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article imageDefense contractor pleads guilty in enormous bribery case

By Megan Hamilton     Jan 17, 2015 in Crime
San Diego - It's a courtroom drama and corruption scandal of epic proportions that has the makings of a good movie and involves a Malaysian defense contractor along with key officials from the U.S. Navy.
The contractor, Leonard Glenn Francis, also known as "Fat Leonard" because of his girth, pleaded guilty in a San Diego federal court on Thursday, admitting that he'd allegedly bribed "scores" of Navy officials with $500,000 in cash, six figures worth of sex with prostitutes, lavish hotels, spa treatments, Kobe beef, Cuban cigars, Spanish suckling pigs and a whole host of other luxury items, The Washington Post reports.
Francis admitted in court that he presided over the corruption scheme that involved his Singapore-based firm, Glenn Defense Marine, for at least a decade.
The burgeoning scandal has escalated into the biggest corruption case in the Navy's history, and Francis admits he bilked the Navy out of tens of millions of dollars by overcharging for food, fuel, and basic services. Several current and former Navy officials have pleaded guilty thus far, and prosecutors are also targeting others, the Post reports.
The investigation, ongoing for several years, spans a dozen countries and is "gathering momentum," U.S. Assistant Attorney Mark Pletcher said, U-T San Diego reported. Authorities, he said, have gathered "terabyte upon terabyte of electronic data."
As part of the plea agreement Francis coughed up seven Navy officials who accepted bribes, including two unnamed individuals — a lieutenant commander and a contract specialist who haven't been charged.
Now the Navy has put more checks in place and is closely scrutinizing its contracts, but questions remain regarding how such a huge scheme that over-billed the Navy by at least $20 million and involved officers who actually went as far as changing the routes of major military ships could happen.
"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, per U-T San Diego.
For 25 years, Francis' company provided fuel, food and other supplies to Navy ships.
In the deal reached with federal prosecutors, Francis and his company will forfeit $35 million in property and other proceeds connected with the alleged corruption, The Malaysian Insider reports. Francis also pleaded guilty on behalf of the firm.
Navy Captain Daniel Dusek also pleaded guilty to bribery on Thursday, and this means that a total of eight have been charged so far, including two Navy commanders.
On Thursday, prosecutors said that Dusek admitted that he used his position as deputy director of operations for the 7th Fleet to give Francis a hand.
"In return, Francis plied him with meals, alcohol, entertainment, gifts, dozens of nights at luxury hotels and the services of prostitutes," Duffy said in a statement on Thursday. Dusek, she added, is the highest-ranking naval officer charged thus far in the scandal, she said.
Court records say that in October 2010, Dusek convinced the Navy to send an aircraft carrier and its strike group to a port in Malaysia that was largely controlled by Glenn Defense Marine, The Washington Post reports. By doing this, the company was able to inflate invoices and overcharge the Navy for a variety of services.
Dusek, who was then working as deputy director of operations for the 7th Fleet, funneled classified information to Francis regarding ship movements on dozens of occasions, thus helping the company to gouge the Navy even further, the records show.
Francis called Dusek "a golden asset" in an email to another company executive, and noted that Dusek could "drive the big decks" (aircraft carriers) "into our fat revenue" ports, the records say.
Pletcher declined to say whether more indictments are forthcoming, but he hinted broadly that additional Navy personnel may be investigated, the Insider reports.
"Francis maintained corrupt relations with scores of Navy officials," Pletcher said.
Eight people have been charged thus far and three of the people, including Francis, having worked with Glenn Defense Marine Asia, while the other five are with the Navy, the Insider reports.
The Navy's Top Brass are also dealing with the after effects of the scandal.
A Navy official said that Vice admiral Ted Branch, director of Naval Intelligence and Rear Admiral Bruce Loveless, director of Intelligence Operations, haven't been charged or accused in the case, but they have lost access to classified information as the investigation continues.
The unnamed contract specialist, a woman who is a civilian official based in Singapore for 20 years lived it up with a huge travel expense account which she used to visit Bali, Bangkok, Dubai, Turkey, and Greece, Francis' plea agreement states, per The Washington Post. In exchange, she worked as a mole for Francis' company and handed over proprietary contract information while also advocating on the firm's behalf.
The scandal became public in September 2013 after federal agents enticed Francis to a hotel in San Diego and arrested him in a sting operation.
Navy officials say they began scrutinizing Francis in May 2010 but he was repeatedly able to scuttle criminal investigators by bribing a senior agent with the Naval Criminal Investigative Service, who provided him with sensitive files and helped him cover his tracks, the Post reports.
Initially Francis fought the charges against him, but he has since agreed to cooperate with prosecutors.
U-T San Diego reports that Francis, 50, faces up to 25 years in prison and is scheduled to be sentenced in April.
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