Search

Editors

Richard L. Cassin Publisher and Editor

Julie DiMauro Executive Editor

Andy Spalding Senior Editor

Jessica Tillipman Senior Editor

Elizabeth K. Spahn Contributing Editor

Eric Carlson Contributing Editor

Michael Kuria Contributing Editor

Thomas Fox Contributing Editor

Philip Fitzgerald Contributing Editor

Marc Alain Bohn Contributing Editor

Michael Scher Contributing Editor

Bill Waite Contributing Editor

Shruti J. Shah Contributing Editor

Russell A. Stamets Contributing Editor

Connect

Subscribe to receive the free FCPA Blog Daily

Close
« Pain Which Cannot Forget | Main | Alcatel-Lucent's $10 Million Question »
Friday
Jan072011

Smith Sentence: Age, Health, And Time Served?

The former director of sales and marketing for Pacific Consolidated Industries (PCI) who pleaded guilty in 2009 to bribing an official from the U.K. Ministry of Defense (MOD) in return for equipment orders was sentenced in December to just six months in prison followed by six months of home confinement.

Leo Winston Smith, 75, faced up to five years in prison on an FCPA conspiracy charge and three years on a tax-related charge. The government had asked for a 37-month sentence.

Mike Koehler's account of the sentencing is here.

Why the short sentence? When Smith pleaded guilty, he reserved the right to argue for a shorter sentence based on his age and poor health -- he's had three heart attacks. And he's already spent years on supervised release. From June 2007 to May 2008, he was on home confinement with electronic monitoring. After that, he had a curfew from 7 pm to 9 am, with continued electronic monitoring. The curfew and electronic monitoring ended after a few months but he continued on "intensive pretrial supervision for another 26+ months," according to a sentencing memo he filed.

Smith's co-conspirator, Martin Eric Self, pleaded guilty in May 2008 to violating the FCPA. Although Self faced up to five years in prison on each of two FCPA counts, his plea agreement contemplated a prison term of just eight months. He was finally sentenced in November 2008 to two years probation. The MOD official, Michael Hale, pleaded guilty in the United Kingdom to accepting nine separate payments from PCI totaling more than $300,000. He was sentenced in April 2007 to two years in prison.

The DOJ rolled out lots of arguments to support a longer sentence for Smith. Here's an excerpt from the government's sentencing memo:

As the Court is well aware, this is a case about corruption, a crime with serious consequences. These consequences are not only to the other competitors, who were denied a fair shot, or the UK government, which might have gotten a better deal had it not been for the defendant and Michael Hale’s misconduct, but society at large. Corruption degrades the rule of law, the efficiency of the market, and citizens’ trust in their government. And, in this case, it is a crime for which the defendant does not even proffer an excuse.

In many FCPA cases involving places very different than the United States, defendants often claim that, in the culture in which they operated, they had no other option and that bribes were extorted from all who wished to do business. Some claim they were ordered to pay the bribes by their superiors or claim confusion about the propriety of their actions. To be clear, none of these excuses excuse anything. However, none of these arguments are even plausibly available to the defendant.

The defendant paid bribes in the United Kingdom, a country in which bribery is unmistakably illegal and, fortunately, rare. The defendant himself handled the relationship with the corrupt official. The bribery was his and Hale’s idea. No one made him do it. The defendant should be sentenced just as if he paid bribes to an officer of the U.S. Air Force. Nothing less will be commensurate with his offense.

As Mike Koehler noted, "Just as it did not issue a release in connection with the Elkin and Green sentences, the DOJ did not issue a release in connection with Smith's sentence."

__________________

Download a copy of the plea agreement in U.S. v. Leo Winston Smith (Case No.: CR 07-69(A) - AG) here.

Download a copy of Leo Winston Smith's sentencing memo here.

Download a copy of the government's reply to Smith's sentencing memo here.

Reader Comments (1)

In my humble opinion, there are three reasons for punishments.

1. To pay for a crime
2. To protect victims from further abuse (keep society safe)
3. To warn others that if they engage in similar acts, they will be punished.

I understand that Leo Winston Smith is old but that doesn't excuse him from owning up to his actions. If he's well enough to commit them, he's well enough to pay for them, not to mention the fact that #3 above was not even enforced.

Just my two cents. Thanks for making this story aware to me.
August 31, 2011 | Unregistered CommenterVince Delmonte

PostPost a New Comment

Enter your information below to add a new comment.

My response is on my own website »
Author Email (optional):
Author URL (optional):
Post:
 
All HTML will be escaped. Hyperlinks will be created for URLs automatically.