U.S. Navy Admiral Pleads Guilty To Lying To Federal Investigators About His Relationship With Foreign Defense Contractor In Massive Navy Bribery And Fraud Investigation

The U.S. Justice Department released the below information:

U.S. Navy Rear Admiral Robert Gilbeau (seen in the above photo) pleaded guilty in federal court to charges that he lied to federal investigators to conceal his illicit years-long relationship with Leonard Glenn Francis, owner of Glenn Defense Marine Asia (GDMA), the foreign defense contractor at the center of a massive bribery and fraud scandal.

Assistant Attorney General Leslie R. Caldwell of the Justice Department’s Criminal Division, U.S. Attorney Laura E. Duffy of the Southern District of California, Acting Director Dermot O’Reilly of the Department of Defense’s (DOD) Defense Criminal Investigative Service (DCIS), Director Andrew Traver of the Naval Criminal Investigative Service (NCIS) and Director Anita Bales of Defense Contract Audit Agency (DCAA) made the announcement.

Gilbeau, 55, of Burke, Virginia, pleaded guilty to one count of making a false statement.  He was charged by information today and is the highest-ranking U.S. Navy officer to be charged in the investigation so far.  Gilbeau is scheduled to be sentenced on Aug. 26, 2016, before U.S. District Judge Janis L. Sammartino of the Southern District of California. 

In his plea agreement, Gilbeau admitted that he lied when he told agents from DCIS and NCIS that he had never received any gifts from Francis, the owner of Singapore-based GDMA.  Gilbeau also admitted that he lied when he told investigators that he “always paid for half of the dinner” when he and Francis met about three times a year.  Gilbeau further admitted that when he became aware that Francis and others had been arrested in connection with the fraud and bribery offenses in September 2013, he destroyed documents and deleted computer files.  Francis previously pleaded guilty to plying scores of other U.S. Navy officials with gifts such as luxury travel, meals, cash, electronics, parties and prostitutes.

According to his plea, in 2003 and 2004, Gilbeau was the supply officer on the USS Nimitz, where he was responsible for procuring all goods and services necessary for operation of the ship.  He later served as head of the Tsunami Relief Crisis Action Team in Singapore, heading the Navy’s logistics response to the Southeast Asia tsunami in December 2004, and in June 2005, Gilbeau was assigned to the office of the Chief of Naval Operations as the head of aviation material support, establishing policies and requirements for budgeting and acquisitions for the Navy’s air forces, according to the plea agreement.

In August 2010, after he was promoted to admiral, Gilbeau assumed command of the Defense Contract Management Agency International, where he was responsible for the global administration of DOD’s most critical contracts performed outside the United States, according to admissions made in connection with his plea.

“As a flag level officer in the U.S. Navy, Admiral Gilbeau understood his duty to be honest with the federal agents investigating this sprawling bribery scheme,” said Assistant Attorney General Caldwell.  “By destroying documents and lying about the gifts that he received, Admiral Gilbeau broke the law and dishonored his uniform.”

“Of those who wear our nation’s uniform in the service of our country, only a select few have been honored to hold the rank of Admiral – and not a single one is above the law,” said U.S. Attorney Laura Duffy.  “Admiral Gilbeau lied to federal agents investigating corruption and fraud, and then tried to cover up his deception by destroying documents and files.  Whether the evidence leads us to a civilian, to an enlisted service member or to an admiral, as this investigation expands we will continue to hold responsible all those who lied or who corruptly betrayed their public duties for personal gain.”

“The guilty plea of Rear Admiral Robert Gilbeau is an unfortunate example of a dishonorable naval flag officer who has betrayed his shipmates, the U.S. Navy and his country,” said Acting Director O’Reilly.  “Admiral Gilbeau's guilty plea should be a resounding message that DCIS, Naval Criminal Investigative Service and the Department of Justice will continue to investigate and seek to prosecute any individual, regardless of position or rank, who would put our mission of ‘Protecting America’s Warfighters’ at risk.”

“This investigation demonstrates that corruption, conspiracy and the release of sensitive information puts Department of the Navy personnel and resources at risk,” said Director Traver.  “And in concert with our partner agencies, NCIS remains resolved to follow the evidence, to help hold accountable those who make personal reward a higher priority than professional responsibility.”

“DCAA is proud to stand in partnership with our law enforcement allies and make a meaningful contribution to the outcome in this egregious case,” said Director Bales.  “It is very disappointing that this high-ranking individual lost sight of his responsibility as a government official.  We look forward to continuing our support of this significant investigation.”

