UNITED STATES DISTRICT COURT CENTRAL DISTRICT OF CALIFORNIA

Transcription

1 Case 8:08-cr AG Document 19 Filed 11/03/08 Page 1 of 10 Page ID #: Michael J. Lightfoot (State Bar No ) Stephen B. Sadowsky (State Bar No ) CROWELL & MORING LLP 800 Wilshire Boulevard, Suite 500 Los Angeles, CA Telephone: (213) Facsimile: (213) mlightfoot@crowell.com ssadowsky@crowell.com Attorneys for Martin Eric Self UNITED STATES DISTRICT COURT CENTRAL DISTRICT OF CALIFORNIA United States of America, Plaintiff, v. Martin Eric Self, Defendant. CASE NO. SA CR DEFENDANT MARTIN ERIC SELF S MEMORANDUM RE SENTENCING; EXHIBITS Date: November 17, 2008 Time: 3:30 p.m. Place: Courtroom 10D; Honorable Andrew J. Guilford Defendant Martin Eric Self, through his undersigned counsel, hereby respectfully submits this Sentencing Position Memorandum, with the attached exhibits, for the Court s consideration in connection with his sentencing. / / / / / / / / / / / / 1 DEFENDANT MARTIN ERIC SELF S MEMORANDUM RE SENTENCING; EXHIBITS

2 Case 8:08-cr AG Document 19 Filed 11/03/08 Page 2 of 10 Page ID #: DEFENDANT MARTIN ERIC SELF S SENTENCING POSITION I. Introduction Martin Self has pled guilty to two counts of violations of the Foreign Corrupt Practices Act. At the time of the offenses in 2000 and 2002, Mr. Self was the President of Pacific Consolidated Industries ( PCI ), a company started and run by his father, Richard Self, and his father s contemporary associates over the years. As we will describe in more detail in this Memorandum, the elder Self was diagnosed with terminal colorectal cancer in As he got progressively sicker, he selected his son to run the business. Shortly thereafter, Martin Self, as President of PCI, entered into a marketing agreement with a person understood to be the relative of an employee of the United Kingdom Ministry of Defense ( UKMOD ). Between 2000 and 2002, Martin approved the payment of approximately $70,000 to that relative. It turned out that the purpose of the payment was for PCI to obtain and retain the benefits of the UK contract for spare parts. As the Probation Officer found at p. 3 of her letter to this Court: It appears that Self reluctantly assumed the helm of his father s business when his father was diagnosed with a terminal illness and that he relied heavily on long-term employees to maintain the business. While Self should have reviewed and fully understood why a marketing agreement and subsequent checks were being issued to the relative of a civil servant who worked for an entity with whom Self s business had a contract, it does not appear that he solicited the arrangement on his own accord. The Government and Mr. Self have agreed to a stipulated guideline level of 11 (Presentence Report (hereinafter, PSR ) at 3) (8-14 months). There are, additionally, highly significant facts concerning Mr. Self s background, the circumstances involved in this matter, his financial and personal contributions to 1 DEFENDANT MARTIN ERIC SELF S MEMORANDUM RE SENTENCING; EXHIBITS

