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May 09, 2008 

U.S. Executive Pleads Guilty in Connection With Bribes Paid to U.K. Ministry of Defence Official

The U.S. Department of Justice (DOJ) announced yesterday that a former Pacific Consolidated Industries LP (PCI) executive pleaded guilty today to charges related to the bribery of a U.K. Ministry of Defence (UK-MOD) official in order to obtain lucrative equipment contracts with the U.K. Royal Air Force, in violation of the Foreign Corrupt Practices Act (FCPA)

According to the DOJ, Martin Eric Self, 51, of Orange, Calif., pleaded guilty today before Judge Andrew J. Guilford in U.S. District Court in Santa Ana, California to a two-count information charging him with violating the FCPA in connection with the illicit payment of more than $70,000 in bribes for the benefit of a UK-MOD official in exchange for obtaining and retaining lucrative contracts for PCI.

Self was a partial owner and the president of PCI at the time the crimes were committed. PCI was a private company headquartered in Santa Ana that manufactured Air Separation Units (ASUs) and other equipment for defense departments throughout the world. ASUs generate oxygen in remote, extreme and confined locations for aircraft support and military hospitals. PCI was subsequently acquired by a group of investors and re-named Pacific Consolidated Industries, LLC (PCI, LLC). PCI, LLC referred this matter to DOJ and fully cooperated in the government’s investigation.

According to the plea agreement, in or about October 1999, Self and Leo Winston Smith, PCI’s then-executive vice president and director of sales and marketing, caused PCI to enter into a marketing agreement with a person Self understood to be a relative of the UK-MOD official. The official, as a result of his position within the UK-MOD, was able to influence the awarding of UK-MOD contracts for services and equipment. As part of the plea agreement, Self admitted that he was not aware of any genuine services provided by the official’s relative, and believed there was a high probability that the payments were being made to the official’s relative in order to benefit the official in exchange for obtaining and retaining the ASU contracts. Despite these beliefs, Self initiated several of the improper wire transfers to the relative and deliberately avoided learning the true facts relating to the nature and purpose of the payment.

Self is scheduled to be sentenced on September 29, 2008. At sentencing, Self faces a statutory maximum sentence of five years in prison per count. However, the plea agreement contemplates a prison term of eight months.

Mr. Smith was indicted in April 2007 for his role in the scheme and is scheduled to stand trial in July 2008. The UK-MOD official was investigated by U.K. authorities and has pleaded guilty in the United Kingdom to accepting bribes from PCI and was sentenced to two years in prison.




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