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Retired U.S. Navy Rear Admiral Bruce Loveless and eight other high-ranking Navy officers have been charged in a federal indictment with accepting luxury travel, elaborate dinners and services of prostitutes from foreign defense contractor Leonard Francis, the former Chief Executive Officer (CEO) of Glenn Defense Marine Asia (GDMA), in exchange for classified and internal U.S. Navy information.

The Justice Department’s Criminal Division,  the Defense Criminal Investigative Service (DCIS), and the Naval Criminal Investigative Service (NCIS) made the announcement yesterday (Mar. 14, 2017).  This action is the latest in a string of guilty pleas, indictments and convictions – spanning more than three years – related to alleged fraudulent activities of GDMA and its chief executive, Leonard Glenn “Fat Leonard” Francis.

To date, a total of 25 named individuals have been charged in connection with the corruption and fraud investigation into GDMA, a defense-contracting firm based in Singapore.  Of those charged, 20 are current or former U.S. Navy officials and five are GDMA executives. So far, 13 have pleaded guilty while several other cases are pending.

Francis’ reputation for corruption and bribery in recent years has led him to be nicknamed “Fat Leonard.”  (For background, see The Washington Post article, “The Man Who Seduced the 7th Fleet,” here.)

The allegations contained in the latest indictments expose flagrant corruption among several senior officers previously assigned to the U.S. Navy’s Seventh Fleet.  Nine defendants were arrested yesterday on various charges including bribery, conspiracy to commit bribery, honest services fraud, obstruction of justice and making false statements to federal investigators when confronted about their actions.

Four of the defendants are retired captains: David Newland, 60, of San Antonio, Texas; James Dolan, 58, of Gettysburg, Pennsylvania; David Lausman, 62, of The Villages, Florida; and Donald Hornbeck, 56, a resident of the United Kingdom.  The other defendants arrested yesterday include: Colonel Enrico Deguzman, 48, of Honolulu, Hawaii; retired Chief Warrant Officer Robert Gorsuch, 48, of Virginia Beach, Virginia; retired Rear Admiral Bruce Lovelace, 48, of San Diego, California; active duty Lieutenant Commander Stephen Shedd, 48, of Colorado Springs, Colorado; and active duty Commander Mario Herrera, 48, of Helotes, Texas.

According to the indictment, the Navy officers allegedly participated in a bribery scheme with “Fat” Leonard Francis, in which the officers accepted travel and entertainment expenses, the services of prostitutes and lavish gifts in exchange for helping to steep lucrative contracts to Francis and GDMA – and to sabotage competing defense contractors.  The defendants allegedly violated many of their sworn official naval duties, including duties related to the handling of classified information and duties related to the identification and reporting of foreign intelligence threats. According to the indictment, the defendants allegedly worked in concert to recruit new members for the conspiracy, and to keep the conspiracy secret by using fake names and foreign email service providers. According to the indictment, the bribery scheme allegedly cost the Navy – and U.S. taxpayers – tens of millions of dollars.

In addition to the nine defendants charged today, the 11 Navy officials charged so far in the fraud and bribery investigation are: Admiral Robert Gilbeau, retired Captain Michael Brooks, Commander Jose Luis Sanchez, Captain Daniel Dusek, former Department of Defense civilian employee Paul Simpkins, Commander Michael Misiewicz, Lieutenant Commander Gentry Debord, Lieutenant Commander Todd Malaki, Petty Officer First Class Daniel Layug, Naval Criminal Investigative Service Supervisory Special Agent John Beliveau, and Commander Bobby Pitts.

• Gilbeau, Brooks, Sanchez, Dusek, Simpkins, Misiewicz, Debord, Malaki, Layug and Beliveau have pleaded guilty.
• Gilbeau, Brooks, and Sanchez await sentencing.
• On March 25, 2016, Dusek was sentenced to 46 months in prison and ordered to pay a $70,000 fine and $30,000 in restitution to the Navy.
• On Dec. 2, 2016, Simpkins was sentenced to 72 months in prison.
• On April 29, 2016, Misiewicz was sentenced to 78 months in prison and ordered to pay a $100,000 fine and $95,000 in restitution to the Navy.
• On Jan. 12, 2017, Debord was sentenced to 30 months in prison and ordered to pay a $15,000 fine and $37,000 in restitution to the Navy.
• On Jan. 29, 2016, Malaki was sentenced to 40 months in prison and ordered to pay a $15,000 fine and $15,000 in restitution to the Navy.
• On Jan. 21, 2016, Layug was sentenced to 27 months in prison and a $15,000 fine.
• On Oct. 14, 2016, Beliveau was sentenced to 12 years in prison and ordered to pay $20 million in restitution to the Navy.
• Pitts was charged in May 2016 and his case is pending.

