Closing arguments wrap criminal trial against former tuna chief executive

SAN FRANCISCO -- Federal prosecutors concluded their case against Christopher Lischewski on Monday by portraying him as the former head of a struggling company who was desperate and willing to engage competitors in a tuna price-fixing conspiracy in hopes of receiving a massive payout.

"This case comes down to one thing: the defendant's desire for peace in the canned tuna industry and what he did for that peace," Department of Justice attorney Manish Kumar said.

Lischewski is accused of masterminding a plot to coordinate price increases between Bumble Bee Foods, from which he resigned as CEO in 2018, StarKist Co. and Chicken of the Sea. He faces up to 10 years in prison if convicted in a trial before U.S. District Judge Edward Chen.

Bumble Bee pleaded guilty to price-fixing in May 2017 and paid a $25 million fine. Two of the company's executives, Kenneth Worsham and Walter Scott Cameron, agreed to cooperate with federal prosecutors for potential leniency.

Defense attorney Elliot Peters argued Lischewski was an unknowing participant in the scheme.

"The best thing [Worsham and Cameron] can do is find someone else to accuse and testify against," the Keker Van Nest & Peters partner told jurors, referring to their plea agreements for reduced sentences.

The defense has maintained Lischewski's top lieutenants independently arranged and managed the price-fixing conspiracy.

Prosecutor Leslie Wulff said Lischewski's claim he was not aware of the illegal activity betrays "common sense understanding." Several witnesses, including executives at companies not charged with crimes, testified he solicited others to similarly participate in the conspiracy, she continued.

"This man asks you to believe his subordinates entered into a price-fixing conspiracy without his knowledge," she said, "that they carried it out for three years without him knowing about it."

Kumar also argued Lischewski had a multimillion-dollar incentive to get the company to reach its financial targets. If Lion Capital, which owned Bumble Bee, sold the company, the sale would have given him roughly $42 million.

But a price war in the canned tuna industry and historically high costs of fish hampered Lischewski's ambitions, Kumar continued. He said Lischewski directed Cameron to start colluding with Starkist executive Charles Handford, who also pleaded guilty to price-fixing and testified in the trial, to coordinate price increases.

Beginning in 2011, Bumble Bee raised prices two more times in the next 18 months in accordance with pricing agreements with Starkist and Chicken of the Sea, Kumar argued.

Peters argued the three companies all increased prices of their products because of the price war and the increased costs of fish. He said it's not illegal for them to do so as long as they did it independently.

"Worsham agreed they had to take list price increases because of fish costs," he told jurors. "He said it was 'inevitable.'"

The three companies colluded to fix canned tuna prices from November 2010 to December 2013. Lischewski led the conspiracy, according to the DOJ antitrust division's indictment. U.S. v. Lischewski, 18-CR0203 (N.D. Cal., filed May 16, 2018).

Prosecutors also showed the federal jury several email communications in which Lischewski discouraged former Chicken of the Sea CEO Shue Wing Chan from "pricing aggressively." "This isn't normal CEO behavior," Kumar said. "This isn't how you compete."

Chan previously testified he and Lischewski reached an "understanding" to coordinate canned tuna prices. Thai Union Group, which owns Chicken of the Sea and alerted federal prosecutors to the scheme, traded cooperation for immunity, as did Chan.

Peters disputed the prosecution's characterization there was ever an explicit understanding between Lischewski and Chan. He showed trial testimony in which Chan denied the existence of such commitments, adding the two regularly talked to discuss lawful business arrangements between the two companies.

The jury will begin deliberating Tuesday.

Dongwon Enterprise-owned StarKist Co. was ordered to pay $100 million in October 2018 after pleading guilty to felony price-fixing charges.

Facing massive fines and potential liability from criminal fines and civil lawsuits stemming from the price-fixing conspiracy, Bumble Bee, the largest North American packaged seafood seller, filed for bankruptcy Nov. 21.

There are three class action lawsuits from consumers, retailers and distributors in addition to eight other complaints from grocers, making their way through the courts.