Former Bumble Bee CEO Faces Jail Time For Tuna Price-Fixing Scheme

The former CEO of Bumble Bee was sentenced by a federal judge this week to 40 months in prison for his role in a tuna price-fixing conspiracy.

Chris Lischewski, found guilty in December by a federal jury in San Francisco, also must pay a $100,000 fine.

In imposing the sentence, U.S. District Judge Edward Chen said Lischewski’s offense “was widespread, pervasive and affected an entire industry and, as this court has found, affecting a volume of commerce to the tune of $1 billion.”

“This sentence is the result of our commitment to holding corporations and senior leadership accountable for their actions, whether they operate in the food supply industry or elsewhere,” FBI San Francisco Division Special Agent in Charge John F. Bennett said in a statement. “This brings us closer to our goal; allowing our citizens to be able to purchase food in an unbiased market within an efficient and fair economy, free of corporate greed.”

Lischewski’s sentence is considerably lighter than what prosecutors had asked for. They had recommended eight to 10 years in prison with a $1 million fine. 

His attorneys, on the other hand, had suggested he serve 12 months of home confinement. 

“I took the responsibility of providing affordable food to American consumers very seriously,” Lischewski said at his sentencing.

Three executives also charged in the scheme pleaded guilty and testified at Lischewski’s trial, NBC News reported.

The sentencing caps a long investigation by the U.S. government.

Bumble Bee pleaded guilty in 2017 to Department of Justice charges of conspiring to fix, raise and maintain the price of packaged seafood sold in the U.S. between 2011 and 2013. 

Bumble Bee representatives apparently met with their counterparts at StarKist Co. and Chicken of the Sea Inc. to fix and inflate the prices of canned tuna.

Bumble Bee, facing a criminal fine of $25 million as a result of the guilty plea, filed for bankruptcy in November.

In September, StarKist was sentenced to pay a $100 million fine, The New York Times reported. When the company was charged in 2018, CEO Andrew Choe said it had cooperated with the Justice Department’s investigation and was ready to accept responsibility for the part it played in the conspiracy.

Court records show the conspiracy began around November 2010 and went on until December 2013. 

Authorities first became aware of the conspiracy in 2015 when Thai Union Frozen Products unsuccessfully attempted to buy the financially struggling Bumble Bee Foods, according to The New York Times.

Thai Union had already purchased Chicken of the Sea and planned to merge it with Bumble Bee to try to make the combined brand a market leader in the U.S.

However, before the merger could move ahead, New York wholesaler Olean Wholesale Grocery Cooperative noticed that even though prices for raw tuna had dropped, prices for canned tuna had not, the Times reported. 

This led the wholesaler and others, including Walmart, Target and Kroger, to file lawsuits. Consequently, the merger fell apart, according to the Times.

Chicken of the Sea executives alerted federal investigators of the plot after the attempted merger and agreed to cooperate. In exchange, the investigators shielded the company from criminal prosecution, according to NBC News.

After the Department of Justice launched its investigation, several consumers filed antitrust class action lawsuits against the Bumble Bee.

In December 2015, nine class action lawsuits and 44 related cases were consolidated into multidistrict litigation in the U.S. District Court for the Southern District of California.

In January 2020, Chicken of the Sea attempted to settle the allegations against it, but the terms of the settlement were rejected by a judge.

Judge Sammartino determined the settlement agreement did not show “the deal was negotiated at arm’s length,” Top Class Actions reported at the time. This type of negotiation helps ensure the parties are not influencing each other and lends credibility to an agreement.

Prosecutors said the price-fixing scheme affected more than $600 million in canned tuna sales, The New York Times reported.

“Executives who cheat American consumers out of the benefits of competition will be brought to justice, particularly when their antitrust crimes affect the most basic necessity, food,” Makan Delrahim, the assistant attorney general in charge of the Justice Department’s antitrust division, said in a statement. “Today’s sentence reflects the serious harm that resulted from the multiyear conspiracy to fix prices of canned tuna.”

The Justice Department told NBC its San Francisco antitrust division and the Federal Bureau of Investigation are continuing to investigate the packaged-seafood industry and are seeking information on conduct such as price-fixing and bid-rigging.

Lischewski is to pay his fine within 120 days and surrender Aug. 17 at a minimum-security camp in Lompoc, Calif., or Tucson, Ariz.

Lischewski’s attorney says the former CEO plans to appeal.

Have you purchased Bumble Bee tuna? Were you aware of the price-fixing scheme? Let us know in the comments section below. 

The government is represented by Mannish Kumar, Mikal Condon and Leslie Wulff of the U.S. Department of Justice’s Antitrust Division.

The Canned Tuna Price-Fixing Scam Lawsuit is U.S. v. Chris Lischewski, Case No. 3:18-cr-00203, in the U.S. District Court for the Northern District of California.

Read More Lawsuit & Settlement News:

Morgan Stanley Faces Discrimination Lawsuit Filed by Axed Diversity Chief

Judge Halts Local Boy Scouts Abuse Claims, Appoints Mediators

Lyft Class Action Claims the Rideshare App Sends Unauthorized Texts

Car Dealership TCPA Violations: Text Message Spam, Robocalls, Cell Phone Calls & Prerecorded Messages