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November 16, 2018 By AMK

Captain from Georgia is latest Navy officer caught in ‘Fat Leonard’ corruption

The 350-pound Leonard Glenn Francis — known in Navy circles as “Leonard the Legend” for his wild-side lifestyle — spent decades cultivating relationships with Navy officers, many of whom developed a blind spot to his fraudulent ways.  In the past three years, 33 defendants have been charged and 22 have pleaded guilty, many admitting to accepting things of value from Francis — also known as “Fat Leonard” — in exchange for helping the contractor win and maintain contracts and overbill the Navy by millions of dollars.

On Tuesday, Nov. 13, 2018, another Navy captain pleaded guilty to criminal conflict of interest charges and a former Navy master chief was sentenced to 17 months in prison today on corruption charges.  The defendants are among the latest U.S. Navy officials to plead guilty and be sentenced in the expansive corruption and fraud investigation involving foreign defense contractor “Fat Leonard” Francis and his Singapore-based ship husbanding company, Glenn Defense Marine Asia (GDMA).

Jeffrey Breslau of Cumming, Georgia pleaded guilty to one count of criminal conflict of interest before U.S. District Judge Janis Sammartino of the Southern District of California.  Breslau was charged in September 2018.  Retired Master Chief Ricarte Icmat David of Concepcion, Tarlac, Philippines, was sentenced by Judge Sammartino, who also ordered him to serve a year of supervised release and pay restitution of $30,000.  David was charged in August 2018 and pleaded guilty in September to one count of conspiracy to commit honest services wire fraud.

According to admissions made as part of his guilty plea, from October 2009 until July 2012, Breslau was a captain in the U.S. Navy assigned as director of public affairs for the U.S. Pacific Fleet, headquartered in Pearl Harbor, Hawaii.  As part of his duties, Breslau was involved in devising the Navy’s public affairs communications strategy, and provided public affairs guidance to Pacific Fleet components and other Navy commands.  From August 2012 until July 2014, Breslau was assigned to the commanding officer for the Joint Public Affairs Support Element in Norfolk, Virginia, where he was responsible for leading joint crisis communications teams.

Breslau admitted that from March 2012 until September 2013, while serving in the Navy, he provided Francis with public relations consulting services, including providing advice on how to respond to issues and controversies related to Francis’s ship husbanding business with the Navy.  These included issues related to port visit costs, allegations of malfeasance such as the unauthorized dumping of waste, disputes with competitors, and issues with Pacific Fleet and contracting personnel.  During the course of his consulting agreement with Francis, Breslau authored, reviewed or edited at least 33 separate documents; authored at least 135 emails providing advice to Francis; provided at least 14 instances of “talking points” in advance of meetings between Francis and high ranking Navy personnel; and “ghostwrote” numerous emails on Francis’s behalf to be transmitted to Navy personnel.  During the course of this consulting agreement, Francis paid Breslau approximately $65,000 without Breslau disclosing the agreement to the Navy, Breslau admitted.

As part of his guilty plea, David admitted that he was assigned various logistics positions with the Navy’s Seventh Fleet, including with the Fleet Industrial Supply Center in Yokosuka, Japan from June 2001 to July 2004; on the USS Essex from July 2004 to August 2007; on the USS Kitty Hawk from September 2007 to August 2008; and on the USS George Washington from September 2008 to July 2010.  In these positions, David was responsible for ordering and verifying goods and services for the ships on which he served, including from contractors during port calls.  Throughout this period, David received from Francis various things of value, including five star hotel rooms during every port visit, he admitted.

David further admitted that he repeatedly facilitated fraud by allowing Francis and GDMA to inflate the husbanding invoices to bill for services never rendered.  For example, David instructed Francis to inflate invoices for the USS Essex’s anticipated November 2007 port visit to the Philippines.  As David transitioned to a new position aboard the nuclear aircraft carrier USS Kitty Hawk, on or about May 8, 2008, Francis’s company paid approximately 84,637.00 Hong Kong Dollars (HKD) for hotel reservations at the Grand Hyatt Hong Kong for Navy personnel assigned to the USS Kitty Hawk including 10,396 HKD for David’s four-night stay in a Harbor View Room, David admitted.

Francis pleaded guilty in 2015 to bribery and fraud charges, admitting that he presided over a massive, decade-long conspiracy involving “scores” of U.S. Navy officials, tens of millions of dollars in fraud and millions of dollars in bribes and lavish gifts, including luxury travel, airline upgrades, five-star hotel accommodations, top-shelf alcohol, the services of prostitutes, Cuban cigars, Kobe beef and Spanish suckling pigs.

The case was investigated by DCIS, NCIS and the Defense Contract Audit Agency.

For earlier reports on this scandal, see: https://contractingacademy.gatech.edu/?s=fat

Source: https://www.justice.gov/opa/pr/former-us-navy-captain-pleads-guilty-and-former-master-chief-petty-officer-sentenced-sweeping

Filed Under: Government Contracting News Tagged With: abuse, acquisition workforce, bid rigging, bribery, conspiracy, corruption, DCAA, DCIS, DoD, DOJ, ethics, Fat Leonard, fraud, GDMA, graft, greed, investigation, Justice Dept., kickback, Navy, NCIS, scandal, waste

November 8, 2017 By AMK

‘Fat Leonard’ probe expands to ensnare more than 60 admirals

The “Fat Leonard” corruption investigation has expanded to include more than 60 admirals and hundreds of other U.S. Navy officers under scrutiny for their contacts with a defense contractor in Asia who systematically bribed sailors with sex, liquor and other temptations, according to the Navy.

