct.”
The pleas and sentences are subject to the approval by the US District Court in San Francisco. The Samsung three will follow four Infineon execs who were jailed in December 2004 for taking part in the same price-fixing conspiracy.
DRAM is the most commonly used semiconductor memory product, and is used in PCs, laptops, servers, printers, hard disk drives, mobile phones, digital cameras, game consoles, and other devices. There were about $7.7 billion in DRAM sales in the U.S. in 2004, the DOJ said.
Between April 1999 and June 2002, the three Samsung executives conspired with employees of other DRAM makers to fix prices, according to the charges filed Wednesday. The conspiracy affected sales to several US computer makers, including Dell, Hewlett-Packard, IBM, and Apple.
Including Wednesday’s charges, the DOJ has charged four companies and 12 individuals and assessed fines of more than $731 million in a wide-ranging DRAM price-fixing investigation. This adds up to the second largest total ever collected by the DOJ in a single price-fixing investigation.
The first charges in the investigation came in December 2003, and earlier this month, four executives from Hynix Semiconductor Inc. agreed to plead guilty.
Samsung was ordered in November 2005 to pay a $300 million criminal fine. Hynix, the world’s second-largest DRAM manufacturer, was ordered to pay $185 million in May 2005. Elpida Memory of Japan agreed in January to pay $84 million. And Infineon of Germany agreed in October 2004 to pay $160 million.
Samsung itself was fined $300 million in December 2005, and Hynix was fined $185 million in April last year.

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March 28, 2006 at 11:16 AM