Additionally, to date, five GDMA executives have been charged: Alex Wisidagama, Francis, Edmund Aruffo, Neil Peterson, and Linda Raja.  Of these:

• Three have pleaded guilty: Wisidagama, Francis and Aruffo.
• On March 18, 2016, Wisidagama was sentenced to 63 months in prison and ordered to pay $34.8 million in restitution to the Navy.
• Francis and Aruffo await sentencing.
• Peterson and Raja were extradited to the United States from Singapore in September 2016 and their cases remain pending.

The charges and allegations contained in an indictment are merely accusations. The defendants are presumed innocent unless and until proven guilty.

DCIS, NCIS and the Defense Contract Audit Agency are investigating the case.

Anyone with information relating to fraud or corruption should contact the NCIS anonymous tip line at www.ncis.navy.mil or the DOD Hotline at www.dodig.mil/hotline or call (800) 424-9098.

Source: https://www.justice.gov/opa/pr/us-navy-admiral-and-eight-other-officers-indicted-trading-classified-information-massive

A U.S. Navy Lieutenant Commander was sentenced on Jan. 12, 2017 to 30 months in prison for accepting cash, hotel expenses and the services of a prostitute from foreign defense contractor Glenn Defense Marine Asia (GDMA) in exchange for classified Navy information.

This action is the latest in a 3-year string of guilty pleas, indictments and convictions related to alleged fraudulent activities of GDMA and its chief executive, Leonard Glenn “Fat Leonard” Francis.

GDMA won contracts from the Navy worth more than $200 million since 2009.  The contracts were for port services to U.S. Navy ships and submarines throughout the Pacific.

Francis’ reputation for corruption and bribery in recent years has led him to be nicknamed “Fat Leonard.”  (For background, see The Washington Post article, “The Man Who Seduced the 7th Fleet,” here.)

The Jan. 12 sentencing stems from Gentry Debord’s October 2016 guilty plea to one count of conspiracy to commit bribery.  He admitted that in 2007 he began a corrupt relationship with Francis.   In addition to his 30-month prison sentence, U.S. District Judge Janis L. Sammartino ordered Debord to pay a $15,000 fine and $37,000 in restitution to the Navy.

As part of the scheme, between 2007 and 2013, Debord accepted cash, luxury hotels and the services of prostitutes from Francis in exchange for proprietary Navy information that benefitted GDMA.  During this period, Debord served as a supply officer aboard the U.S.S. Essex and later as a logistics officer for the Pacific Fleet.

Debora further admitted that he:

• provided Francis and others with internal, proprietary U.S. Navy information;
• directed Francis and GDMA to inflate invoices to reflect services not rendered;
• advocated for the U.S. Navy to procure items from GDMA under its husbanding contracts; and
• used his position and influence in the U.S. Navy to advocate for and advance GDMA’s interests.

To date, a total of 16 individuals have been charged in connection with the scheme.  Of those, 10 have pleaded guilty, including Debora, Admiral Robert Gilead, Captain Michael Brooks, Commander Bobby Pitts, Captain Daniel Dusk, Commander Michael Mickiewicz, Lt. Commander Todd Malaki, Commander Jose Luis Sanchez and U.S. Petty Officer First Class Daniel Layup.

• On Jan. 21, 2016, Layup was sentenced to 27 months in prison and a $15,000 fine.
• On Jan. 29, 2016, Malaki was sentenced to 40 months in prison and to pay $15,000 in restitution to the Navy and a $15,000 fine.
• On March 25, 2016, Dusk was sentenced to 46 months in prison and to pay $30,000 in restitution to the Navy and a $70,000 fine.
• On April 29, 2016, Mickiewicz was sentenced to 78 months in prison and to pay a fine of $100,000 and to pay $95,000 in restitution to the Navy.
• Beliveau was sentenced on Oct. 14, 2016, to 12 years in prison and to pay $20 million in restitution.
• Simpkins was sentenced on Dec. 2, 2016, to 72 months in prison.
• Brooks, Gilbeau and Sanchez await sentencing.
• Pitts was charged in May 2016 and his case is pending.

