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Penachio sentenced to four years in bid-rig case

The U.S. Department of Justice (DOJ) has announced that Nicholas A. Penachio, president, Nick Penachio Co., Bronx, NY, has been sentenced to four years in prison and fined $1 million for his role in rigging bids and related offenses involving more than $200 million of food contracts awarded by the New York City Board of Education (NYCBOE) and other government agencies. In addition, Penachio has been ordered, along with his company, to pay $4.2 million in restitution.

"The sentence imposed upon Nicholas Penachio is the longest single prison sentence obtained in a prosecution handled by the Antitrust Division," comments Charles A. Hames, assistant attorney general in the DOJ's Antitrust Div. "It sends a powerful message to others about the risks of engaging in bid-rigging, particularly where public agencies, and the American taxpayers, are victimized."

In a related case, Frank H. Russo, owner of FHR, Inc., Brooklyn, NY, was sentenced to serve 21 months in prison. Along with FHR, he also was ordered to pay at least $2.12 million of a total restitution order of $12.3 million to the NYCBOE.

Penachio and Russo were among 22 individuals and 13 companies charged last year with rigging bids for supply and delivery of food to the NYCBOE. All have pled guilty except David Salomon and his company, M&F Meat Products Co., East Orange, NJ. The latter were convicted in June, after a three-week trial.

To date, defendants in these and related cases have been ordered to pay approximately $9 million in restitution to the NYCBOE. Sentencing of remaining defendants is scheduled to take place this month.

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