U.S. v. Anderson, 02-13168.

• Decision Date: 11 April 2003
• Docket Number: No. 02-13168.,02-13168.
• Citation: 326 F.3d 1319
• Parties: UNITED STATES of America, Plaintiff-Appellee, v. Elmore Roy ANDERSON, Defendant-Appellant.
• Court: U.S. Court of Appeals — Eleventh Circuit

Page 1319

326 F.3d 1319

UNITED STATES of America, Plaintiff-Appellee, v. Elmore Roy ANDERSON, Defendant-Appellant.

No. 02-13168.

United States Court of Appeals, Eleventh Circuit.

April 11, 2003.

COPYRIGHT MATERIAL OMITTED

Charles C. Murphy, Jr., Vaughan & Murphy, Atlanta, GA, Anthony Aaron Joseph, Johnston, Barton, Proctor & Powell

LLP, Birmingham, AL, for Defendant-Appellant.

John J. Powers, III, Steven J. Mintz, Dept. of Justice, Antitrust Div., Washington, DC, for Plaintiff-Appellee.

Appeal from the United States District Court for the Northern District of Alabama.

Before DUBINA and BLACK, Circuit Judges, and RYSKAMP^*, District Judge.

RYSKAMP, District Judge:

Appellant-defendant Elmore Roy Anderson ("Anderson") appeals his convictions for various violations of federal law. For the reasons that follow, we affirm but remand for further sentencing by the district court.

I. STATEMENT OF THE CASE

A. Procedural Background

On July 25, 2001, a grand jury indicted Anderson and two corporate defendants, Bill Harbert International Construction, Inc. ("BHIC") and Bilhar International Establishment f/k/a Harbert International Establishment ("Bilhar"), for conspiracy to violate § 1 of the Sherman Antitrust Act, 15 U.S.C. § 1 (Count One) and conspiracy to defraud the United States under 18 U.S.C. § 371 (Count Two). Anderson pleaded not guilty to both counts of the indictment. Before trial began, Bilhar negotiated a plea agreement with the government in which Bilhar pleaded guilty to Count One and paid a fine of $54 million. In return, the government dismissed the indictment against BHIC.

Anderson went to trial and the jury found Anderson guilty on both counts. Anderson moved for a judgment of acquittal at the close of the government's case, at the close of all evidence, and after the jury returned its verdict. The district judge denied the motion each time. Anderson was sentenced to thirty-six months of incarceration and was ordered to pay a fine of $25,000. The district court allowed Anderson to remain free pending the outcome of any appeal. Anderson then perfected this appeal.

B. Factual Background

Anderson served as president of Bilhar from 1978 to 1996. Bilhar is the foreign affiliate of BHIC, an Alabama corporation whose business consisted primarily of providing support services to the bidding and construction of international projects.

As a result of the Camp David Peace Accords in the late 1970s, the United States agreed to fund construction projects to improve the treatment of drinking and waste water in Egypt. The Egyptian government awarded the projects based on sealed competitive bids from companies prequalified by USAID. In turn, the companies were paid by USAID. The projects included pump stations, pipelines, and wastewater treatment facilities.

Several U.S. companies, including Bilhar, were prequalified to bid on the Egyptian USAID projects. Bilhar and BHIC established a joint partnership with J.A. Jones Construction Co. ("Jones") of North Carolina and was prequalified as a bidder for USAID. A Bill Harbert entity held a controlling share of the joint venture throughout the prequalification stages.

Three other U.S. companies, ABB SUSA, Inc. ("SUSA"), the George A. Fuller Company ("Fuller"), and Fru-Con Construction Inc. ("Fru-Con"), also bid on at least one of the three contracts. These companies were either subsidiaries of or wholly owned by foreign co-conspirators. Philipp Holzmann, a German company headquartered in Frankfurt, owned Jones. Peter Schmidt, a prominent leader in the conspiracy, was the supervisor of Holzmann's international operations and a member of its management board. He also supervised Holzmann's subsidiaries such as Jones. ABB ASEA Brown Boveri, Ltd., a Swedish/Swiss company, was the parent company of SUSA. The Archirodon Group, Inc., a Panamanian company, owned Fuller. Bilfinger + Berger BhbH ("B + B"), a German company, was the parent company of Fru-Con.

The prequalified bidders conspired to manipulate the competitive bids on the contracts by designating which company would win the bid in question before the bids were submitted. The bidders also arranged "loser's fees," lucrative subcontracts, or promises of winning future bids for the other bidders. The winning bidder added these costs into its bid. As a result, USAID paid not only an inflated price for the project, but also the loser's fees for the non-prevailing bidders.