Including Gilbeau, 14 individuals have been charged in connection with this scheme; of those, nine have pleaded guilty, including U.S. Navy Captain (Select) Michael Misiewicz, U.S. Navy Capt. Daniel Dusek, Lieutenant Commander Todd Malaki, NCIS Special Agent John Beliveau, Commander Jose Luis Sanchez and U.S. Navy Petty Officer First Class Dan Layug.  Former Department of Defense Senior Executive Paul Simpkins awaits trial.  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 18, 2016, Alex Wisidagama, a former GDMA employee, was sentenced to 63 months and to pay $34.8 million in restitution to the Navy; 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; and on April 29, 2016, Misiewicz was sentenced to 78 months in prison and to pay a fine of $100,000 and to forfeit $95,000 in proceeds for the scheme.  Retired Navy Captain Michael Brooks, Commander Bobby Pitts and Lieutenant Commander Gentry Debord were charged by a federal grand jury on May 25, 2016, and their cases remain pending.  GDMA, the corporate entity, was also charged and has pleaded guilty.  Francis and Ed Aruffo, a former GDMA employee, have both pleaded guilty and await sentencing.

NCIS, DCIS and DCAA are conducting the investigation.  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. 

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.

Note: You can also read my Q&A with investigative reporter Craig Whitlock, author of Fat Leonard: How One Man Bribed, Bilked and Seduced the U.S. Navy via the blink below:

  Paul Davis On Crime: My Counterterrorism Magazine Q&A With Craig Whitlock, The Author Of “Fat Leonard: How One Man Bribed, Bilked and Seduced the U.S. Navy”  

Fat Leonard Case: Leonard Glenn Francis Sentenced To 15 Years In Prison For Massive Bribery, Fraud And Disappearance

The U.S. Justice Department released the below information today:

SAN DIEGO – Leonard Glenn Francis (seen in the above photo), mastermind of an unprecedented bribery and fraud scheme targeting the U.S. Navy, was sentenced in federal court today to 180 months in prison and ordered to pay $20 million in restitution to the Navy and a $150,000 fine. Francis was also ordered to forfeit $35 million in ill-gotten proceeds from his crimes.

Francis’ sentence reflects admissions in his first guilty plea in 2015 concerning bribery and fraud, his extensive cooperation with the government, and his guilty plea today for failing to appear for his original sentencing hearing in 2022. U.S. District Judge Janis L. Sammartino handed down a 164-month sentence for bribery and fraud and 16 months for failing to appear, to be served consecutively.

Francis admitted today in his second plea agreement that he fled the country to avoid his sentencing hearing in September 2022. Around September 4, 2022, while he was on house arrest, Francis cut off a GPS monitor he was required to wear and disappeared, first fleeing to Mexico, then Cuba, and ultimately, Venezuela. He was later arrested in Venezuela and brought back to the U.S. on December 20, 2023.

Francis, 60, a Malaysian citizen most recently living in Singapore, was initially arrested in San Diego on September 16, 2013, and remained in pretrial custody until December 18, 2017, when the court granted his request for release pending sentencing due to a medical condition. Francis served four years and three months in custody before he was released on bond and ordered into house arrest. He remained on bond under the supervision of U.S. Pretrial Services for almost five years, from December 17, 2017, until he fled the U.S. on September 4, 2022. He has remained in custody in the U.S. since his return on December 20, 2023. Based on today’s sentence and the court’s finding that Francis has so far served 2,333 days of his sentence - including time spent in custody in Venezuela at the request of the U.S. government - Francis has an estimated 8.5 years remaining.

According to admissions in his initial 2015 plea agreement, and other court documents, Francis and his company, Glenn Defense Marine Asia, or GDMA, which provided services to U.S. Navy ships in Asia Pacific ports, gave co-conspirators millions of dollars in things of value, including over $500,000 in cash; hundreds of thousands of dollars in the services of prostitutes and associated expenses; hundreds of thousands of dollars in travel expenses, including airfare, often first or business class, luxurious hotel stays, incidentals, and spa treatments; hundreds of thousands of dollars in lavish meals, top-shelf alcohol and wine, and entertainment; and hundreds of thousands of dollars in luxury gifts, including designer handbags and leather goods, watches, fountain pens, Kobe beef, Spanish suckling pigs, designer furniture, Cuban cigars, consumer electronics, ornamental swords, and hand-made ship models.

Francis admitted that in return, U.S. Navy personnel and command staff advocated on behalf of Francis and his company during the procurement process and provided classified information about various U.S. Navy ships’ port visits, proprietary U.S. Navy information such as details about competitors’ bids for U.S. Navy contracts, and information about Naval Criminal Investigative Service and U.S. Navy investigations into GDMA’s practices, among other things.

In his 2015 plea agreement, Francis also admitted to defrauding the U.S. Navy of tens of millions of dollars by routinely overbilling for goods and services provided, including fuel, tugboats, and sewage disposal.

GDMA the corporation was also sentenced today to five years of probation and ordered to pay a $36 million fine.

According to the government’s sentencing memo, Francis’ scheme to defraud the United States over many years and the entrenched bribery and corruption he fostered within the U.S. Navy were aggravated and egregious. By contrast, once caught, he pleaded guilty, and cooperated extensively with authorities.

