Two former executives of foreign defense contractor Glenn Defense Marine Asia (GDMA) were sentenced on August 12, 2107 for conspiring to submit bogus claims and invoices to the U.S. Navy in an effort to win contracts and overcharge the U.S. Navy by tens of millions of dollars as part of a years-long corruption and fraud scheme.
The case is the latest in a series of convictions spanning more than two years and involving Leonard Glenn Francis, the former CEO of GDMA, a defense contracting firm based in Singapore. Francis’ reputation for corruption and bribery in recent years has led him to be nicknamed “Fat Leonard.” (See The Washington Post article, “The Man Who Seduced the 7th Fleet,” here.)
In the latest conviction, Neil Peterson, 39, and Linda Raja, 44, both of Singapore, were sentenced to 70 and 46 months, respectively, by U.S. District Judge Janis L. Sammartino of the Southern District of California. Both worked as chief deputies for GDMA, which was owned by “Fat Leonard” Francis. Peterson served as the vice president for global operations for GDMA and Raja served as GDMA’s general manager for Singapore, Australia and the Pacific Isles.
Both defendants were arrested by authorities in Singapore at the request of the U.S. government and were extradited on Oct. 28, 2016. They each pleaded guilty in May 2017 to one count of conspiracy to defraud the United States with respect to claims.
According to admissions made as part of Peterson’s and Raja’s plea agreements, they and other members of GDMA’s management team created and submitted fraudulent bids that were either entirely fictitious, contained falsified prices supposedly from actual businesses, or fraudulently stated that the business shown on the letterhead could not provide the items or services requested. In this manner, Peterson, Raja and other members of GDMA’s core management team could ensure that GDMA’s quote would be selected by the U.S. Navy as the supposed low bidder. GDMA could thus control and inflate the prices charged to the U.S. Navy without any true, competitive bidding, as required, they admitted.
Peterson and Raja admitted that they and other members of the GDMA management team knowingly created and approved fictitious port authorities with fraudulently inflated port tariff rates, and approved the presentation of such fraudulent documents to the U.S. Navy. GDMA thus charged inflated prices to the U.S. Navy, rather than what GDMA actually paid to the bona fide port authorities.
For example, Peterson and Raja admitted that for the visit of the U.S.S. Bonhomme Richard to Kota Kinabalu, Malaysia, in or about October 2012, under the direction of Peterson and other members of GDMA’s core management team, false documents and inflated invoices were presented to the U.S. Navy. The full amount billed to the U.S. Navy for this visit was $1,232,858, of which approximately $877,413 was fraudulently inflated, Peterson and Raja admitted.
Peterson and Raja admitted that losses to the U.S. Navy exceeded $34,800,000 as a result of this scheme.
So far, 17 of 27 defendants charged in the U.S. Navy bribery and fraud scandal have pleaded guilty. All defendants are presumed innocent unless and until convicted beyond a reasonable doubt in a court of law.
The DCIS, NCIS and the Defense Contract Audit Agency are continuing to investigate.
See previous articles on this topic here: http://contractingacademy.gatech.edu/tag/fat-leonard/
According to court records and evidence presented at trial, Raushi J. Conrad served as the Director of Systems Operation and Security within the Bureau of Industry and Security (BIS), a branch of the U.S. Department of Commerce. In that position, Conrad was designated to oversee and manage a project whereby computer files were transferred from an old BIS computer network that had been infected by a virus to a new, uninfected network. Conrad was also to ensure that the transferred files were free of viruses and, in some instances, retained the full functionality of the files that had resided on the old network.
Moskov pled guilty in the U.S. District Court for the District of Columbia to charges of conspiracy to defraud the United States and making false statements to law enforcement. The plea agreement, which is subject to Court approval, requires the Court to impose a sentence within the range of no prison time to a year and a day in prison. Sentencing is scheduled for August 28, 2017.
