3 Former ADM Execs Guilty of Conspiring to Fix Lysine Prices

CHICAGO —  Three former Archer-Daniels-Midland Co. executives, including the son of Chairman Dwayne Andreas, were found guilty Thursday of conspiring to fix the price of lysine, an animal feed additive.

After seven weeks of taped evidence and testimony, jurors in U.S. District Court in Chicago concluded that Michael Andreas, on paid leave from his position as ADM vice chairman; Terrance Wilson, a former head of ADM’s corn-processing division; and Mark Whitacre, a former division head and FBI informant, violated federal law. The case went to the jury a week ago.

The verdict is the culmination of a secret three-year FBI investigation into practices at the Decatur, Ill.-based grain processor and its foreign rivals involving the $600-million global market for lysine. Whitacre, who taped meetings for the FBI, was discredited and lost his immunity after he admitted stealing millions of dollars from the company. He had once been considered a contender for president of ADM.

“We’ve been fighting this for three years,” said Jack Bray, the attorney for Michael Andreas. “We will continue to fight.”

Judge Blanche Manning set sentencing for Jan. 7. The charges carry a maximum penalty of three years in jail and a $350,000 fine. Defendants could still pay more, because the government can seek twice the amount gained from the crime or lost by the victims.

The trial of the executives came after ADM pleaded guilty in October 1996 to fixing the prices of lysine and citric acid, an ingredient used in soft drinks and other products, and paid a then-record $100-million fine.

Prosecutors portrayed Wilson, 60, as the mastermind behind the conspiracy and Andreas as giving final approvals. Whitacre, 41, was the head of the division that made lysine. Michael Andreas, 49, at one point was considered a successor to his 80-year-old father, Dwayne Andreas.

After the verdict, U.S. Atty. Scott Lassar said “it’s pretty clear . . . they will probably get the maximum sentence.”

Prosecutor James Griffin of the Justice Department’s antitrust division’s Chicago bureau said the ADM price-fixing investigation was a landmark case because of “its size, the worldwide volume of commerce, worldwide nature of the conspiracy and the number of high-level executives involved.”

In addition to ADM, four Asian companies central to the case pleaded guilty to fixing prices. They are Japan’s Ajinomoto and Kyowa Hakko Kogyo Co., and South Korea’s Daesang Corp. and Cheil Jedang Corp.

ADM shares fell 69 cents to close at $15.56 on the New York Stock Exchange.