Four executives at German chipmaker Infineon were jailed today on charges of engaging in illegal price fixing of PC memory chips according to the US Department of Justice.
The sales execs pled guilty to working with co-conspirators in other companies to artificially set the price of the memory chips, thus resulting in inflated profits for their companies. The co-conspirators were not named and have not been charged.
Two of the executives worked at Infineon’s headquarters in Munich. Heinrich Florian, Infineon´s vice-president for sales, marketing, and logistics and vice-president for marketing and logistics during 2001 and 2002, will serve a six-month prison sentence and pay a $250,000 (Ј129,295) fine.
The VP of Sales for memory products, Gunter Hefner will spend five months in prison and pay a $250,000 fine for his role in the scheme during that period.
The other executives worked at Infineon’s California office. VP of marketing, sales and logistics Peter Schaefer will serve a four-month prison sentence for his role in the conspiracy. VP of customer marketing and sales of memory products T Rudd Corwin will serve a four-month sentence for price-fixing activities during those years. Both will also pay a $250,000 fine.
The DOJ has been investigating allegations of price setting on Dram since early 2002. Infineon itself pled guilty to corporate price fixing earlier in the year and has agreed to pay a $160M fine.
“These four executives are the first to plead guilty to a charge of fixing prices in what is still a very active and far-reaching investigation into anti-trust violations in the DRam industry,” said Scott Hammond, the DOJ´s director of criminal enforcement in the anti-trust division.
Infineon intends to continue working closely with investigators to ensure that this never happens again. A move consumers wholeheartedly welcome.