The Justice Department’s Antitrust Division has awarded its first-ever whistleblower payment: $1 million to an individual who exposed a bid-rigging scheme that inflated used car prices.
The whistleblower’s tip led to criminal charges against EBLOCK Corporation, which agreed to pay $3.28 million in fines for failing to stop a conspiracy at a company it acquired.
The case marks a milestone for the Antitrust Division’s six-month-old whistleblower rewards program. It signals the government’s commitment to incentivizing insiders who report corporate wrongdoing, particularly schemes that harm everyday consumers in major purchases like automobiles.
EBLOCK, which operates an online auction platform for used vehicles, acquired Company A in November 2020. Court documents reveal that EBLOCK failed to immediately halt an ongoing bid-rigging conspiracy between Company A and Company B.
From November 2020 to February 2022, employees at both companies shared confidential bidding information. They agreed on maximum bid amounts and used “shill bidding” — fake bids designed to inflate prices artificially.
The conspirators went so far as to develop software that placed automatic fake bids. These bids appeared under the names of real auto dealerships without their consent.
“Whistleblowers serve as the Justice System’s greatest disinfectant against criminal antitrust conspiracies,” said Deputy Assistant Attorney General Omeed A. Assefi in a Department of Justice news release.
Assefi emphasized the scheme’s impact, stating, “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.”
The conspirators maintained a shared inventory of vehicles purchased through their scheme. They coordinated to relist these vehicles while placing shill bids to drive up prices paid by legitimate buyers.
Company A employees granted Company B special access to confidential bidding data. The co-conspirators then split the profits from their coordinated activities.
Acting Director of Criminal Enforcement Daniel Glad highlighted the program’s reach: “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.”
The scheme involved using the U.S. Mail to send supporting documents, bringing postal authorities into the investigation. Chief Postal Inspector Gary Barksdale noted that this million-dollar award demonstrates the program’s effectiveness after just six months.
Beyond the financial penalty, EBLOCK must implement compliance programs and cooperate with ongoing investigations. The company entered into a deferred prosecution agreement, thereby avoiding an immediate criminal conviction.
The whistleblower program offers rewards ranging from 15 to 30 percent of recovered funds. Eligible cases must involve criminal fines or recoveries of at least $1 million.
Federal law protects whistleblowers from employer retaliation. The Antitrust Division pledges to take reasonable steps to maintain confidentiality and minimize the risk of identification.
The investigation involved collaboration between the FBI, U.S. Postal Inspection Service, and the Antitrust Division’s Washington Criminal Section.
