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Poultry Execs Face Retrial in February
By Todd Neeley
Thursday, January 20, 2022 11:37AM CST

LINCOLN, Neb. (DTN) -- Ten poultry company executives accused of allegedly conspiring to fix broiler prices and rigging bids are set for a new trial on Feb. 22, after a jury failed to reach a verdict in December.

The criminal trial held in the U.S. District Court for the District of Colorado was the first after ongoing federal investigations into the poultry industry.

Standing trial are Jayson Penn, former president and CEO of Pilgrim's Pride; Roger Austin, former vice president of Fresh Foodservice at Pilgrim's Pride; Claxton Poultry Farms President Mikell Fries; Scott Brady, vice president of national accounts for Claxton Poultry Farms; along with other poultry company employees Jimmie Little, Timothy Mulrenin, William Kantola, William Lovette, Gary Roberts and Rickie Blake.

A grand jury indicted the employees back in June 2020.

According to court records, attorneys for the defendants asked for and were denied a request to move the trial back a month because of several reported scheduling conflicts.

The judge set a 22-day jury trial and a Feb. 10 hearing before the second trial begins.

Attorneys for the defendants filed motions for acquittal that were denied, arguing the mistrial showed there was insufficient evidence of a conspiracy.

Chief Judge Philip A. Brimmer said in a Jan. 14 order, however, there was evidence of a conspiracy.

"The testimony of government witness Robbie Bryant, a Pilgrim's Pride employee, is sufficient to support a finding beyond a reasonable doubt that a conspiracy existed between Pilgrim's, Koch Foods, Claxton Poultry, Tyson Foods, Mar-Jac Poultry, and George's Inc. to rig bids and fix prices," the judge said in his order.

"Mr. Bryant testified that he 'received competitor pricing and used that pricing to submit bids to customers and asked others to retrieve competitor pricing.' He also testified to obtaining competitors' bid pricing. He stated that the purpose of obtaining competitor pricing information 'was either to increase prices or limit a decrease in price.'"

The defendants were indicted on an alleged price-fixing scheme that goes back to at least 2012. The indictment points to repeated text communications among Austin, Brady and Fries regarding bids and prices for poultry contracts or overall market prices. The texts also repeatedly reference communications back to Penn. Those communications for bids on prices continued repeatedly until at least 2017.

The indictment also cited conversations over how to treat competitors who are short on product for delivery and competitors selling chicken products for lower margins. Penn noted in a series of emails regarding one unnamed competitor, "So in essence they are cheap and to add insult to injury are short product."

The indictment stated the business practices of the four executives "substantially affected interstate trade and commerce."

The DOJ filed the indictment with an antitrust class-action civil case in federal court in Illinois that was initially filed in 2016.

About 50% to 70% of broilers are sold under contract with a customer, about 10% to 20% are sold on the spot market, and roughly 17% to 20% are exported, according to the U.S. Poultry and Egg Association.

There are several other similar ongoing cases.

In July 2021, a federal grand jury in Denver handed down an indictment of Park Ridge, Illinois-based Koch Foods, as well as Pilgrim's Pride executives Jason McGuire, a former executive vice president of sales for prepared foods; Timothy Stiller, a former general manager of fresh food services and small bird de-bone; Wesley "Scott" Tucker, a national accounts sales executive; and Justin Gay, director of fresh food service sales.

The Denver court scheduled a 15-day trial starting on Oct. 31, 2022, according to a court order. A pre-trial court hearing is set for Sept. 30, 2022.

In February 2021, Pilgrim's Pride admitted to its role in a conspiracy to fix broiler chicken prices starting in 2012 and will pay a $107.9 million fine as part of a plea agreement entered in federal court.

The July 2021 indictment alleges the defendants conspired to suppress and eliminate competition for sales of broiler chicken products, which are chickens raised for human consumption and sold to grocers and restaurants.

Koch Senior Vice President William Kantola is among 10 people indicted in October 2020 for their roles in the alleged conspiracy. On May 19, 2021, a grand jury returned an indictment against Claxton Poultry for its role in the same alleged conspiracy.

Koch Foods, McGuire, Stiller, Tucker and Gay have been charged with a violation of the Sherman Antitrust Act, according to the indictment.

Violations of the Sherman Act carry a maximum penalty of 10 years in prison and a $1 million fine for individuals, $100 million fine for corporations.

Read more on DTN:

"Mistrial Declared in Poultry Exec Case," https://www.dtnpf.com/…

Todd Neeley can be reached at todd.neeley@dtn.com

Follow him on Twitter @DTNeeley

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