Indian American entrepreneur pleads guilty to price-fixing conspiracy
Azim Makanojiya faces a maximum sentence of $1 million fine and 10 years in prison.
Indian American entrepreneur Azim Makanojiya is pleading guilty for conspiring to fix prices for customised promotional products sold online to customers in the United States, according to the justice department. He is charged with violation of the Sherman Act, which carries a maximum sentence of 10 years in prison and a maximum fine of $1 million for individuals.
Mumbai-born Makanojiya, 29, is a graduate of the University of Houston in computer engineering. He founded the e-commerce company, Wrist-Band.com, at the age of 19. The firm became the largest online seller of silicon wristbands in the US. The silicon wristbands, which can be customised for various occasions, come in various colours and have QR codes or RFID chips.
The birth of the company
The company began as a two-man team taking orders over phone in a garage. After one year, Wrist-Band.com generated over $6.9 million. Now the company has over 30 call centre representatives and 40 manufacturing employees working in a factory in China.
In 2011, the company was named 31st on the Inc 500 list of fastest growing companies, and was one for the fastest growing companies in Houston.
The announcement of the charges was made by Acting US Attorney Abe Martinez, Acting Assistant Attorney General Andrew Finch of the Department of Justice’s Antitrust Division and Special Agent in Charge Perrye K Turner of the FBI’s Houston Field Division.
Investigations revealed that the conspirators used social media platforms and encrypted messaging applications to discuss their illegal agreements. They had in-person meetings as well.
“Schemes like the defendants’ cause financial harm to consumers who purchase goods and services and to businesses who sell goods and services in compliance with the laws of the United States. The United States will continue to investigate and prosecute individuals and businesses who seek to gain an illegal unfair advantage,” acting US Attorney Martinez said, according to PTI.
“As today’s charges show, criminals cannot evade detection by conspiring online and using encrypted messaging,” said Assistant Attorney General Andrew Finch, http://www.asicentral.com reported. “In addition, today’s charges are a clear sign of the Division’s commitment to uncovering and prosecuting collusion that affects internet sales. American consumers have the right to a marketplace free of unlawful collusion, whether they are shopping at retail stores or online.”
According to felony charges filed in the US District Court, the defendants and their co-conspirators agreed from as early as 2014 until June 2016 to fix the prices of customised promotional products sold online, including wristbands and lanyards.
The company Zaappaaz (Inc.(d/b/a WB Promotions Inc., Wrist-Band.com and Customlanyard.net) – the parent company owned by Makanojiya, has agreed to pay the criminal fine of $1.9 million. The entrepreneur is cooperating with the Antitrust Division’s ongoing investigation. The plea is subject to court’s approval.