Pacific Consolidated Industries Sales and Marketing Director Pleads Guilty

08 September 2009 Publication

On September 3, 2009, the Department of Justice announced the former director of sales and marketing of Pacific Consolidated Industries LP (PCI) pleaded guilty to charges related to the bribing of a U.K. Ministry of Defense (UK-MOD) official for equipment contracts, in violation of the FCPA.

According to the DOJ’s press release, Leo Winston Smith, 73, pleaded guilty to a two-count superseding information charging him with conspiracy to violate the FCPA related to illicit payments of bribes for the benefit of a UK-MOD official in exchange for contracts for PCI, and with corruptly obstructing the internal revenue laws.

PCI, a privately held company headquartered in Santa Ana, California, is the manufacturer of equipment sold to defense departments around the world. As the director of sales and marketing, Smith’s main responsibility was to obtain business from and negotiate contracts with various domestic and international clients, including the U.K. Royal Air Force (RAF). According to the plea agreement, Smith, along with the president of PCI (Martin Eric Self), created a sham marketing agreement between PCI and a relative of the UK-MOD official to facilitate more than $70,000 in bribes. In turn, PCI received UK-MOD contracts.

On May 8, 2008, Martin Eric Self, a partial owner and former president of PCI, pleaded guilty to violating the FCPA for the scheme and was sentenced to two years' probation for his involvement in the scheme. The UK-MOD official pled guilty in the U.K. to accepting more than $300,000 in bribes from PCI and was sentenced to two years in prison.

Smith is scheduled to be sentenced on December 18, 2009, and faces a maximum sentence of eight years in prison.