Former company director fined over carpet price-fixing scam

A former company director who pleaded guilty to operating a price fixing scam that targeted large firms including Google and Paypal, has been fined €7,500 at the Central Criminal Court.

Brendan Smith (39), of Greenane, Dunshaughlin, Co Meath was also handed a three-month prison sentence, suspended for two years, for attempting to impede a prosecution.

Smith entered a bond to be of good behaviour and accepted that if he breaches the bond he could serve three months in prison.

The maximum penalties for the offences involved include a fine of up to €5 million and 10 years in prison for price fixing and up to five years imprisonment for obstructing a prosecution.

The company that Smith worked for at the time of the offence, Aston Carpets, was fined €10,000.

Smith pleaded guilty in April to engaging in and implementing an anti-competitive agreement between July 2012 and April 30, 2013, contrary to the Companies Act 2002.

The charge further stated that this agreement involved Aston Carpets and Flooring and another firm, Carpet Centre (Contracts) Ltd, attempting to fix prices for their products by knowingly tendering bids that were above the amount tendered by the other firm.

At a sentencing hearing on May 1st, Daniel Kenna of the Competition and Consumer Protection Commission explained that the scam was exposed by David Radburn of Carpet Centre.

Mr Radburn sought immunity from prosecution by revealing details of the agreement he had entered into with Smith.

Smith and Mr Radburn worked in the flooring trade, bidding for contracts with large multi-national corporations. Mr Radburn told the commission that he was approached by Smith in 2011 and during a subsequent meeting they agreed that if one of them was going for a job that they thought they would get, the other would offer a higher-priced tender for the same job.

In October 2011, Mr Radburn won a contract to provide flooring for Google for which €193,000 was paid. Mr Radburn, having tendered for the contract, sent an email to Mr Smith with details so that Mr Smith would submit a higher tender.

In another case Aston won two contracts worth more than €100,000 with MasterCard after submitting a tender and then getting Mr Radburn to submit a higher-priced tender.

The average price of the contracts in which the companies engaged in price fixing over the period was €137,000, Mr Kenna said. The biggest contract was for €312,000 with Paypal and was won by Aston Carpets.

The scam came to an end on April 30th, 2013, when gardaí raided the offices of the two companies.

During the raid, Smith was overheard calling Mr Radburn by phone and asking him to delete emails and was therefore charged with attempting to impede a prosecution.

Mr Justice Patrick McCarthy said he was taking into account Smith’s salary and assets in passing sentence. He noted that he has an income of €9,422 per month and an interest in various properties in Dublin and Co Meath.