Attorney General Bill Schuette today announced the filing of criminal charges
against five Madison Heights gas station owner/operators for their alleged roles
in a gasoline price-fixing operation. The stations 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. All five station owners now face charges for
violations of Michigan's Antitrust Reform Act (MARA).
"Price-fixing undermines the free market and sticks consumers
with the bill," said Schuette. "It's illegal in any industry, but is
particularly egregious as Michigan drivers struggle with rising gas prices."
Schuette's office began the investigation after a tip from
another Madison Heights gas station owner who was pressured to participate in
the price-fixing operation. The station owner worked with Attorney General
investigators to gather evidence from the five Madison Heights station
owner/operators allegedly involved in the price fixing scheme. 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 the Michigan Antitrust Reform Act (MARA) prohibits
price-fixing agreements because they undermine competitive market forces,
causing artificially higher prices for consumers. All five station
owner/operators have been charged with violations of MARA, and because Michigan
law permits the charging of companies, each of the gas stations involved has
been charged separately.
The following stations and owner/operators have each been charged
with five counts of violating Michigan's Antitrust Act. Each count is
punishable by up to two years in prison and/or a $10,000 fine for individuals,
and up to a $1 million fine for the companies.
Oil #2 (12 Mile and Dequindre), Resident Agent Shady Mahm Abdelhamid;
Sunoco-Bombay Party Shoppe, Inc. (11 Mile and John R), Resident Agent Wissam
"Sam" Mansour Shammami;
Marathon-Dequindre Oil Co. (Dequindre near I-696), Manager Farouk Ali
CITGO-Durga Lakeshmi Inc. (11 Mile and Dequindre), Manger Rengachari "Vijay"
- J & A
Quick Stop (12 Mile and John R).
following individual owner/operator has been charged with one count of violating
Michigan's Antitrust Act:
- Bernard "Yaldo"
Jalal Yaldou, Manager of J & A Quick Stop
Arrangements are being made for the defendants to turn themselves
in to authorities, and they are expected to be arraigned today at 11:00A.M. in
43rd District Court in Madison Heights.
Schuette noted that evidence of an actual agreement among
retailers is needed to prove a price fixing violation, rather than just the fact
that prices match in a particular area. If a consumer has evidence of an actual
agreement to fix prices, they are encouraged to contact Attorney General Bill
Schuette's Consumer Protection Division at 1-877-765-8388 or file a complaint
A criminal charge is merely an accusation and the defendants are
presumed innocent unless proven guilty.