The U.S. Justice Department released the below information:
Two former executives of a foreign defense contractor pleaded guilty in federal court today for participating in a conspiracy to submit bogus bids, claims and invoices to the U.S. Navy in an effort to steal tens of millions of dollars as part of a years-long corruption and fraud scheme.
Acting Assistant Attorney General Kenneth A. Blanco of the Justice Department’s Criminal Division, Acting U.S. Attorney Alana W. Robinson of the Southern District of California, Director Dermot F. O’Reilly of the Defense Criminal Investigative Service (DCIS) and Director Andrew L. Traver of the Naval Criminal Investigative Service (NCIS) made the announcement.
Neil Peterson, 39, and Linda Raja, 44, both Singaporean nationals, each pleaded guilty to one count of conspiracy to defraud the United States with respect to claims. Both defendants were arrested by authorities in Singapore at the request of the U.S. government and were extradited on Oct. 28, 2016. Sentencing for Peterson and Raja is set before the Honorable Janis L. Sammartino of the Southern District of California on Aug. 11, 2017.
Peterson and Raja worked for Singapore-based Glenn Defense Marine Asia (GDMA). Peterson served as the Vice President for Global Operations, and Raja served as General Manager for Singapore, Australia and the Pacific Isles. According to their pleas, Peterson and Raja conspired with Leonard Glenn Francis, the owner of GDMA, to defraud the U.S. Navy in order to financially benefit GDMA.
As part of their pleas, Peterson and Raja admitted that they and other members of GDMA’s management team created and submitted fraudulent bids. These bids were either entirely or partially fictitious. This ensured that GDMA’s quote would be selected by the U.S. Navy as the supposed lowest bidder. As a result, GDMA could control and inflate the prices charged to the U.S. Navy without engaging in any competitive bidding, as required.
Additionally, Peterson, Raja admitted that they and others knowingly created fictitious port authorities with fraudulently inflated tariff rates and approved the presentation of these fraudulent documents to the U.S. Navy. As a result, GDMA charged inflated prices to the U.S. Navy, rather than what GDMA actually paid to the port authorities. For example, in October 2012, Peterson and other members of GDMA’s core management team directed that false documents and inflated invoices be presented to the U.S. Navy for the U.S.S. Bonhomme Richard’s visit to Kota Kinabalu, Malaysia. 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 that the U.S. Navy suffered losses exceeding $34.8 million in total, as a result of the scheme.
Twenty U.S. Navy officials have been charged so far in the fraud and bribery investigation. Additionally, to date, five GDMA executives have been charged and pleaded guilty: (1) Alex Wisidagama, (2) Francis, (3) Edmund Aruffo, (4) Peterson and (5) Raja. Wisidagama was sentenced on March 18, 2016, to 63 months in prison and was ordered to pay $34.8 million in restitution to the U.S. Navy. Francis and Aruffo await sentencing.
A criminal complaint is merely an accusation, and the accused is presumed innocent unless proven guilty in a court of law.
The DCIS, NCIS and the Defense Contract Audit Agency are investigating this matter. Assistant Chief Brian R. Young of the Criminal Division’s Fraud Section and Assistant U.S. Attorneys Mark W. Pletcher and Patrick Hovakimian of the Southern District of California are prosecuting the case. The Criminal Division’s Office of International Affairs provided substantial assistance in this matter.
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.