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The Litigator
AGM :: Affleck Greene McMurtry LLP

THE LITIGATOR

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Canadian businessman extradited to US on fraud and bid rigging charges

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The US alleges that Bennett was involved in paying bribes and kick-backs

Canadian businessman John Bennett appeared in a US court last week after his extradition to the US to face bid-rigging, fraud, conspiracy, and kick-back charges.

The charges stem from a bid by the company he founded, Inc., to work on an environmental cleanup project in New Jersey. 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 .

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 in February 2010. Mr. Bennett fought his extradition for four years, finally losing in the BC Court of Appeal in May 2014. The court held that his defence, which is that he was not involved in the scheme, was a matter for trial.

Mr. Bennett becomes the first Canadian ever extradited to the US to face antitrust charges. He 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.

 

W. Michael G. Osborne
Affleck Greene McMurtry LLP

W. Michael G. Osborne

Michael Osborne is a former Partner of Affleck Greene McMurtry LLP

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