US Obtains First Ever Extradition from Canada on Antitrust Charges
May 13th, 2014
Canadian businessman John Bennett will be extradited to the US face bid-rigging, fraud, conspiracy, and kick-back charges, the BC Court of Appeal held recently.
The charges stem from a bid by the company he founded, Bennett Environmental Inc., to work on an environmental cleanup project in New Jersey. Bennett Environmental was an environmental soil remediation company. Beginning in 2001, it won a series of contracts to remediate soils at a major environmental cleanup in the US known as the Federal Creosote site.
An investigation by the US Justice Department’s Antitrust Division revealed that bidders on the project, including Bennett Environmental, had conspired in the bidding process, fraudulently inflated the price of certain subcontracts, and paid kick-backs.
In 2008, Bennett Environmental pleaded guilty to one count of conspiracy to defraud the US Environmental Protection Agency and was fined $1 million. Two of its executives have also pleaded guilty. In in 2011, one of them was sentenced to serve 50 months in a US jail, after pleading guilty to participating in fraud and money laundering conspiracies (see article).
The former project manager, Gordon McDonald, who participated in the scheme and received the kick-backs, was convicted in September 2013, and sentenced in March 2014 to 14 years in prison. This is the longest ever sentence ever imposed in the US for an antitrust crime.
Mr. Bennett was the chairman of the board and chief executive officer of Bennett Environmental at the time it won the Federal Creosote contract. In 2009, he was indicted by a Grand Jury on charges that he orchestrated the bid-rigging, kick-backs, and other offences. The US applied for extradition in February 2010. Mr. Bennett has been fighting extradition ever since. At his committal hearing, he attempted to lead evidence suggesting that he was not involved in the scheme and sought to force two former Bennett Environmental executives to testify. The judge rejected this and ordered him committed for extradition.
Mr. Bennett appealed. The BC Court of Appeal dismissed his appeal, holding that the evidence he sought to introduce did not undermine the evidence tendered by the US in its Certified Record of the Case for Prosecution. Rather, his evidence related to potential defences to the charges. These are matters for the trial, the court held.
In addition to being the first Canadian ever extradited to the US to face antitrust charges, Mr Bennett is also only the second person ever extradited to the US to face antitrust charges. In April 2014, a former executive of a rubber hose manufacturer was extradited from Germany after the first ever contested extradition on antitrust charges.