Judge Blasts Manischewitz for Conspiracy to Fix Prices, Fines It $1 MillionTODD RICHISSIN , Associated Press
May. 17, 1991 3:25 PM ET
NEWARK, N.J. (AP) _ A federal judge sentenced the B. Manischewitz Co. to the maximum $1 million fine Friday for conspiring to fix the price of Passover matzo, eaten by Jews worldwide during one of their most joyous celebrations.
Manischewitz pleaded no contest to a criminal indictment last month, saying it could not defend charges it conspired to fix prices from 1981 to at least April 1986.
''Nothing less than $1 million would be fair and just,'' U.S. District Judge Harold Ackerman said during sentencing. ''It is a fine that is warranted as the just desserts for Manischewitz' conduct over this period of years.''
The company has 90 days to pay the fine.
Manischewitz attorney Justin Walder had asked for a fine of less than $160,000, telling the judge in court papers that the scheme did not hurt consumers.
But Ackerman said the argument ''borders, in my judgment, on the nonsensical.''
The judge said he agreed with antitrust experts who have found price fixing to be ''an attack on the central nervous system of the economy.''
For thousands of years, Jews worldwide have eaten matzo during Passover, the eight-day celebration marking the escape of ancient Hebrews from slavery in Egypt.
Manischewitz said matzo sales account for about 40 percent of its $32.5 million in annual sales. U.S. matzo sales total about $60 million yearly, and more than half of that revenue is taken in around Passover.
Manischewitz, based in Jersey City, conspired to raise the price of $25 million worth of Passover matzo in cahoots with Horowitz Bros. & Margareten and with Aron Streit Inc., both of New York. Horowitz has since been taken over by Manischewitz.
The government has not said why Horowitz and Aron Striet were not indicted. Government prosecutor John Greene had urged the $1 million fine, telling the judge that the scheme reached all the way to Manischewitz President Robert M. Starr.
Greene contended the scheme raised prices for the specially prepared unleavened bread.
Walder argued that a lower fine was warranted partly because the company has new owners. The merchant banking firm of Kohlberg & Co. acquired Manischewitz in January and had nothing to do with the scheme.
But Ackerman said the argument was invalid because Kohlberg knew of the charges when it bought Manischewitz.
He also rejected the company's argument that Manischewitz already had been punished by settling civil price-fixing lawsuits that arose from the indictment.
Manischewitz said in court papers that it paid $500,000 in cash and donated $2 million in food to charity to settle civil claims filed by distributors and retailers.