A former co-owner and executive of California-based Pacific Consolidated Industries (PCI) pleaded guilty yesterday to violating the Foreign Corrupt Practices Act. Martin Eric Self, 51, of Orange, California pleaded guilty to a two-count information charging him with violating the FCPA by paying more than $70,000 in bribes to a U.K. Ministry of Defence official. The bribes were intended to secure equipment contracts with the U.K. Royal Air Force.
In October 1999, Self, a U.S. citizen, and Leo Winston Smith, then PCI’s executive vice president and director of sales and marketing, had PCI enter into a marketing agreement with a relative of a U.K. Ministry of Defence official. According to the DOJ, Self — a signatory on PCI’s marketing agreements and bank accounts — admitted that he didn’t know of any genuine services provided by the official’s relative. Instead, Self believed the payments probably were benefiting the official in exchange for obtaining and retaining the equipment-supply contracts.
Self is scheduled to be sentenced in federal court on September 29, 2008. Although he faces a maximum sentence of five years in prison per count, his plea agreement contemplates a prison term of eight months, subject to the court’s final determination at sentencing.
For his role in the scheme, former marketing head Smith, a co-founder of PCI, was indicted in April 2007. The government says he conspired to bribe the U.K. Ministry of Defence official in order to obtain equipment contracts worth more than $11 million dollars. In addition to the FCPA violations, the indictment also charges Smith with money laundering and tax offenses. He’s scheduled to stand trial in July 2008. Self, as part of his plea agreement, will presumably testify against his former colleague. Evidence against Smith is also likely to come from U.K. authorities. Their investigation of the U.K. Ministry of Defence official resulted in his guilty plea in the United Kingdom for accepting bribes from PCI. He was sentenced to two years in prison.
Privately-held PCI manufactures Air Separation Units (ASUs) and other equipment for the military, medical, and oil and gas markets. ASUs generate oxygen in remote, extreme and confined locations. The DOJ said that in late 2003, after the alleged illegal conduct occurred, PCI was acquired by a group of investors who referred the case to U.S. prosecutors and “fully cooperated in the government’s investigation.”
Assistant Attorney General for the Criminal Division Alice S. Fisher, who departs from the DOJ later this month, said, “Individuals who resort to bribery and other fraudulent means to secure contracts with foreign governments not only corrupt legitimate bidding processes, but they also damage the integrity of the global marketplace. Furthermore, using an intermediary to make bribe payments will not insulate individuals from prosecution.”
Referring to the collaboration by prosecutors in the U.S. and U.K., Ms. Fisher also said, “The coordinated international law enforcement efforts of this case exemplify the type of cooperation needed to fight crime in the 21st century, where physical borders are not boundaries for criminal activity. I would like to thank our colleagues in the United Kingdom for their efforts and assistance in prosecuting this case as well as the FBI and IRS for their investigatory assistance.”
View the DOJ’s May 8, 2008 news release here.
You’re missing a few items.
On May 15, 2008, Jason Steph consented to an entry of a permanent injunction with the SEC with a possible civil penalty to be determined. Gerald Jansen,
another former Willbros executive in Nigeria, received a permanent injunction and a civil fine of $30,000, while Lloyd Biggers, a
former Willbros employee in Nigeria, received a permanent injunction.
On October 4, 2007, Steven Head, the former CEO of Titan Africa, who in June pleaded guilty to one count of falsifying the books and
records provision of the FCPA, was fined $5,000 and sentenced to six months imprisonment to be followed by three years of supervised release.
And if you really want to be thorough, on October 24, 2007, the U.S. Court of Appeals for the
Fifth Circuit affirmed the FCPA and
obstruction of justice convictions of David Kay and Douglas Murphy. (and on January 10, 2008, the Court denied a petition en banc to review its decision. Kay and Murphy have a Cert petition currently pending before the Supreme Court)
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