3 Case 8:08-cr AG Document 19 Filed 11/03/08 Page 3 of 10 Page ID #: community needs going back long before this case and the fact that his conduct here represents aberrant behavior on his part considering the character and integrity he has demonstrated throughout his lifetime. In fact, the Probation Officer views Self s conduct in this matter as aberrant behavior because he has no criminal conduct, he was not the mastermind of the offense, he has maintained steady employment and he has a history of prior good works. See Probation Officer s letter to the Court, at p. 5, in which she recommends a one-level departure on that basis, bringing the guideline level down to 10 (6-12 months, Zone B allowing the imposition of a probationary sentence). We urge that these factors are especially pertinent under 18 U.S.C. 3553(a) as they significantly inform the nature and circumstances of the offense and the history and characteristics of Mr. Self, and warrant a sentence of probation. II. Statement of Facts. A. Background Information Mr. Self is the 52 year old husband and father of three who resides in Orange, California. His oldest child, Laura, 23, graduated from Loyola Marymount University in 2007 and teaches at a parochial high school in Lakewood, California. His older son Richard, is a senior at the University of San Diego. His younger son, Andrew, just started at Virginia Military Institute; he plans a career in the military. As Martin and his wife, Karen, relate in their letters to this Court, Mr. Self grew up in the shadow of his father, Richard Self, who was a brilliant engineer in the field of fluid dynamics. In the mid-1980 s, Richard Self founded Pacific Consolidated Industries ( PCI ), a company which designed and delivered systems for the production of oxygen and nitrogen for military aviation and medical applications. Richard Self was an iconic figure with a very strong libertarian streak who guided PCI from a small company with a handful of employees supplying liquid oxygen products to the Air Force into a business concern which, 2 DEFENDANT MARTIN ERIC SELF S MEMORANDUM RE SENTENCING; EXHIBITS

4 Case 8:08-cr AG Document 19 Filed 11/03/08 Page 4 of 10 Page ID #: by the late 1990 s had over 100 employees and was supplying sophisticated liquid oxygen and nitrogen products to domestic and foreign military establishments around the world. While the company was started by Richard Self, two others played an important role in its continuing development until it was sold in late One was Robert Zarate, responsible for design and engineering; the other was Lee Smith, 1/ in charge of sales. As Mr. Zarate explained in his letter to this Court, Richard Self brought his son, Marty, on board with the understanding that the latter would eventually run the business. Unfortunately, as we have explained, Richard Self was diagnosed with cancer in He moved Marty into the position of President of the company about that time. Richard s health gradually worsened. His son s duties expanded exponentially. As Karen Self explained in her letter to the Court (Exh. 2): The reins of the company were thrown, not handed, to Marty. Martin Self described the situation he found himself in his letter to this Court (Exh. 1): 1/ While this news was obviously distressing to our family and business colleagues, it also led to a dramatic change in my position at the company. Until this time, my responsibilities were limited. The best description of my role was that of an apprentice to my father and Lee Smith. Now, I had to assume the responsibility of President of PCI. In addition, I would now be required to personally guarantee the dramatically larger credit facilities ($6,000,000) that would be required to facilitate our ability to deliver on the US Air Force contract over the next five years. Plus, I had to try to safeguard the jobs of over 100 longtime employees, placate the venture capital Smith is presently under indictment charged with foreign corrupt practice and tax violations. His trial is set in this Court for May, DEFENDANT MARTIN ERIC SELF S MEMORANDUM RE SENTENCING; EXHIBITS

5 Case 8:08-cr AG Document 19 Filed 11/03/08 Page 5 of 10 Page ID #: groups that had invested millions of dollars in PCI based upon my father s reputation, and had to over see the adoption of staggering new quality assurance programs being imposed by the FDA, ISO, Boeing and the US military. B. Conduct Relating to the Offense. As others have explained in letters to this Court, Martin Self took on the mantle of running the company with some hesitancy. As others have also stated, Lee Smith, a contemporary of the senior Self, was viewed by the company employees as actually running the company. (See letter of Robert Zarate, Exh. 8.) PCI had entered into contracts with UKMOD since Mr. Smith was the PCI official who primarily dealt with the UK representatives. From time to time the UKMOD representatives, including Michael Hale, would come to PCI to inspect PCI s quality control systems. According to Mr. Zarate, who was in charge of the interface with foreign inspection teams, there was never any suggestion that any of the UK representatives were receiving kickbacks. To the contrary, the conduct of Hale and others suggested just the opposite. Soon after becoming the President of PCI, Martin Self signed contracts with Mark Brown for consulting services. Brown was the stepson of Michael Hale. Over three years, Mr. Brown was paid approximately $70,000 under those contracts. As Mr. Self acknowledged in the plea agreement and in his letter to this Court, he became suspicious of the fees paid to Mr. Brown but took no steps to investigate the matter. He had other major problems at PCI to deal with and was more concerned that he live up to the promise he made to his father that the employees of PCI be cared for. Mr. Self learned for the first time in 2008 from the United States Attorney s Office that Brown forwarded these payments to his stepfather, Michael Hale, the UKMOD representative. / / / / 4 DEFENDANT MARTIN ERIC SELF S MEMORANDUM RE SENTENCING; EXHIBITS

