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First Charges Brought in Nationwide Probe of Carpet Price Fixing

June 7, 1995

WASHINGTON (AP) _ A nationwide investigation of price fixing in the $9-billion-a-year carpet industry produced its first charges Wednesday _ against a Georgia company and its chief executive.

There were indications a plea bargain might be in the works.

Sunrise Carpet Industries Inc. of Chatsworth, Ga., and its chief executive officer and board chairman, Johnny A. West, were charged by the Justice Department’s antitrust division with conspiring with unnamed people to raise and fix the prices of carpets throughout the United States.

The charges were contained in two criminal informations that alleged violation of the Sherman Act and were filed in U.S. District Court in Atlanta, the department announced here.

Usually, the use of a criminal information rather than a grand jury indictment to bring federal charges indicates that the government has reached a plea bargain with a defendant who has agreed to plead guilty and cooperate.

But antitrust division spokeswoman Gina Talamona declined to comment on whether there was a plea bargain in this case. She said there were no court appearances scheduled for Wednesday in the case.

The government alleged the conspiracy began at least as early as October 1992 and continued through at least June 1993.

Sunrise produces popular low-priced carpet used in residential and commercial buildings. It is made of 20-ounce level-loop polypropylene.

Acting Assistant Attorney General Gary R. Spratling said the charges grew out of a grand jury investigation being conducted by the antitrust division’s Atlanta field office into collusion by carpet manufacturers. That investigation is continuing.

``Those who conspire to drive up the price of products can expect to face criminal charges,″ Spratling said.

The maximum Sherman Act penalty for a corporation is the greatest of a $10 million fine, twice the gross gain the company derived from the crime or twice the gross loss suffered by victims. For an individual, the top penalty is three years in prison and the greatest of a $350,000 fine, twice the gain derived or the loss inflicted by the crime.

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