## Facts

- Archer Daniels Midland (ADM) entered the global lysine market in 1991; prices fell amid competition with established Asian producers.
- ADM executives and competitor producers held meetings and reached agreements setting lysine prices and allocating production/sales volumes.
- Mark Whitacre, an ADM executive, cooperated with the FBI and recorded meetings and conversations that captured explicit discussions of price and volume agreements.
- A federal grand jury charged Michael D. Andreas (ADM vice-chairman) and Terrance S. Wilson (head of ADM’s Corn Processing Division), among others, with a single Sherman Act § 1 conspiracy to fix prices and allocate sales volumes in the lysine market.
- After a lengthy jury trial, Andreas and Wilson were convicted; the district court denied post-trial motions for acquittal and a new trial.
- The district court imposed 24-month prison sentences and fines; the government sought higher sentences, arguing the defendants were leaders/organizers under the Sentencing Guidelines.

## Issues

1. Whether the evidence was sufficient to prove beyond a reasonable doubt that Andreas and Wilson knowingly joined a Sherman Act § 1 conspiracy to fix prices and allocate sales volumes.
2. Whether the proof at trial materially varied from the indictment’s allegation of a single global conspiracy (including volume allocation), as opposed to multiple or different conspiracies.
3. Whether the district court erred in admitting (a) Whitacre’s recordings and (b) other-acts evidence concerning ADM’s conduct in a separate citric-acid conspiracy under Fed. R. Evid. 404(b).
4. Whether a DOJ attorney letter created enforceable immunity or other protections barring prosecution or limiting the government’s use of evidence against Andreas and Wilson.
5. Whether the district court erred at sentencing by declining to apply leadership-role enhancements under U.S.S.G. § 3B1.1 and related guideline determinations.

## Decision

- The court affirmed the convictions, finding the trial evidence (including recordings) sufficient to establish knowing participation in a *per se* unlawful price-fixing and volume-allocation conspiracy.
- The court rejected claims of a fatal variance or failure to prove a single conspiracy, holding the evidence showed an integrated, continuing scheme; cheating within the cartel did not negate the agreement.
- The court upheld admission of Whitacre’s recordings and found no reversible error in the district court’s related evidentiary management.
- The court upheld admission of citric-acid other-acts evidence as probative of intent/knowledge and found limiting instructions adequate.
- The court held the DOJ letter did not confer individual immunity on Andreas and Wilson that barred the prosecution or use of the challenged evidence.
- On the government’s cross-appeal, the court vacated the sentences and remanded for resentencing, concluding leadership-role enhancements should have been applied.

## Legal Principles

- Horizontal agreements among competitors to fix prices are *per se* violations of Sherman Act § 1; the government need not prove actual anticompetitive effects.
- Horizontal agreements to allocate sales volumes or market shares are also *per se* unlawful restraints of trade.
- A conspiracy may be proved by direct and circumstantial evidence; recordings and corroborating testimony can establish knowing participation.
- Evidence of other misconduct may be admissible under Fed. R. Evid. 404(b) to show intent, knowledge, or absence of mistake when sufficiently similar and temporally proximate, subject to limiting instructions and Rule 403 balancing.
- One-party-consent recordings made with an informant’s cooperation generally do not violate Title III, and suppression requires a defendant to show a legitimate expectation of privacy where standing is contested.
- Sentencing courts must apply appropriate role-in-offense adjustments when the record shows an organizer/leader role under U.S.S.G. § 3B1.1; failure to do so can require resentencing.

## Conclusion

The Seventh Circuit sustained the lysine cartel convictions based on strong recorded and corroborated evidence of *per se* unlawful price-fixing and volume allocation, upheld key evidentiary rulings and rejection of claimed immunity, and remanded only for resentencing because the defendants’ leadership roles required higher guideline adjustments.


United States v. Andreas, 216 F.3d 645 (7th Cir. 2000)