6 Case 8:08-cr AG Document 19 Filed 11/03/08 Page 6 of 10 Page ID #: C. Service to the Community. The Probation Officer reports, at p. 3 of her letter to this Court, that Mr. Self reluctantly admitted that he was actively involved in community service and donated generously to various charities. Her suggestion that Mr. Self, over his lifetime, has been quick to help others and slow to take credit is tellingly accurate. As he told the Probation Officer, he considers himself merely a steward of his possessions while he is on earth and that since he cannot take these things with him when he dies, he should give back to society. PSR, at p. 10. His wife advised that her husband takes after his mother who was and is a consummate volunteer. This character trait is further reflected in the letter from Martin Stringer, the former Vice Principal and Athletic Director at Mater Dei High School in Santa Ana, who describes Mr. Self as one who remains in the background, shunning the spotlight and attention that others devour. (See Exh. 3, letter from Martin Stringer.) Mr. Self gives hours per week of his own time to organizations such as the Rotary Club, Giving Children Hope, and Mary s Kitchen. (See Exhs. 1 and 11) He sponsors inner city youth, both local and international, in sporting events, and makes donations to charities such as Soccer for Hope and ministries of friends who are involved in such things as providing free wheelchairs and arranging aid shipments to foreign countries. PSR at p. 10. Mr. Self and his wife have given financial assistance over the years to : San Antonio Catholic Church; Free Wheelchair Mission Rotary Club of Orange; Rotary Foundation (Through the Rotary, Mr. Self has given time and funds to Snowball Express supporting wives and children of servicemen killed in Afghanistan and Iraq. (See Exh. 4, letter from former Orange County Supervisor, William G. Steiner); Orange Library; 5 DEFENDANT MARTIN ERIC SELF S MEMORANDUM RE SENTENCING; EXHIBITS

7 Case 8:08-cr AG Document 19 Filed 11/03/08 Page 7 of 10 Page ID #: Assistance League of Orange; Mater Dei High School; Pocket Testament League; Relationship 180; Brunswick Club for Boys and Girls; Union Rescue Mission Breast Cancer Angels; Priority Living; Door of Faith Orphanage; Make-a-Wish Foundation; American Heart Association; Children s Hospital of Orange County; Goodwill Industries; Giving Children Hope; Salvation Army; and Toys for Tots. See Exhs. 1 through 5, 9 through 11. Mr. Self s generosity and volunteer work long predate his involvement in this case. One program, ten years old now, is co-sponsored by The Brunswick Club (of London, England) for Young People and Mater Dei High School in Orange County. Thirty or so inner city teenagers from London are flown to Orange County, put up in private homes and engaged in soccer activities. Not only have Mr. and Mrs. Self taken the program s students into their home over the years, but, according to Mr. Stringer, Mr. Self has quietly provided money and travel fees to assure the success of the program over the years. The following is a sample of comments from three 17 year old students who stayed with the Selfs last summer: 6 DEFENDANT MARTIN ERIC SELF S MEMORANDUM RE SENTENCING; EXHIBITS

