By KIMBERLEY HAAS
Two Kentucky real estate professionals who allegedly conspired to rig bids for farmland and timber rights each face up to 10 years in prison and a $1 million fine.
Barry Dyer and Mackie Shelton allegedly rigged the bids for hundreds of acres of farmland and a tract of timber rights during an auction in April of 2018.
The auction took place in Allen County, Kentucky. The bidding reached a point where the only participants were Dyer, Shelton, and two men who had leased the farm together to grow tobacco, according to an article by Bill Estep at the Lexington Herald Leader.
Officials at the U.S. Department of Justice claim Dyer and Shelton demanded $40,000 from these competing auction participants to stop bidding, suppressing the sales price and violating the Sherman Act.
The Sherman Act outlaws “every contract, combination, or conspiracy in restraint of trade,” and any “monopolization, attempted monopolization, or conspiracy or combination to monopolize,” according to guidance published by officials at the Federal Trade Commisssion.
Dyer and Shelton tried to have the federal charges dismissed, but that was denied by Chief Judge Greg Stivers.
Stivers identified Dyer and Shelton as investors engaging in ongoing interstate business activities related to auctions and real-estate investments.
“In their motions, Defendants challenge both subject matter jurisdiction and the sufficiency of the allegations in the indictment. Neither basis warrants the dismissal of the indictment in this case,” Stivers wrote. “The interstate commerce element of the Sherman Act claim is not jurisdictional.”
On Wednesday, a plea agreement was filed in the U.S. District Court for the Western District of Kentucky.
A judge will decide the sentences for Dyer and Shelton after considering the U.S. Sentencing Guidelines and other statutory factors, according to a press release.
Assistant Director Luis Quesada of the FBI’s Criminal Investigative Division said in a statement that American farmers deserve to run their businesses in a fair market.
“The FBI and our law enforcement partners are dedicated to protecting the farming industry from bid rigging and other schemes that undermine the success of others and the spirit of competition,” Quesada said.
Assistant Attorney General Jonathan Kanter of the Justice Department’s Antitrust Division said they will “continue to hold accountable anyone who conspires to line their own pockets at the expense of this competitive process.”
“The farming industry is vital to the nation’s economy and relies on competitive pricing for the land where crops are grown. Today’s guilty pleas help ensure the integrity of farmland auctions,” Kanter said in a statement.
The case was investigated and prosecuted by the Antitrust Division’s Washington Criminal I Section, with the assistance of the FBI’s International Corruption Unit, and the U.S. Attorney’s Office for the Western District of Kentucky.
Anyone with information in connection with this investigation can contact the Antitrust Division’s Complaint Center at 888-647-3258, or visit http://www.justice.gov/atr/report-violations.
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