Former Puerto Rican Steel Executive Pleads Guilty to Price-Fixing Conspiracy

A former high-ranking executive of a leading steel distributor in Puerto Rico pleaded guilty today to participating in a long-running conspiracy to fix prices for reinforcing bar (rebar) sold across the island, according to a statement released by the U.S. Department of Justice.

Juan Carlos Aponte Tolentino, a resident of Bayamon, Puerto Rico, served as the Interim President of a prominent steel distribution company, which, along with two other competitors, controlled approximately 70% of the wholesale rebar market in Puerto Rico. Rebar, a crucial material used in both residential and commercial construction projects on the island, is predominantly imported from the continental United States or other countries.

Per court documents filed in the U.S. District Court in San Juan, Aponte admitted to conspiring with other companies and individuals to suppress competition by fixing prices for rebar and other steel products between 2015 and 2022. This period notably includes the critical reconstruction phase following Hurricanes Irma and Maria in September 2017. The price-fixing scheme targeted hardware stores, building contractors, and other businesses, yielding substantial profits for the conspirators.

According to the plea agreement, Aponte and his competitors frequently communicated through WhatsApp, exchanging messages to coordinate pricing strategies. In one instance in December 2020, an executive from a rival company sent Aponte a message with the price of Turkish rebar. Aponte responded by detailing specific prices for different quantities and asked, “The question is are we on the same page?” The rival executive confirmed, “Yes, that is what I am doing.”

Read more: Japan Investigates Nissin Food Products for Price-Fixing

Aponte acknowledged that the conspiracy affected over $100 million in sales by his company, per the statement.

Deputy Assistant Attorney General Manish Kumar of the Justice Department’s Antitrust Division commented on the plea, stating, “In pleading guilty, this defendant admitted to fixing prices — for nearly a decade — on rebar, an essential part of the supply chain for the reconstruction of Puerto Rico following the 2017 hurricanes. This guilty plea demonstrates the Antitrust Division’s continued commitment to holding accountable individuals who collude to raise construction prices and harm consumers and businesses in Puerto Rico. We and our law enforcement partners will continue to prosecute the people responsible for this type of anticompetitive criminal conduct.”

Special Agent in Charge Joseph Gonzalez of the FBI San Juan Field Office also praised the outcome, noting that it “sends a clear message that price-fixing and taking advantage of communities in crisis will not be tolerated.” He further emphasized the FBI’s commitment to “disrupting this illegal practice and bringing justice for all those affected by such unethical practices.”

Violations of the Sherman Act, a federal criminal antitrust statute, are classified as felonies. Individuals convicted under this act face a maximum penalty of 10 years in prison and a $1 million criminal fine. Corporations could be fined up to $100 million.

Source: Justice Gov