Bovine Artificial Insemination Manager Pleads Guilty to Multi-Year Bid-Rigging Conspiracy

A South Carolina manager of a bovine artificial insemination firm pleaded guilty today to rigging bids for the purchase of cattle used either for the direct production of semen or for the development of animals for future semen production.

According to court documents filed in the U.S. District Court in Columbus, Ohio, Herbert D. Lutz, 56, of Chester, SC pleaded guilty to conspiring to rig bids between at least as early as October 2018 and at least as late as May 2024. In advance of cattle auctions, Lutz and his co-conspirators agreed which company would win the bid. During the sales, the agreed-upon losing firm would either not bid or would submit an intentionally-losing bid before bowing out to permit the agreed-upon winner to prevail. Through the efforts of Lutz and his co-conspirators, Lutz's employer was able to acquire cattle worth over $1.6 million through rigged sales.

Bovine artificial insemination firms produce, market, and sell bovine semen for artificial insemination, research, and genomics. As part of their business, such firms purchase cattle from third parties, including through competitive public auctions, either for the direct production of semen for sale or to develop animals for future production.

"The tireless work of our Nation's ranchers and farmers is essential to everyday affordability for all Americans," said Associate Attorney General Stanley E. Woodward Jr. "This Department of Justice will never stand for collusion that cheats hardworking, honest producers and raises prices for American families putting food on the table. Collusion and bid rigging is criminal, and we will prosecute it to the fullest extent of the law."

"Collusion in the agricultural industry ultimately leads to higher food prices for consumers," said Acting Deputy Assistant Attorney General Daniel Glad of the Justice Department's Antitrust Division. "The Antitrust Division is dedicated to stamping out such collusion and prosecuting those responsible, thereby ensuring that our food supply remains affordable and plentiful for all Americans."

"Bid rigging harms not only consumers, but also hard-working ranchers and farmers who are cheated out of competitive prices for their cattle," said Acting Special Agent in Charge Salvador Gonzalez of the Agriculture Department's Office of Inspector General Midwest Field Office. "We will continue to work alongside our partners at the Antitrust Division to safeguard the rural way of life from corporate greed."

Lutz is the first defendant to be charged and to plead guilty in the ongoing investigation into bid rigging in the bovine artificial insemination industry. Lutz pleaded guilty to conspiracy to rig bids in violation of Section 1 of the Sherman Act and faces a maximum penalty of 10 years in prison and a $1 million criminal fine. The maximum penalty for corporations is a $100 million criminal fine. The 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 amount is greater than the statutory maximum fine. A federal district court judge will determine any sentence after considering the U.S. Sentencing Guidelines and other statutory factors.

The Antitrust Division's Chicago Office is prosecuting the case, which was investigated with the assistance of the Department of Agriculture Office of Inspector General.

Anyone with information in connection with this investigation, or other antitrust and competition crimes, should contact the Antitrust Division's Complaint Center by visiting https://www.justice.gov/atr/report-violations. Whistleblowers who voluntarily report original information about antitrust and related offenses that result in criminal fines or other recoveries of at least $1 million may be eligible to receive a whistleblower reward. For more information on the Antitrust Whistleblower Rewards Program, visit https://www.justice.gov/atr/whistleblower-rewards.