Most of the admirals are suspected of attending extravagant feasts at Asia’s best restaurants paid for by Leonard Glenn Francis, a Singapore-based maritime tycoon who made an illicit fortune supplying Navy vessels in ports from Vladivostok, Russia to Brisbane, Australia. Francis also was renowned for hosting alcohol-soaked, after-dinner parties, which often featured imported prostitutes and sometimes lasted for days, according to federal court records.

The 350-pound Francis, also known in Navy circles as “Leonard the Legend” for his wild-side lifestyle, spent decades cultivating relationships with officers, many of whom developed a blind spot to his fraudulent ways. Even while he and his firm were being targeted by Navy criminal investigators, he received VIP invitations to ceremonies in Annapolis and Pearl Harbor, where he hobnobbed with four-star admirals, according to photographs obtained by The Washington Post.

Keep reading this article at: https://www.washingtonpost.com/investigations/fat-leonard-scandal-expands-to-ensnare-more-than-60-admirals/2017/11/05/f6a12678-be5d-11e7-97d9-bdab5a0ab381_story.html

Filed Under: Government Contracting News Tagged With: abuse, acquisition workforce, bid rigging, bribery, conspiracy, corruption, DCAA, DCIS, DoD, DOJ, ethics, Fat Leonard, fraud, GDMA, graft, greed, investigation, Justice Dept., kickback, Navy, NCIS, scandal, waste

November 7, 2017 By AMK

Federal probe into Puerto Rico power scandal expands

A second federal contract with a company hired to rebuild Puerto Rico’s all but collapsed power grid is coming under scrutiny, drawing the attention of federal investigators and even members of Congress even as most of the hurricane-ravaged island remains without power.

The news of a second faulty contract is also raising questions about the contracting process for the island’s government-owned power company, the Puerto Rican Electric Power Authority (PREPA).

Puerto Rico’s crumbling, aging electrical grid was at the heart of the island’s crippling debt and infrastructure problems even before Hurricanes Irma and Maria slammed into it over a month ago. But now, in the wake of recent scandals over contractors hired to fix that very grid, some experts expect the timeline for full recovery to last well into next year.

Keep reading this article at: http://www.govexec.com/contracting/2017/11/federal-probe-puerto-rico-power-scandal-expands/142268/

Filed Under: Government Contracting News Tagged With: DHS, disaster recovery, FEMA, PREPA, Puerto Rico, scandal

December 27, 2013 By AMK

Navy Secretary Mabus expects bribery scandal to widen

Navy Secretary Ray Mabus said Friday that he bluntly told criminal investigators to pursue a widening bribery scandal “wherever it leads” and that he expects more people to get swept up in a case that has already tarred several senior officers and exposed an international, multimillion-dollar fraud scheme.

“I certainly don’t think we’ve seen the end of it,” Mabus told reporters at the Pentagon in his first public comments on the scandal since it came to light in September. “I would rather get bad headlines than let bad people get away.”

Mabus, the Navy’s top civilian official since 2009, spoke a day after he held an unusual video conference with the Navy’s fleet commanders and other admirals around the world to emphasize the need to uphold ethical standards and prevent contracting fraud. With the scandal showing no sign of abating, he also has ordered several reviews and an audit into how the Navy pays for port services.

The Navy has been tarnished by a succession of embarrassing revelations over the past three months about its relationship with a major foreign defense contractor, Singapore-based Glenn Defense Marine Asia, that has provided port services to U.S. ships and submarines in the Pacific for a quarter-century.

Keep reading this article at: http://www.washingtonpost.com/world/national-security/navy-secretary-mabus-expects-bribery-scandal-to-widen/2013/12/20/c85f8ece-6990-11e3-8b5b-a77187b716a3_story.html 

 

Filed Under: Government Contracting News Tagged With: bribery, classified information, ethics, False Claims Act, fraud, invoice, misconduct, Navy, scandal

November 4, 2013 By AMK

Asian defense contractor linked to Navy bribery scandal

The U.S. Navy is being rocked by a bribery scandal that federal investigators say has reached high into the officer corps and exposed a massive overbilling scheme run by an Asian defense contractor that provided prostitutes and other kickbacks.

Among those arrested on corruption charges are a senior agent for the Naval Criminal Investigative Service and a Navy commander who escaped Cambodia’s “killing fields” as a child only to make a triumphant return to the country decades later as the skipper of a U.S. destroyer. The investigation has also ensnared a Navy captain who was relieved of his ship’s command this month in Japan.

The chief executive of the Singapore-based defense contractor, Glenn Defense Marine Asia, and another company official were arrested last month at a San Diego harborside hotel after federal investigators lured them to the United States by arranging a sham meeting with Navy officials, according to court records and people involved in the case.

The unfolding investigation is shaping up as the biggest fraud case in years for the Navy. Federal prosecutors allege that Glenn Defense Marine, which has serviced and supplied Navy ships and submarines at ports around the Pacific for a quarter-century, routinely overbilled for everything from tugboats to fuel to sewage disposal.

Keep reading this article at: http://www.washingtonpost.com/world/national-security/senior-officer-ncis-agent-are-among-those-arrested-in-navy-bribery-scandal/2013/10/19/e9a1e9b6-3753-11e3-bda2-e637e3241dc8_story.html

Filed Under: Government Contracting News Tagged With: bribery, contract payments, corruption, DoD, fraud, kickback, Navy, NCIS, overbilling, scandal, termination

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