MoD Official Convicted Of Accepting Bribes from US arms firm for contract
* | 04.09.2009 07:37 | Anti-militarism
US Department of Justice Press Release
DOJ: Former Pacific Consolidated Industries LP Executive Pleads
Guilty to Bribing U.K. Ministry of Defense Official
(Source:
http://www.usdoj. gov/opa/pr/ 2009/September/ 09-crm-928. html)
The former director of sales and marketing for Pacific Consolidated
Industries LP (PCI) pleaded guilty today to charges related to the
bribery of a U.K. Ministry of Defense (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).
Leo Winston Smith, 73, of Chula Vista, Calif., pleaded guilty today
before Judge Andrew J. Guilford in U.S. District Court in Santa Ana,
Calif. Smith pleaded guilty to a two-count superseding information
charging him with conspiracy to violate the FCPA in connection with the
illicit payment of bribes for the benefit of a UK-MOD official in
exchange for obtaining and retaining lucrative contracts for PCI, and
with corruptly obstructing and impeding the due administration of the
internal revenue laws. The UK-MOD official pleaded guilty in the United
Kingdom to accepting more than $300,000 in bribes from PCI and was
sentenced to two years in prison.
According to court documents, PCI was a private company headquartered in
Santa Ana that manufactured air separation units (ASUs), nitrogen
concentration trolleys (NCTs) and other equipment for defense
departments throughout the world. ASUs and NCTs generate oxygen and
nitrogen in remote, extreme and confined locations for aircraft support
and military hospitals. As 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.
According to the plea agreement, Smith, along with the president of PCI,
created a sham marketing agreement between PCI and a relative of the
UK-MOD official to facilitate the payment of bribes. According to the
plea agreement, more than $70,000 in bribe payments was made using this
arrangement. Smith admitted that in return for the payments, PCI
obtained UK-MOD contracts. In addition, Smith admitted that he
under-reported income on his 2003 tax return and that he failed to file
a 2003 tax return for his company, Design Smith Inc. . . . .
An evidentiary hearing related to sentencing is scheduled for Dec. 15,
2009. Smith is scheduled to be sentenced on Dec. 18, 2009. Smith faces a
maximum penalty of eight years in prison.
In 2003, after the conduct alleged in court documents occurred, PCI was
acquired by a group of investors and re-named Pacific Consolidated
Industries LLC (PCI LLC). PCI LLC referred the matter to the Department
of Justice and cooperated in the government's investigation.
On May 8, 2008, Martin Eric Self, a U.S. citizen and a partial owner and
former president of PCI, pleaded guilty 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 the UK-MOD
official in exchange for obtaining and retaining lucrative contracts for
PCI. He was sentenced on Nov. 17, 2008, to two years of probation. . .
. .
DOJ: Former Pacific Consolidated Industries LP Executive Pleads
Guilty to Bribing U.K. Ministry of Defense Official
(Source:
http://www.usdoj. gov/opa/pr/ 2009/September/ 09-crm-928. html) The former director of sales and marketing for Pacific Consolidated
Industries LP (PCI) pleaded guilty today to charges related to the
bribery of a U.K. Ministry of Defense (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).
Leo Winston Smith, 73, of Chula Vista, Calif., pleaded guilty today
before Judge Andrew J. Guilford in U.S. District Court in Santa Ana,
Calif. Smith pleaded guilty to a two-count superseding information
charging him with conspiracy to violate the FCPA in connection with the
illicit payment of bribes for the benefit of a UK-MOD official in
exchange for obtaining and retaining lucrative contracts for PCI, and
with corruptly obstructing and impeding the due administration of the
internal revenue laws. The UK-MOD official pleaded guilty in the United
Kingdom to accepting more than $300,000 in bribes from PCI and was
sentenced to two years in prison.
According to court documents, PCI was a private company headquartered in
Santa Ana that manufactured air separation units (ASUs), nitrogen
concentration trolleys (NCTs) and other equipment for defense
departments throughout the world. ASUs and NCTs generate oxygen and
nitrogen in remote, extreme and confined locations for aircraft support
and military hospitals. As 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.
According to the plea agreement, Smith, along with the president of PCI,
created a sham marketing agreement between PCI and a relative of the
UK-MOD official to facilitate the payment of bribes. According to the
plea agreement, more than $70,000 in bribe payments was made using this
arrangement. Smith admitted that in return for the payments, PCI
obtained UK-MOD contracts. In addition, Smith admitted that he
under-reported income on his 2003 tax return and that he failed to file
a 2003 tax return for his company, Design Smith Inc. . . . .
An evidentiary hearing related to sentencing is scheduled for Dec. 15,
2009. Smith is scheduled to be sentenced on Dec. 18, 2009. Smith faces a
maximum penalty of eight years in prison.
In 2003, after the conduct alleged in court documents occurred, PCI was
acquired by a group of investors and re-named Pacific Consolidated
Industries LLC (PCI LLC). PCI LLC referred the matter to the Department
of Justice and cooperated in the government's investigation.
On May 8, 2008, Martin Eric Self, a U.S. citizen and a partial owner and
former president of PCI, pleaded guilty 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 the UK-MOD
official in exchange for obtaining and retaining lucrative contracts for
PCI. He was sentenced on Nov. 17, 2008, to two years of probation. . .
. .
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Comments
Hide the following 2 comments
Need to research the story first
04.09.2009 12:51
US laws about "bribery" aren't the same as in other countries and this isn't about the payments being illegal but the tax reporting of the payments. It isn't necessarily illegal under US law to pay "bribes" elsewhere -- in some places, and no, I'm not saying Britain, but in some places that's just the normal way of doing business. But here it's illegal to try to bury these payments as "normal tax deductible expenses". From you posting that appears to be the story about what is going on here.
You also can't assume that legal proceedings proceed at the same pace in different jurisdictions so maybe its a case of nothing YET to be reported in the UK media.
MDN
try reading it again
04.09.2009 17:59
'The UK-MOD official pleaded guilty in the United
Kingdom to accepting more than $300,000 in bribes from PCI and was
sentenced to two years in prison. '
This is the unreported story im talking about
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