8 Case 8:08-cr AG Document 19 Filed 11/03/08 Page 8 of 10 Page ID #: Marty Self is one of the nicest men that I have ever met and am ever likely to meet. He enabled me to have a truly special holiday with the way he treated me, he looked after us like we were his own family and letting us into his wonderful home is something that I cannot be grateful enough for. To really understand how good a man Marty Self is you have to experience it for yourself which I have been lucky enough to do caring, funny, unique, amazing and overall a top top bloke. (Archie Hamilton, aged 17) He (Marty) always made me feel welcome in my time and words can not describe how brilliant of a person he is. He cared and treated me like one of his own children and I truly could not have asked for anything more. He was like a father to me and I really do not know how to thank him so much. Generous, kind, funny, loving and caring are only a little part of his character a lovely person in so many ways I could not have asked for a better dad to stay with and the same goes for the rest of his family to, they are all such wonderful people and they will always be in my heart and I will never forget them. (Charlie Nichols, aged 17) Marty was a great down to earth person who made me feel right at home. He gave me advice about sport [sic] and just everyday life. I couldn t have stayed with a better man, he acted like a father figure to us all and was a pleasure to stay with. (Jimmy Majinya, aged 17) See Exh. 5, letter from Danny Volino, Brunswick Club Manager. Clearly, Martin Self s charitable and good works are extraordinary in both nature and scope. As reflected in the from-the-heart expressions of gratitude of Messrs. Hamilton, Nichols, and Majinya of the Brunswick Club, Mr. Self s community activities are not the detached acts of charity one might ordinarily 7 DEFENDANT MARTIN ERIC SELF S MEMORANDUM RE SENTENCING; EXHIBITS

9 Case 8:08-cr AG Document 19 Filed 11/03/08 Page 9 of 10 Page ID #: expect from a wealthy business executive. They are, in a very real way, hands-on personal sacrifices, which have had a dramatic and positive impact on the lives of others. United States v. Cooper, 394, F. 3d 172, 177 (3d Cir. 2005) (affirming a 4-level downward departure on account of the defendant s good works). III. Conclusion. After considering the nature and circumstance of the offense and the history and characteristics of the defendant, the Court is directed to impose a sentence sufficient but not greater than necessary to achieve the statutory sentencing goals. See 18 U.S.C. 3553(a)(2). It is respectfully submitted that Martin Self s life time of good works and charitable deeds speaks more loudly and to the point than his aberrant failure to investigate an ambiguous matter years ago. As the several letters submitted to the Court clearly state, Mr. Self is a humble and compassionate man of the highest character and integrity. See Exhs. 3 through 11 (letters from Martin Stringer, William G. Steiner, Danny Volino, Milford Dahl, Rev. Eric Nachtrieb, Robert Zarate, Richard Stewart, John Henry, and John Ditty). Under these circumstances, a probationary sentence would be appropriate and fully justified. Respectfully submitted, Michael J. Lightfoot Stephen B. Sadowsky CROWELL & MORING LLP / S / Michael J. Lightfoot Michael J. Lightfoot Attorneys for Martin Eric Self DEFENDANT MARTIN ERIC SELF S MEMORANDUM RE SENTENCING; EXHIBITS

10 Case 8:08-cr AG Document 19 Filed 11/03/08 Page 10 of 10 Page ID #: PROOF OF SERVICE State of California, County of Los Angeles At the time of service, I was over 18 years of age and not a party to this action. I am employed in the County of Los Angeles, State of California. My business address is 800 Wilshire Boulevard, Suite 500, Los Angeles, CA On November 3, 2008, I served true copies of the foregoing document(s) described as DEFENDANT MARTIN ERIC SELF S MEMORANDUM RE SENTENCING; EXHIBITS on the interested parties in this action as follows: JONATHAN E. LOPEZ U.S. Dept of Justice Criminal Division, Fraud Section Bond Building Room 3122 Washington, DC (202) / (202) (Fax) JENNIFER L. WAIER Assistant United States Attorney Office of the US Attorney 411 West Fourth Street, Suite 8000 Santa Ana, CA (714) jonathan.lopez@usdoj.gov USACAC.SACriminal@usdoj.gov BY CM/ECF NOTICE OF ELECTRONIC FILING: I caused said document(s) to be served by means of this Court's electronic transmission of the Notice of Electronic Filing through the Court's transmission facilities, to the parties and/or counsel who are registered CM/ECF Users set forth in the service list obtained from this Court. I declare under penalty of perjury under the laws of the State of California that the foregoing is true and correct. Executed on November 3, 2008, at Los Angeles, California / S / Lucy DelValle Lucy DelValle

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