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United States of America v. Daniel J. Mannix Kemp & Associates, Inc.
Case Number: 2:16-cr-00403-DS
Judge: David Sam
Court: United States District Court for the District of Utah (Salt Lake County)
Plaintiff's Attorney: Jacob J. Strain, Robert M. Jacobs, Ruben Martinez, Jr.
Defendant's Attorney: Devin M. Cain, Jason D. Boren, Mark R. Gaylord, Miriam L. Glaser, Richard F. Albert
Salt Lake City, UT - Heir Location Services Company and Co-Owner Plead Guilty To Antitrust Charge for Long-Running Agreement Not to Compete
Pleas Follow Court’s Ruling That the Per Se Rule Applies to Alleged Customer Allocation Conspiracy
Kemp & Associates Inc., a Salt Lake City-based heir location services provider, and its co-owner, Daniel J. Mannix, pleaded guilty to allocating customers with another heir location services firm.
Kemp & Associates and Mannix pleaded guilty to a one-count felony indictment filed on Aug. 17, 2016 in the U.S. District Court in Salt Lake City. The indictment charged Kemp & Associates and Mannix with conspiring with a competitor to suppress and eliminate competition by agreeing to allocate customers of heir location services sold in the United States between 1999 and 2014. With today’s pleas, three executives and two companies have entered guilty pleas as a result of the federal antitrust investigation into customer allocation, price fixing, bid rigging, and other anticompetitive conduct in the heir location services industry.
“For over a decade, the defendants conspired to enrich themselves and to deprive heirs pursuing their rightful inheritances of the benefits of competition,” said Assistant Attorney General Makan Delrahim of the Department of Justice’s Antitrust Division. “Allocation schemes distort markets and cheat customers. The Division will not waver in its commitment to protect consumers in all markets from schemes long-condemned as per se illegal.”
Heir location firms identify people who may be entitled to an inheritance from the estate of someone who died without a will. The heir location firms then enter into agreements with those people to help secure their inheritances in exchange for a fee. Kemp & Associates, Mannix, and their co-conspirators implemented their conspiracy when they contacted the same heir that had not yet signed with an heir location company. The company that was second to contact that heir then stopped competing for that and certain remaining unsigned heirs to the estate. In exchange for not competing, the second company received from the first company a portion of the fees ultimately collected from those heirs.
Kemp & Associates and Mannix previously challenged the application of the per se rule in this matter. Under the per se rule, certain restraints of trade are condemned as categorically illegal. In June 2017, the U.S. District Court for the District of Utah ruled the customer allocation alleged in the indictment would be tried under the rule of reason. The Division appealed the decision to the Tenth Circuit. In October 2018, the Tenth Circuit found it did not have jurisdiction to address the application of the rule of reason, but encouraged the district court to “reconsider its rule of reason order.” In February 2019, the district court granted the United States’ Motion to Reconsider and found the per se rule applies to the horizontal customer allocation agreement alleged in the indictment.
Kemp & Associates agreed to pay a $1.53 million criminal fine for its role in the conspiracy. In a separate plea agreement, Mannix also agreed to pay a $77,595.93 criminal fine. Mannix and the Antitrust Division have jointly agreed to allow the Court to determine an appropriate sentence regarding incarceration. The terms of the plea agreements are subject to the approval of the Court.
A criminal violation of Section 1 of the Sherman Act carries maximum penalties of a $100 million fine for corporations and 10 years in prison and a $1 million fine for individuals. The maximum fine may be increased to twice the gain derived from the crime or twice the loss suffered by the victims of the crime, if either of those amounts is greater than the statutory maximum fine.
The pleas are the result of the investigation into the heir location services industry conducted by the Antitrust Division’s Chicago Office and the FBI’s Salt Lake City Division, with assistance from the U.S. Attorney’s Office in Salt Lake City and the U.S. Attorney’s Office in Chicago.
Anyone with information on customer allocation, bid rigging, price fixing, or other anticompetitive conduct related to the heir location services industry should contact the Antitrust Division’s Chicago Office at 312-984-7200.
Outcome: 07/10/2019 123 Minute Entry for proceedings held before Magistrate Judge Paul M. Warner: Change of Plea Hearing as to Kemp & Associates (1), Daniel J. Mannix (2) held on 7/10/2019. Defendant Mr. Mannix present with counsel not in custody. Mr. James Mitchell present and representing Kemp and Associates.Consent before the Magistrate Judge and Order of Reference signed by both parties and accepted by the court.Both parties are placed under oath. The parties answer questions posed by the court.Statement in Advance of Plea signed by both parties and accepted by the court.Both parties enter Pleas of GUILTY to count I of the Indictment. The court accepts both parties Pleas of GUILTY.Mr. Mannix is ordered released on his own recognizance.Presentence Report ordered: Yes. ( Sentencing set for 10/2/2019 at 01:30 PM in Rm 3.400 before Judge David Sam.) Attorney for Plaintiff: Jacob Strain, Ruben Martinez and Robert Jacobs, Attorney for Defendant: Richard Albert and James Mitchell, Retained. Interpreter: Not needed. Probation Officer: Glen Manross. Court Reporter: electronic.(Time Start: 10:06:04 am, Time End: 10:58:08, Room 7.100.) (ksm) (Entered: 07/10/2019)