Judge Refuses $25M ADM Penalties

Rebuking government prosecutors for a "wholly deceptive" argument, a federal judge ruled that two former Archer Daniels Midland Co. (Decatur, IL) executives convicted of price-fixing will receive fines of no more than $350,000. The fines will be far less than the $25 million the government had sought.

Michael Andreas, on leave as ADM executive VP, and Terrance Wilson, former head of the corn division, will be sentenced July 9 in a scheme to set high prices for the cattle feed additive known as lysine. Andreas, son of longtime ADM chief Dwayne Andreas, and Wilson were convicted last September.

In seeking the $25 million fines, as well as prison time for Andreas, prosecutors said such punishment would reflect the amount of money ADM allegedly reaped in the scheme. But U.S. District Judge Blanche Manning berated the Justice Department in a ruling Wednesday, saying it failed to prove how much lysine sales were affected by the scheme.

The defendants had said a $25 million fine was too high, given the amount of lysine produced in the world during the price-fixing scheme. They sought proof for their argument from overseas lysine producers who allegedly participated in the price-fixing conspiracy.

In addition to the fine, federal prosecutors had sought three years in prison, the maximum allowable, against Andreas. Manning did not address prison time in her ruling.

Mark Whitacre, the mole who tape-recorded meetings where the price-fixing scheme was discussed, also will be sentenced July 9. His attorney is seeking a sentence concurrent with the nine-year term Whitacre is already serving for bilking ADM of $9 million while working as chief of the bioproducts division. Manning said he also faces a maximum $350,000 fine.