Conspiracy, false statements convictions stand

The 7th Circuit Court of Appeals has affirmed the convictions of participating in a price-fixing conspiracy and making false statements to federal law enforcement of an Indianapolis man involved in a concrete price-fixing scheme.

In United States of America v. Christopher A. Beaver, No. 07-1381, Beaver appealed his convictions, arguing the government failed to prove at trial a price-fixing conspiracy existed, that he joined the conspiracy, or that he made false statements.

Beaver, as operations manager of Beaver Materials Corp., was one of several Indianapolis-area ready-made concrete producers who collaborated in the beginning of the decade to fix the prices of concrete. Representatives from the five concrete companies met several times over the course of a few years in a horse barn in Fishers to discuss the falling market value of concrete. No one ever voted on the prices to charge customers, objected to the price-fixing, nor did anyone refuse to impose the limit. In fact, some even stated they would confront a company involved in the scheme if they did not follow the prices.

Beaver began attending the meetings in the place of another Beaver Materials employee and never objected to the scheme.

The FBI received a tip about the scheme and executed search warrants on the five companies in 2004. All the companies and those involved with the scheme except for Beaver and Beaver Materials admitted their roles in the conspiracy and entered into plea agreements. Four representatives from those companies agreed to help the government investigate and said they would answer truthfully at trial if called.

Beaver told the FBI agent that he never attended any meetings in the horse barn, did not know of another employee who attended the meetings, never saw the other companies except at an annual meeting, and denied any price-fixing. Beaver chose to go to trial and was indicted by a federal grand jury of participating in a price-fixing conspiracy and making false statements to a federal law enforcement agent. At trial, Beaver filed a motion for judgment of acquittal, challenging the evidence supporting his price-fixing conspiracy conviction; the District Court denied the motion.

Beaver appealed, arguing that the District Court erred by denying his motion for judgment of acquittal because the government failed to prove a conspiracy existed or that he participated. He also challenged his false-statements conviction by asserting the government failed to prove the lies he told the FBI agent were material as “a matter of law.”

To be convicted of conspiracy under the Sherman Antitrust Act, the government only had to establish the concrete producers had a “tacit understanding based upon a long course of conduct” to limit their discounts and fix prices, wrote Judge Michael Kanne. The concrete makers held meetings to discuss fixing prices and discounts and no one disagreed with the proposals. The concrete producers also would enforce the agreement against those they believed were deviating from it. At trial, several concrete-makers involved in the conspiracy testified Beaver attended the meetings, participated in discussions to limit prices, and agreed to confront other members if they failed to conform. Even his own father, who was president of the company, testified he knew Beaver attended the meetings.

Beaver mischaracterized the issue of his false statements as “a matter of law,” wrote Judge Kanne, and the materiality of false statements is a factual determination made by a jury. The federal appellate court rejected Beaver’s assertion his false statements couldn’t influence the FBI’s investigation because his attorney sent a letter to the Department of Justice several days later to inform them that one of the employees lied during the investigation. However, the letter doesn’t give the name of the employee, so it is not know whom the letter is about. Also, Beaver is incorrect in thinking he can avoid a conviction by correcting a false statement days after making it. His false statements could have hindered the FBI’s investigation, so the appellate court sees no fault with the jury convicting Beaver of providing false statements.