WASHINGTON – A Malaysian contractor at the centre of a corruption scandal rocking the US Navy has pleaded guilty to fraud charges, admitting to bribing officials with cash, prostitutes, Cuban cigars and Kobe beef.
Known as “Fat Leonard” by the US sailors who dealt with him, 50-year-old Leonard Glenn Francis of Singapore-based Glenn Defense Marine (Asia), or GDMA, pleaded guilty in a San Diego federal court on Thursday, confirming he headed a decade-long scheme involving tens of millions of dollars in bribes. GDMA also pleaded guilty to bribery charges.
At the same time, US Navy captain Daniel Dusek also entered a guilty plea to conspiracy to commit bribery, the highest-ranking officer so far to admit wrongdoing in the case.
Four other current and former naval officers have been charged in the scandal.
Dusek, 47, admitted to using his position as a senior officer to ensure ships stopped at ports where Francis’ company operated, and on one occasion arranged for an aircraft carrier strike group to stop at Port Klang, a terminal owned by Francis, officials said.
The plea by “Fat Leonard” represents a coup for prosecutors in the worst scandal to hit the navy in years. It also raised the possibility that more naval officers could be implicated. Prosecutors said the investigation was “ongoing” and that the case was not closed.
Francis was arrested in September 2013 and charged with inflating hundreds of billings. At 1.9m and nearly 160kg, he was known within the navy for hosting dinners at luxury hotels across South-east Asia for senior navy officers.
But even though e-mail obtained by criminal investigators showed several ship crews and contracting officials had complained about his “gold-plated” fees from 2009 to early 2011, the navy still awarded his company US$200 million (S$266 million) in contracts in June 2011, giving him control over servicing warships at many ports in the Pacific.
“It is astounding that Leonard Francis was able to purchase the integrity of navy officials by offering them meaningless material possessions and the satisfaction of selfish indulgences,” US attorney Laura Duffy said.
“In sacrificing their honour, these officers helped Francis defraud their country out of tens of millions of dollars. Now they will be held to account.”
Francis pleaded guilty to bribery, conspiracy to commit bribery and conspiracy to defraud the US. He faces up to 25 years in prison.
He agreed to forfeit US$35 million he made in the scheme and repay the navy whatever amount the court decides.
As part of his guilty plea, he admitted bilking the US military of tens of millions of dollars by routinely overbilling for fuel, tugboat services and sewage disposal.
Naval officers were lavished with gifts, including more than US$500,000 in cash, hundreds of thousands of dollars in prostitution services, travel expenses, luxury hotel stays and spa treatments, lavish meals, “top-shelf” alcohol, Cuban cigars, designer bags, watches, fountain pens, designer furniture, electronics, ornamental swords and handmade ship models, the authorities said.
In return, naval officers provided classified and confidential information, including ship schedules. Francis also secured preferential treatment for his firm in the contracting process.
Sentencing hearings for Francis and Dusek are scheduled for April 3. Francis told prosecutors of seven navy officers he bribed, including Dusek and three others who have entered guilty pleas.
A fifth, commander Michael Vannak Khem Misiewicz, pleaded not guilty and will face trial.
The last two were described as a navy contract specialist and a lieutenant commander.
AGENCE FRANCE-PRESSE, NEW YORK TIMES