Japanese Bid-Rigging Defendant’s Assets Frozen : Defense: The firm is among 140 that the U.S. is suing. All were involved in building a Navy base.

A Japanese court has frozen the bank accounts and property of a Japanese company accused of participating in a scheme to rig construction bids for a U.S. Navy base in Japan.

U.S. Justice Department lawyers asked for the order freezing $1.6 million worth of the assets of Hosaka Engineering Co.

It was the latest action in a civil suit that the Justice Department initiated last December against 140 Japanese companies--the first time that the U.S. government had challenged the longtime Japanese practice of bid rigging.

The United States accuses Hosaka and the 139 other Japanese companies of rigging bids to inflate prices by 25% on 250 construction contracts at the base in Yokosuka, Japan.

The collusion lasted from 1984 until the Naval Investigative Service discovered it in 1987, the Justice Department said.

“Dango,” or bid rigging, is an entrenched practice in Japan. Construction companies meet in secret to determine which will submit the winning bids.

The freeze order was the latest U.S. victory in the case. Since December, 124 of the companies named in the lawsuit, including many of Japan’s largest construction firms, have paid $33.8 million to settle claims.

Hosaka, a small company based in Kawasaki, not far from Yokosuka, is one of 16 businesses that refused to settle.

A Justice Department spokesman said he was unaware of efforts to freeze the assets of the other 15 firms.

After reviewing the evidence that U.S. lawyers presented, a district court in Kawasaki froze Hosaka’s bank accounts, real property and movable assets so that they would be available if the United States wins its case.

Granting the order means that the court believes that the United States has a substantial likelihood of winning the case, according to the Justice Department.

“Today’s action by the court is an important step toward ensuring free and fair trade by making it clear that all nations of the world must be bound by the same international code of business and legal conduct,” said Stuart M. Gerson, assistant attorney general in charge of the civil division.

U.S. success in the Yokosuka case has spurred the Justice Department and Defense Department to open similar investigations at many American bases around the world.