On August the 7th, an e-commerce company and its top executive agreed to plead guilty to fixing prices for customized promotional products. The products were sold to customers in the United States through various websites, including Wrist-Band.com and Customlandyard.net. The parent company, Zaappaaz Inc. and its president Azim Makanojiya have agreed to plead guilty to a single count of criminal violation of the Sherman Act.
On Monday, Acting Assistant Attorney General Andrew Finch with the Department of Justice’s Antitrust Division, Acting U.S. Attorney Abe Martinez, and Special Agent Perrye K. Turner made the announcement. The felony charges were filed today in the U.S. District Court for the Southern District of Texas. According to those charges, the accused attended meetings and communicated personally and online. They’re accused of communicating through social media and encrypted messaging apps, such as Whatsapp, Skype, and Facebook.
During these communications, the defendants and their co-conspirators agreed to fix the prices for the customized promotional products they sold online. The actions allegedly took place as early as 2014 until June of 2016. The items sold through the websites include wristbands and lanyards. While pleading guilty, Zaappaaz has also agreed to pay a 1.9-million-dollar criminal fine.
President of the company, Azim Makanojiya, has been charged with price fixing in violation of the Sherman Act. In return, the charge brings a maximum of 10 years in federal prison, as well as a minimum fine of $1 million for individuals. It is also possible for the fine to be fixed according to the amount of loss suffered by the victim. Both defendants have already agreed to cooperate with the ongoing investigation. The plea agreements will need court approval.
According to records, Zaappaaz Inc. is based out of Houston Texas. The firm currently has an F rating with the Better Business Bureau. According to the BBB, the company “has been providing poor customer service”. Consumers allege that they’ve paid for their order only to receive “the incorrect or incomplete orders”. When the problem has been brought to the company’s attention, Zaappaaz has refused to rectify the problem. In total, Zaappaaz has failed to respond to 8 complaints filed against their business.