A&O Shearman FCPA Digest | United States v. Martin Eric Self (C.D. Cal. 2008)

Source Documents

Nature of Business
Contracts with United Kingdom Ministry of Defense (“U.K.-MOD”) for military spare parts. Martin Self, a U.S. citizen, was the President of Pacific Consolidated Industries (“PCI”), a manufacturer of Air Separation Units (“ASU”) and other equipment for defense departments around the world. PCI is headquartered in Santa Ana, California.

Influence to be Obtained
In October 1999, Self and Leo Winston Smith, the Executive Vice President of Sales and Marketing at PCI, entered into a marketing agreement with a relative of a U.K.-MOD official. Under this agreement, the relative was not obligated to provide any services, but payments would be made by PCI to the relative. The actual purpose of these payments was to obtain contracts with the U.K.-MOD for ASU spare parts. Beginning in 1999 and continuing until May 2002, Smith wired approximately $70,350 to the relative of the U.K.-MOD official. As President of PCI, Self failed to investigate the marketing agreement and the purpose of the payments made to the relative and deliberately avoided learning the true facts.

Enforcement
On May 2, 2008, the DOJ filed a two-count information alleging violations of the FCPA’s anti-bribery provisions. On May 7, 2008, Self pleaded guilty to both counts. On November 10, 2008, the government moved to have the court impose a sentence at the low end of the applicable advisory guideline range, which was 8 to 14 months, given Self’s limited involvement in the bribery scheme. On November 17, 2008, Self was fined $20,000 and sentenced to 2 years’ probation. Smith was separately indicted. In a plea hearing on September 3, 2009, Smith pleaded guilty to causing bribes to be paid to the U.K.-MOD official, including via a spurious marketing agreement at a rate of $5,000 for two quarters, and endeavoring to instruct and impede the due administration of the Internal Revenue laws. On December 2, 2010, Smith was sentenced to 6 months in prison to be followed by 6 months of home confinement and fines and a special assessment totaling $7,700.