The Defense Criminal Investigative Service, the Navy Criminal Investigative Service, and the Defense Contract Audit Agency are continuing the investigation of this matter.

Source: https://www.justice.gov/opa/pr/navy-officer-sentenced-30-months-expanding-bribery-and-fraud-investigation

For Fat Leonard, conning the U.S. Navy was a big piece of cake.

The Navy allowed the worst corruption scandal in its history to fester for several years by dismissing a flood of evidence that the rotund Asian defense contractor was cheating the service out of millions of dollars and bribing officers with booze, sex and lavish dinners, newly released ­documents show.

The Singapore-based contractor, Leonard Glenn Francis, found it especially easy to outwit the Naval Criminal Investigative Service (NCIS), the renowned law enforcement agency that has inspired one of the longest-running cop shows on television.

Starting in 2006, in response to a multitude of fraud complaints, NCIS opened 27 separate investigations into Francis’s company, Glenn Defense Marine Asia. In each of those instances, however, NCIS closed the case after failing to dig up sufficient evidence to take action against the firm, according to hundreds of pages of law enforcement records ­obtained by The Washington Post under the Freedom of ­Information Act.

Known as Fat Leonard for his 350-pound physique, Francis held lucrative contracts to resupply U.S. warships and submarines in ports throughout Asia. He was also legendary within the Navy for throwing hedonistic parties, often with prostitutes, to entertain ­sailors.

Keep reading this article at: https://www.washingtonpost.com/investigations/navy-repeatedly-dismissed-evidence-that-fat-leonard-was-cheating-the-7th-fleet/2016/12/27/0afb2738-c5ab-11e6-85b5-76616a33048d_story.html

A former U.S. Navy supervisory contracting officer was sentenced to 72 months in prison on Friday (Dec. 2, 2016) for accepting bribes in exchange for steering contracts to the president and chief executive officer of a defense contractor. 

Paul Simpkins, 62, of Haymarket, Virginia, was sentenced for his role in steering contracts to Leonard Francis, the president and CEO of Glenn Defense Marine Asia (GDMA).  Simpkins was also ordered to pay $450,000 in restitution, to forfeit $150,000 and pay a $50,000 fine.  Simpkins pleaded guilty on June 23 to conspiracy to commit bribery and bribery.

Francis’ reputation for corruption and bribery in recent years has led him to be nicknamed “Fat Leonard.”  (For background, see The Washington Post article, “The Man Who Seduced the 7th Fleet,” here.)

“With premeditation beyond that of many of the other defendants in this case, Simpkins methodically plotted to receive hundreds of thousands of dollars in bribe money and launder it through a secret foreign bank account in someone else’s name,” said U.S. Attorney Laura E. Duffy.  “We tip our hat to the investigators who discovered this crime and brought the perpetrator to justice.  With the lengthy prison sentence imposed today, we take another step on this long journey toward deterring future misconduct and restoring the public’s trust in our most storied institutions.”

According to admissions made as part of his plea agreement, Simpkins held a number of managerial-level contracting positions throughout the federal government, including positions as a supervisory contract specialist at the U.S. Navy Regional Contracting Center in Singapore from April 2005 through June 2007; a contracting officer assistant director with the Executive Office of U.S. Attorneys in Washington from June 2007 to December 2007; and as a supervisory manager in the Department of Defense’s (DoD) Office of Small Business Programs beginning in December 2007.  Simpkins admitted that from approximately May 2006 to September 2012, he participated in a bribery scheme with Francis in which he accepted travel and entertainment expenses, the services of prostitutes and at least $300,000 in exchange for helping to steer lucrative U.S. Navy contract to Francis and GDMA.  Simpkins provided Francis with internal, proprietary U.S. Navy information and intervened on GDMA’s behalf in contract disputes, he admitted.

