The U.S. Department of Justice’s Antitrust Division has awarded its first-ever whistleblower reward—a $1 million payment to an individual whose tip exposed a nationwide bid-rigging and fraud scheme involving used vehicle auctions. The information provided led to a deferred prosecution agreement with EBLOCK Corporation, an online auto auction platform, which has agreed to pay a $3.28 million criminal fine.
“Whistleblowers serve as the Justice System’s greatest disinfectant against criminal antitrust conspiracies,” said Deputy Assistant Attorney General Omeed A. Assefi, emphasizing the scale of the misconduct. “This whistleblower helped expose a brazen $16 million scheme that made it more expensive for hardworking Americans to afford second-hand cars across the country.”
A Nationwide Scheme to Rig Bids and Trick Buyers
The investigation revealed that following its November 2020 acquisition of Company A, EBLOCK failed to shut down illegal activities that were already underway. From November 2020 through February 2022, employees of Company A conspired with employees from Company B to eliminate competition on Company A’s auction site. The conspirators shared bidding information, agreed on maximum bids, and manipulated auctions to favor each other in violation of the Sherman Act.
Even more troubling was the use of “shill bidding”, where fake bids were placed to drive up sale prices. “The vehicles were found to be altered to conceal illegal drugs.” Co-conspirators even developed software to impersonate real dealerships, placing fake bids without the dealerships’ consent to deceive legitimate buyers.
The conspiracy included mail fraud, as various scheme-related documents were sent through the U.S. Mail, violating 18 U.S.C. § 1343.
Enforcement and Repercussions
The investigation was led by the FBI and the U.S. Postal Inspection Service, and prosecuted by the Antitrust Division’s Washington Criminal Section. In addition to the monetary fine, EBLOCK must now implement a compliance program and fully cooperate with ongoing investigations.
“Today’s reward shows that the Antitrust Division leverages whistleblower reports to drive forward our investigations,” said Daniel Glad, Acting Director of Criminal Enforcement. “If a whistleblower provides new information that ultimately assists the Antitrust Division in bringing charges, the whistleblower might receive a significant award — even if the criminal activity has already ended.”
Wide-Ranging Impact and Legal Protections
This case not only demonstrates the power of whistleblowers, but also shows how antitrust conspiracies can deeply affect consumers. “A car is the second largest purchase most Americans will make in their lifetimes,” Assefi stated. The fraudulent behavior led to inflated vehicle prices for everyday Americans.
Chief Postal Inspector Gary Barksdale added, “This $1 million dollar award comes only six months after the Whistleblower Rewards Program first started.” He said the Postal Service is committed to pursuing those who exploit its systems.
Federal law protects whistleblowers from retaliation, and the DOJ promises to safeguard their confidentiality. Whistleblowers who provide original, voluntary information that results in criminal fines or recoveries of at least $1 million may be eligible for 15 to 30 percent of the recovered amount.
To learn more about the Antitrust Whistleblower Rewards Program, including how to report misconduct, visit justice.gov/atr/whistleblower-rewards.
