LANSING, Mich. -- Michigan attorney general Bill Schuette has announced four guilty pleas and one no contest plea by five Madison Heights gas station owner/operators for charges filed by Schuette in response to their roles in a gasoline price-fixing operation.
All five defendants and their associated stations have entered pleas in 6th Circuit Court in Oakland County to violations of the Michigan Antitrust Reform Act (MARA) and have agreed to pay substantial fines.
The stations involved in the price-fixing operation were all located within two miles of each other in Madison Heights. An investigation by Schuette's office revealed the details of the price-fixing scheme, which involved the five stations setting their gasoline prices at an artificial level, within a penny or two of each other. The scheme, which violated Michigan antitrust law, was an attempt to increase profits from gasoline sales by eliminating competition in the Madison Heights area, according to the AG.
Schuette's office began the investigation after a tip from another Madison Heights station owner who was pressured to participate in the price-fixing operation. Information obtained during the investigation showed the stations all set their prices within a penny or two of each other on at least five days: February 8, 2011, February 11, 2011, February 23, 2011, February 27, 2011, and March 3, 2011.
Schuette noted that MARA prohibits price-fixing agreements because they undermine competitive market forces, causing artificially higher prices for consumers. All five station owner/operators were charged with violations of MARA, and because Michigan law permits the charging of companies, each of the stations involved was charged separately.
On Wednesday, the following stations and owner/operators pleaded guilty in 6th Circuit Court in Oakland County to violating MARA:
- Marathon-Supergas Inc. (formerly charged as Dequindre Oil Co.), Madison Heights. The company pleaded no contest to three counts of violating MARA, a two-year high-court misdemeanor that is treated like a felony. Station manager Farouk Ali Harajli pleaded no contest to one count of violating MARA. Harajli will also pay a $50,000 fine. Sentencing for both is set for January 26, 2012.
- CITGO- Durga Lakeshmi Inc., Madison Heights. The company pleaded guilty to three counts of violating MARA. The company will also pay a $25,000 fine. Station manager Rengachari "Vijay" Vijayaraghavan pleaded guilty to one count of attempted violation MARA. Sentencing was held Wednesday, and Vijayaraghavan paid $10,000 toward the fine owed by the company.
The following stations and owner/operators previously pleaded guilty in 6th Circuit Court in Oakland County to violating MARA:
- J & A Quick Stop, Madison Heights. The company pleaded guilty to three counts of violating MARA. Station manager Bernard Jalal Yaldou pleaded guilty to one count of attempted violation MARA. Yaldou previously paid a $20,000 fine at the time his plea was entered. The pleas were entered on November 3, 2011, and sentencings are scheduled for December 22, 2011.
- Sphinx-Monster Oil LLC, Madison Heights. The company pleaded guilty to three counts of violating MARA. Resident agent/lease holder Shady Mahm Abdelhamid pleaded guilty to one count of violating MARA. Abdelhamid will also pay a $50,000 fine. The pleas were entered on November 17, 2011, and sentencings are scheduled for January 5, 2011.
- Sunoco-Bombay Party Shoppe Inc., Madison Heights. The company pleaded guilty to three counts of violating MARA. Resident agent Wissam "Sam" Mansour Shammami pleaded guilty to one count of violating MARA. Shammami will also pay a $50,000 fine. The pleas were entered on November 17, 2011, and sentencings are scheduled for January 5, 2011.
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