To conceal the true nature of wire transfers, Simpkins used an email account belonging to his mistress to advise Francis of the routing and account information for a bank account belonging to his wife.  In another email, Simpkins asked Francis to provide “some clean, disease free” women and in another email Simpkins advised Francis that he “will arrive in Singapore on 11 September.  Whats [sic] the plan to meet up and maybe do some honey’s? [sic]”

Simpkins used his influence within the U.S. Navy to benefit GDMA, including by helping GDMA to secure valuable ship husbanding contracts to service U.S. Navy vessels in Thailand and the Philippines, he admitted.  In addition, Simpkins interceded on GDMA’s behalf in contract disputes with the U.S. Navy.  In one incident in 2006, for example, Simpkins’s subordinate recommended that GDMA’s husbanding contract in Thailand not be extended due to “many exceedingly high cost” items and concluded that the contract should be re-opened to competitive bidding, which would have allowed other firms to bid on the contract.  Simpkins overruled the subordinate and extended GDMA’s contract, he admitted.  In another example, Simpkins instructed U.S. Navy officials in Hong Kong to discontinue the use of meters that monitored the volume of liquid waste that GDMA removed from U.S. Navy ships under its husbanding contracts.  In June 2006, Simpkins instructed a U.S. Navy official not to review invoices that GDMA submitted in connection to a recent port call in Hong Kong after Francis complained that U.S. Navy personnel were asking questions, Simpkins admitted.

To date, a total of 16 individuals have been charged in connection with the GDMA corruption and fraud investigation.

Francis has pleaded guilty and awaits sentencing.  As part of his plea agreement, Francis admitted to over-billing the U.S. Navy for over $35 million on ship husbanding contracts by, among other means, reporting that GMDA had removed more liquid waste from ships than it actually did.  Four other GDMA executives have also been charged: Alex Wisidagama, Ed Aruffo, Neil Peterson and Linda Raja.

• Wisidagama has pleaded guilty and was sentenced on March 18 to 63 months in prison and $34.8 million in restitution to the Navy.
• Aruffo has pleaded guilty and awaits sentencing.
• Peterson’s and Raja’s cases are pending.

The remaining 11 of the 16 individuals charged are current or former U.S. Navy officials, including:

• Admiral Robert Gilbeau,
• Lt. Commander Gentry Debord,
• Commander Bobby Pitts,
• Captain Daniel Dusek,
• Commander Michael Misiewicz,
• Lt. Commander Todd Malaki,
• Commander Jose Luis Sanchez,
• former NCIS Supervisory Special Agent John Beliveau II,
• Petty Officer First Class Daniel Layug, and
• Paul Simpkins, a former DoD civilian employee who oversaw contracting in Singapore.

Gilbeau, Debord, Dusek, Misiewicz, Malaki, Beliveau, Sanchez and Layug have also pleaded guilty in connection with the scheme.  On Jan. 21, Layug was sentenced to 27 months in prison and a $15,000 fine; on Jan. 29, Malaki was sentenced to 40 months in prison and to pay $15,000 in restitution to the Navy and a $15,000 fine; on March 25, Dusek was sentenced to 46 months in prison and to pay $30,000 in restitution to the Navy and a $70,000 fine; on April 29, Misiewicz was sentenced to 78 months in prison and to pay a fine of $100,000 and to pay $95,000 in restitution to the Navy; and on Oct. 14, 2015, Beliveau was sentenced to serve 144 months in prison and ordered to pay $20 million in restitution to the Navy.  Gilbeau and Sanchez await sentencing.  Pitts was charged in May 2016 and his case remains pending.

Those with information relating to fraud, corruption or waste in government contracting should contact the NCIS anonymous tip line at www.ncis.navy.mil or the DOD Hotline at www.dodig.mil/hotline, or call (800) 424-9098.

Source: https://www.justice.gov/opa/pr/former-supervisory-contracting-officer-sentenced-72-months-prison-part-expanding-navy-bribery

The massive contract fraud and corruption scandal linked to Leonard Glenn Francis, the former CEO of Glenn Defense Marine Asia (GDMA), a defense contracting firm based in Singapore, just landed a Naval Criminal Investigative Service (NCIS) supervisory special agent in prison for for 144 months.

John Bertrand Beliveau II was sentenced on Friday, Oct. 14, 2016 for disclosing sensitive law enforcement reports to Leonard Francis, a target of a criminal fraud investigation into favors he made in exchange for cash, luxury travel and the services of prostitutes.  Francis’ reputation for corruption and bribery in recent years has led him to be nicknamed “Fat Leonard.”  (For background, see The Washington Post article, “The Man Who Seduced the 7th Fleet,” here.)

