Former Montana construction exec pleads guilty in monopoly case

Dive Brief:

The ex-president of a Billings, Montana-based paving and asphalt construction firm was sentenced last week for his role in a scheme to reduce competition for public projects in four states.
Nathan Nephi Zito, 44, received three years of probation with six months of home detention and was fined $27,000. He pled guilty in October in the U.S. District Court of Montana to one felony count of attempted monopolization in violation of the Sherman Antitrust Act.
He admitted to trying to monopolize highway crack-sealing services in Montana and Wyoming, according to Jesse Laslovich, U.S. attorney for the state of Montana. In January 2020, Zito approached a competing contractor, seeking to form a “strategic partnership.”

Dive Insight:

In the partnership Zito sought to create, the competitor would stop bidding for projects administered by Montana and Wyoming. In exchange, Zito would no longer pursue projects in South Dakota and Nebraska. Zito also offered to pay the competitor $100,000 as additional compensation, according to Laslovich’s report.

“If Zito had succeeded in his efforts to game the competitive bidding process, there would have been a dangerous probability he would have eliminated competition and been free to raise prices or limit production, which would have negatively impacted the American taxpayer,” Laslovich said in the release.

The charges against Zito resulted from an investigation conducted by the Department of Justice’s Antitrust Division’s San Francisco Office, the U.S. Attorney’s Office for the District of Montana and the Department of Transportation Office of the Inspector General as part of the Justice Department’s Procurement Collusion Strike Force.

In November 2019, the Justice Department created the force to combat antitrust crimes and related fraudulent schemes that impact government procurement, grant and program funding at all levels of government. Cases the strike force has investigated and prosecuted include bid- rigging schemes for projects like a Caltrans bid rigging and bribery scheme in 2022 and another in North Carolina.