NEW YORK – A high flying Indian American entrepreneur, Azim Makanojiya, who was born in Mumbai and grew up in Houston, Texas, and who founded the e-commerce company Wrist-Band.com at the age of 19 – which went on to emerge as the largest online seller of silicone wrist bands in the US – is headed for prison, after he and his company’s top executives agreed to plead guilty to conspiring to fix prices for customized promotional products sold online.
Zaappaaz Inc. (d/b/a WB Promotions Inc., Wrist-Band.com and Customlanyard.net) and its president Azim Makanojiya agreed to plead guilty to a one-count criminal violation of the Sherman Act, according to the Justice Department.
Acting Assistant Attorney General Andrew Finch of the Department of Justice’s Antitrust Division, Acting U.S. Attorney Abe Martinez and Special Agent in Charge Perrye K. Turner of the FBI’s Houston Field Division made the announcement, on August 7.
According to the felony charges filed today in the U.S. District Court for the Southern District of Texas in Houston, the conspirators attended meetings and communicated in person and online.
The investigation has revealed that the conspirators used social media platforms and encrypted messaging applications, such as Facebook, Skype and Whatsapp, to reach and implement their illegal agreements.
Specifically, the defendants and their co-conspirators agreed, from as early as 2014 until June 2016, to fix the prices of customized promotional products sold online, including wristbands and lanyards. In addition to agreeing to plead guilty, Zaappaaz has agreed to pay a $1.9 million criminal fine.
“As today’s charges show, criminals cannot evade detection by conspiring online and using encrypted messaging,” said Acting Assistant Attorney General Andrew Finch. “In addition, today’s charges are a clear sign of the Division’s commitment to uncovering and prosecuting collusion that affects internet sales. American consumers have the right to a marketplace free of unlawful collusion, whether they are shopping at retail stores or online.”
“Schemes like the defendants’ cause financial harm to consumers who purchase goods and services and to businesses who sell goods and services in compliance with the laws of the United States,” said Acting U.S. Attorney Abe Martinez. “The United States will continue to investigate and prosecute individuals and businesses who seek to gain an illegal advantage.”
Makanojiya is charged with price fixing in violation of the Sherman Act which carries a maximum sentence of 10 years in federal prison and a maximum fine of $1 million for individuals. The maximum fine for an individual may be increased to twice the gain derived from the crime or twice the loss suffered by the victims of the crime if either of those amounts is greater than the statutory maximum fine.
Both defendants have agreed to cooperate with the Antitrust Division’s ongoing investigation. The plea agreements are subject to court approval.
Makanojiya founded Wrist-Band.com when he was a full-time student attending the University of Houston and was also financially supporting his family. After just one year in business, Wrist-Band.com pulled in over $6.9 million.
Makanojiya got the idea for his e-commerce company after attending a trade show in China, and realized that there was a huge market to customize the product, for consumers in the US.
In 2011, Wrist-Band.com was inducted into the prestigious elite inc 500 companies, coming in at number 31 and was rated as one of Houston’s fastest growing technology companies.