According to admissions made as part of his plea agreement, Beliveau helped former GDMA CEO “Fat Leonard” Francis perpetrate a massive fraud scheme on the U.S. Navy by providing information that allowed Francis to avoid, stall and thwart criminal investigations into misconduct by GDMA.  As part of the sentence handed down by U.S. District Judge Janis L. Sammartino, Beliveau was also ordered to pay $20 million in restitution to the Navy.

According to his plea agreement, Beliveau acknowledged that he regularly searched confidential NCIS databases for reports of investigations related to Francis and GDMA.  Over the course of years, he helped Francis avoid multiple criminal investigations by providing copies of these reports.  These reports not only tipped off Francis that he was the target of a criminal investigation, but provided sensitive law enforcement information about the ongoing investigation, including:

• the identities of the subjects of the investigations,
• information about witnesses, including identifying information about cooperating witnesses and their testimony,
• the particular aspects of GDMA’s billings that were of concern to the investigations,
• the fact that the investigations had obtained numerous email accounts and the identities of those accounts,
• the reports to prosecutors and their interactions with the investigations, and
• planned future investigative activities.

Beliveau admitted that he attempted to cover up his involvement by asking Francis to delete incriminating emails and deactivate an email account, and warned Francis about indictments and a warrant on his email account.  Beliveau also admitted that he counseled Francis on how to perpetuate his fraud scheme and evade detection.  In July 2011, Beliveau advised Francis to respond to the pending NCIS investigation into GDMA’s submission of a fraudulent claim to the U.S. Navy for dockage and wharfage fees for certain U.S. Navy ship visits to Thailand.

In return for providing him with information, Francis provided Beliveau with envelopes containing cash, luxury travel from Virginia to Singapore, the Philippines and Thailand.  On many occasions, beginning in 2008 and continuing through 2012, while Beliveau was posted in Singapore, Francis provided him with prostitutes, lavish dinners, entertainment and alcohol at high-end nightclubs.  The tab for each of these outings routinely ran into the thousands of dollars.

So far, a total of 16 individuals have been charged in connection with the GDMA corruption and fraud investigation.  Including Beliveau, 11 of those are current or former U.S. Navy officials, including Admiral Robert Gilbeau, Captain (ret.) Michael Brooks, Lt. Commander Gentry Debord, Commander Bobby Pitts, Captain Daniel Dusek, Commander Michael Misiewicz, Lt. Commander Todd Malaki, Commander Jose Luis Sanchez, Petty Officer First Class Daniel Layug and Paul Simpkins, a former DoD civilian employee who oversaw contracting in Singapore.  Details include:

• Gilbeau, Debord, Dusek, Misiewicz, Malaki, Beliveau, Sanchez, Layug and Simpkins have pleaded guilty.
• On Jan. 21, 2016, Layug was sentenced to 27 months in prison and a $15,000 fine.
• On Jan. 29, 2016, Malaki was sentenced to 40 months in prison and to pay $15,000 in restitution to the Navy and a $15,000 fine.
• On March 25, 2016, Dusek was sentenced to 46 months in prison and to pay $30,000 in restitution to the Navy and a $70,000 fine.
• On April 29, 2016, Misiewicz was sentenced to 78 months in prison and to pay a fine of $100,000 and to pay $95,000 in restitution to the Navy.
• Gilbeau, Sanchez and Simpkins also await sentencing.
• Brooks and Pitts were charged in May 2016 and their cases are pending.

Also charged are five GDMA executives: Francis, Alex Wisidagama, Ed Aruffo, Neil Peterson and Linda Raja.

• Wisidagama has pleaded guilty and was sentenced on March 18, 2016, to 63 months in prison and $34.8 million in restitution to the Navy.
• Francis and Aruffo have pleaded guilty and await sentencing.
• Peterson’s and Raja’s cases are pending.

The Defense Criminal Investigative Service (DCIS), the Defense Contract Audit Agency (DCAA) and the NCIS are continuing their investigation.

Anyone with information relating to fraud or corruption should contact the NCIS anonymous tip line at www.ncis.navy.mil or the DoD hotline at www.dodig.mil/hotline, or call (800) 424-9098.

Source: https://www.justice.gov/opa/pr/former-ncis-supervisory-special-agent-sentenced-12-years-prison-taking-bribes-defense