US Navy graft scandal nets 8 more officials

USS Blue Ridge is the the command ship of the US Seventh Fleet that is based in Japan. The recent indictments in the "Fat Leonard" bribery case are related to offences that the accused had committed while they were assigned to this fleet. The charges
USS Blue Ridge is the the command ship of the US Seventh Fleet that is based in Japan. The recent indictments in the "Fat Leonard" bribery case are related to offences that the accused had committed while they were assigned to this fleet. The charges include accepting bribes in the form of lavish gifts, prostitutes and luxury hotel stays.PHOTO: U.S. NAVY
Loveless is also accused of obstructing the ongoing probe.
Loveless is also accused of obstructing the ongoing probe.

Retired admiral one of those accused of taking bribes from S'pore-based defence dealer

WASHINGTON • The United States Justice Department has unsealed a fresh indictment charging eight current and former navy officials - including an admiral - with corruption and other crimes in the "Fat Leonard" bribery case, escalating an epic scandal that has dogged the navy for the past four years.

The charges cover a period of eight years, from 2006 through 2014. The navy personnel are accused of taking bribes in the form of lavish gifts, prostitutes and luxury hotel stays courtesy of Leonard Glenn Francis, a Singapore-based defence contractor who has already pleaded guilty to defrauding the navy.

In exchange, according to federal prosecutors, the officials provided Francis with classified or inside information that enabled his firm, Glenn Defence Marine Asia, to gouge the navy out of tens of millions of dollars.

Among those charged were Bruce Loveless, a retired rear-admiral who was a senior navy intelligence officer at the Pentagon, several navy captains and a retired colonel from the Marine Corps.

Loveless was taken into custody at his home in Coronado on Tuesday and made his first appearance in federal court later in the day.

His LinkedIn profile says that he retired last October after serving three decades as an intelligence officer in the navy. He did not immediately respond to a message seeking comment.

The years-long bribery scheme "amounts to a staggering degree of corruption by the most prominent leaders of the Seventh Fleet", said Ms Alana W. Robinson, the acting US attorney in San Diego, where the charges were brought.

"He directly and indirectly, corruptly demanded, sought, received, accepted, and agreed to receive and accept things of value... including entertainment, hotel stays and the services of prostitutes," the indictment stated.

In addition to Loveless, others charged in the indictment are three retired captains: David Lausman, Donald Hornbeck and David Newland; an active-duty captain, James Dolan; a retired Marine colonel, Enrico de Guzman; an active-duty commander, Stephen F. Shedd; and Robert Gorsuch, a retired chief warrant officer. None could immediately be reached for comment.

  • Thousands spent in alleged bribes

  • US$50,000: Shopping, dining and luxury hotel rooms during a port visit to Singapore in February 2007. (US$1 today is about S$1.40)

    US$50,000: Multi-day party with prostitutes at the Shangri-La Hotel in Manila in May 2008.

    The group, hosted by Leonard Glenn Francis, allegedly drank the hotel's entire supply of Dom Perignon champagne.

    US$25,000: Watches.

    US$18,371: Extravagant dinner in a private room at the Petrus restaurant overlooking Hong Kong harbour.

    The eight-course meal featured black truffle soup, rock lobster salad, Osetra caviar, pan-seared duck liver with pear and sunchoke, Dover sole, grilled wagyu beef tenderloin, fine cheeses and baked Alaska for dessert. Each course was paired with wine or champagne.

    US$13,000: Culinary internship at the Chalet Suisse restaurant in Kuala Lumpur.

    US$2,000: Boxes of Cohiba cigars.

    US$2,000: Bottles of cognac.

    US$600 per night: Hotel rooms at JW Marriott in Hong Kong during a four- day visit in January 2008.

    Feb 2007: Francis allegedly hosted another sex party for officers in the MacArthur Suite of the Manila hotel. During the party, "historical memorabilia related to General Douglas MacArthur were used by the participants in sexual acts", according to the indictment.

    March 2007: Meal at Oak Door restaurant in Tokyo included foie gras, lobster Thermidor, Sendai tenderloin, cognac, cigars and for dessert, Liberte Sauvage, the winning cake at the Coupe du monde de la patisserie, a prestigious international baking contest.

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All were charged with offences stemming from deployments to Asia while they were assigned to the Seventh Fleet, based in Japan.

The indictment brings the total number of people charged with crimes in the Fat Leonard investigation to 27. Prosecutors say the case is still unfolding and that more than 200 people have come under scrutiny.

The years-long bribery scheme "amounts to a staggering degree of corruption by the most prominent leaders of the Seventh Fleet", said Ms Alana W. Robinson, the acting US attorney in San Diego, where the charges were brought.

The officers "actively worked together as a team to trade secrets for sex, serving the interests of a greedy foreign defence contractor, and not those of their own country", Ms Robinson said.

The indictment dates Loveless' involvement in the scheme to 2007, when he was a Navy captain involved in assessing foreign intelligence threats for the Seventh Fleet.

The indictment also accuses Loveless of obstructing the bribery investigation by denying knowledge of the scheme. Asked by Navy investigators in 2013 whether he had ever received anything of value from Francis, he responded, "never", prosecutors said.

And, he said that he did not recall ever staying in a hotel room that he had not paid for, the prosecutors said, despite evidence that Francis had paid the bill for numerous stays for him and others at lavish hotels around Asia where ships from the Seventh Fleet were docked.

Another one-star admiral, Robert Gilbeau, was charged earlier in the case. Francis pleaded guilty in 2015 in San Diego, as have 10 former military officers previously charged in the case.

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A version of this article appeared in the print edition of The Straits Times on March 16, 2017, with the headline 'US Navy graft scandal nets 8 more officials'. Print Edition | Subscribe