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In a blow to the Justice Department’s international bid-rigging cases in the marine hose industry, a federal jury in Florida acquitted two executives of an Italian-based manufacturer after two hours of deliberation in a four-week trial. The acquittals on Monday of Val M. Northcutt and Francesco Scaglia come in a case that marked one of the few internationally coordinated arrests during a major cartel investigation in 2007. Eight executives meeting in the United States were arrested in pre-dawn raids during a Houston industry meeting. The arrests included three executives from the United Kingdom, two from France, two from Italy and one from Japan in a case that has been described by the government as affecting prices worldwide for hundreds of millions of dollars in marine hose products. Northcutt, who worked in sales for Milan, Italy-based Manuli Rubber Industries, and Scaglia, an Italian working as product manager at Manuli’s factory, were charged in the Southern District of Florida with conspiracy to rig bids and fix prices in the sales of marine hose, which is used to transfer crude between tankers and storage facilities. The Justice Department did not return a call seeking comment. “We were all but mocked for ever considering taking this case to trial,” said Paul Calli, a white-collar defense specialist in the Miami office of Carlton Fields, who represented Northcutt. “The jurors were completely in disbelief over the testimony of four prosecution witnesses. Three were architects of the cartel and had benefited by millions of dollars and were pointing fingers down at people who were less important,” he said. “We did not contest the existence of a conspiracy, but argued that our client did not knowingly join,” he said. U.S. v. Northcutt, No. 07-60220CR (S.D. Fla.). Northcutt oversaw installation and maintenance of the hoses, but he did not set prices, according to Calli. “What the Northcutt case shows, in part, is the danger to prosecutions in which the DOJ makes deals with the most culpable parties and then uses these people as witnesses against innocent defendants,” said Michael S. Pasano of Carlton Fields, who also represented Northcutt. Scaglia’s attorney, David Oscar Markus of Markus Law in Miami said, “Francisco has said from day one that he is innocent and is looking forward to going back home to Italy and his family.” The three Manuli executives who agreed to plead guilty and testify in the Northcutt and Scaglia case were Robert L. Furness, former president of the Plantation, Fla.-based subsidiary; Charles J. Gillespie, a former executive; and Peter Whittle, a British national and Dunlop executive who, according to trial testimony, organized and ran the worldwide price-fixing conspiracy with Furness and Gillespie. Whittle, who allegedly made close to $7 million from the conspiracy, agreed to pay a $100,000 fine and have a two-and-one-half year prison term deferred in exchange for his return to the United Kingdom to cooperate in cases there. In June, Whittle and two other former Dunlop executives were jailed for an illegal price-fixing scheme. Whittle received a three-year sentence in the United Kingdom.

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