1. Contract 20A

In 1988, USAID solicited bids from prequalified bidders to connect a wastewater treatment facility to pumping stations with nineteen kilometers of pipe in Cairo, Egypt. Three entities were prequalified to bid on the project: the Halbert-Jones joint venture, Fru-Con, and Fuller. Prior to the opening of the bids on August 4, 1988, Peter Schmidt contacted Dieter Kadenbach, a member of Fru-Con's supervisory board. Kadenbach met Schmidt at Schmidt's offices in Frankfurt, Germany. Representatives of the other bidders, including Anderson, were also present. Schmidt proposed that the companies rig the bids on Contract 20 to ensure that Halbert-Jones would win the contract. Schmidt contacted Kadenbach several weeks later and sought to work out the details. They agreed that Fru-Con would submit a higher bid than Halbert-Jones. In exchange, Schmidt agreed to pay Fru-Con two to three percent of the price of Contract 20A, or about $2,200,000.

Schmidt also worked out bid rigging agreements with representatives from Fuller, the third qualified bidder on Contract 20A. On August 3, 1988, Gunter Niebergall, a Holzmann employee Schmidt supervised, negotiated the terms of an agreement with Constantine Iatrou, an employee of Archirodon, Fuller's parent company. The agreement provided that Fuller would only serve as a subcontractor to Harbert-Jones on the project. Holzmann agreed to compensate Fuller for not bidding by either awarding Fuller a $25,000,000 subcontract and paying Archirodon a "fee" equal to three percent of the remaining contract value, or Holzmann would pay Archirodon a five percent "fee" of Contract 20A's value — about $5,000,000. Additionally, Harbert-Jones would not bid against Fuller for future USAID projects of approximately the same value. These details were specifically enumerated in the agreement.

The same day this agreement was signed, a letter was sent on Harbert letterhead to the Contract 20A project owner, Cairo Wastewater Organization (CWO), on behalf of the Harbert-Jones joint venture. The letter informed CWO that Harbert-Jones needed to increase its previously submitted bid by three to five percent due to last-minute price changes and other circumstances.

When the bids were opened, Harbert-Jones' bid of $129.3 million was the low bid. Fru-Con bid $151.8 million and Fuller did not submit a bid at all. Before the bids were opened, engineers for CWO estimated the cost would be about $60 million. Because of the large discrepancy, CWO and USAID engaged in a series of competitive negotiations with Harbert-Jones and Fru-Con and scheduled a second round of best-and-final bids for December 1988.

Prior to the December 1988 bidding, Schmidt met with Iatrou, Anderson, and several others on December 7. They discussed the August 3 agreement and negotiated a lower payoff on the bid-rigging scheme. Anderson wrote down the new agreement and signed it. Schmidt scratched out Anderson's name on the document because he was an "American and this agreement was between European companies." Schmidt and Iatrou signed the document instead.

The companies' revised bids were opened on December 12, 1988. Harbert-Jones was awarded Contract 20A on April 16, 1989. Payment for services on the contract was made directly to Harbert-Jones from the U.S. Treasury. Harbert-Jones made its payments to Fru-Con, Fuller, and Holzmann as they had agreed. When confusion arose as to when the payments between the conspirators were due, Anderson, Schmidt, Iatrou, and others met in Frankfurt, Germany. Iatrou and Schmidt corresponded frequently about the issue, always referring to Anderson in the letters as "our friend" or their "contact in the U.S." Harbert-Jones completed the work on Contract 20A in 1993. The total contract price was $107,071,000. Harbert-Jones earned a profit of $50,639,000 on the project.

2. Contract 07

Contract 07 involved the construction of large sewer tunnels in Alexandria, Egypt. Harbert-Jones was originally the only bidder on the contract, but their bid was deemed too high by CWO and USAID. Bids were solicited a second time, to be due on November 25, 1990. Two months before the bidding date, Schmidt called a meeting in his Frankfurt offices with Werner Hoffmeister, a representative of Fru-Con's parent company B + B. Anderson also attended the meeting. Schmidt asked Hoffmeister to rig Fru-Con's bid such that Harbert-Jones could win the contract. Hoffmeister told Schmidt that Fru-Con was very interested in competing for the project. Moreover, because there was another prequalified bidder, Morrison-Knudson ("MK"), based in Boise, Idaho, there could be no effective agreement unless all three bidders agreed. Schmidt said he would ask Anderson to contact MK. Anderson did not make any response to this request, and Hoffmeister understood that Anderson would follow through with Schmidt's instructions. Two MK representatives testified that Anderson had not discussed with them rigging their bid, but Anderson did take a trip to Boise less than a month before the bidding date of Contract 07. His hotel receipt for the trip shows MK's business address as his contact information.

Two weeks after the Frankfurt meeting, Schmidt called Hoffmeister to inform him that MK would not agree to rig the bids. Schmidt and Hoffmeister therefore agreed to include a loser's fee in their bids such that if either company won the contract, it would pay the other a set sum of money.¹

At a joint venture meeting prior to the bid date on Contract 07, Anderson told Johnny...