Over the course of several years, Francis met with government investigators dozens of times to discuss unprecedented levels of corruption within the U.S. Navy. Francis provided detailed information about hundreds of Sailors, from petty officers to admirals, and turned over financial records, photographs, receipts and Navy contracting documents. Corroborated information from Francis substantially assisted the United States in its investigation.

“Mr. Francis’ sentencing brings closure to an expansive fraud scheme that he perpetrated against the U.S. Navy with assistance from various Navy officials. This fraud conspiracy ultimately cost the American taxpayer millions of dollars and weakened the public’s trust in some of our Navy’s senior leaders. Mr. Francis’ actions not only degraded the 7th Fleet’s readiness but shook the Fleet’s trust in its leadership who furthered his corrupt practices,” said Kelly P. Mayo, the Director of the U.S. Department of Defense Office of Inspector General, Defense Criminal Investigative Service (DCIS). “The exhaustive joint investigation exemplifies the lengths DCIS and its investigative partners will go to in order to pursue justice for the American taxpayer and our warfighters.  DCIS will continue to protect our nation’s precious resources so they are not lost to illicit schemes that only serve one’s greed and self-aggrandizement to the detriment of our national security.”

“Leonard Francis put the safety of our warfighters and Department of Navy assets at risk,” said NCIS Director Omar Lopez. “He disregarded the law and lined his pockets by bribing U.S. Navy officials and others to exploit sensitive national security information. NCIS remains committed to protecting Department of the Navy personnel and resources. As we reach the final sentencing in this complex and intensive procurement fraud investigation that spanned over a decade, I want to thank the countless NCIS professionals and partner agencies involved.”

Note: You can also read my Counterterrorism magazine Q&A with Craig Whitlock, the author of Fat Leonard: How One Man Bribed, Bilked, and Seduced the U.S. Navy, via the below link:

Paul Davis On Crime: My Counterterrorism Magazine Q&A With Craig Whitlock, The Author Of “Fat Leonard: How One Man Bribed, Bilked and Seduced the U.S. Navy” 

Fat Leonard: U.S. Navy Bribery Fugitive 'Fat Leonard' Francis Back In San Diego; Appears in Federal Court

The U.S. Justice Department released the below information:

SAN DIEGO – Leonard Glenn Francis (seen in the above photo), the infamous fugitive who 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 gifts, appeared in federal court today for the first time since he cut off his electronic monitoring bracelet and absconded from house arrest in San Diego in September 2022.

At the hearing, the government asked U.S. District Judge Janis L. Sammartino to set a new sentencing date immediately to avoid delays, but the judge postponed a decision based on a request by Francis’ legal team to withdraw from the case in the aftermath of his disappearance. The judge set a status hearing for February 8, 2024, at 9 a.m.

Francis, who fled the United States before he could be sentenced, was returned to the United States from Venezuela as part of a prisoner swap on December 20, 2023. From Venezuela, he arrived in the Southern District of Florida and appeared in federal court the next day in Miami, where he was ordered removed to the Southern District of California. Francis arrived in San Diego on January 3.

Francis, the owner and chief executive of Glenn Defense Marine Asia, which provided services to U.S. Navy ships in ports in the Asia-Pacific region, pleaded guilty to bribery and fraud charges in 2015. As a result of the federal investigation, more than 30 U.S. Navy officials and associates pleaded guilty.

“Leonard Francis is no longer on the run. He is on the hook,” said U.S. Attorney Tara K. McGrath. “Mr. Francis never should have fled the United States while he was waiting to be sentenced. In fact, he was ordered by a federal judge not to do so. Now that he is back in San Diego, Mr. Francis will be held fully accountable for his crimes.”

DEFENDANTS              Case Number 13-CR- 4287   

Leonard Glenn Francis    Age: 59,  Singapore

SUMMARY OF CHARGES

Conspiracy to Commit Bribery, in violation of 18 U.S.C. § 371. Maximum penalty five years in prison, $250,000 fine or twice the gross pecuniary gain or loss from the offense, whichever is greater;

Bribery, in violation of 18 U.S.C. § 201. Maximum 15 years in prison, $250,000 fine or twice the gross pecuniary gain or loss from the offense, whichever is greater. Mandatory restitution.

Conspiracy to Defraud the United States, in violation of in violation of 18 U.S.C. sec. 371. Maximum penalty five years in prison $250,000 fine or twice the gross pecuniary gain or loss from the offense, whichever is greater. Mandatory restitution.

INVESTIGATING AGENCIES

Defense Criminal Investigative Service

Naval Criminal Investigative Service

Defense Contract Audit Agency 

You can read my Counterterrorism magazine piece on the Fat Lonard case via the below link:

Paul Davis On Crime: My Piece On The 'Fat Leonard' U.S. Navy Bribery And Fraud Case 

U.S. Marshals Offering Reward For Information Leading To The Arrest of Fugitive Leonard "Fat Leonard" Francis

The U.S. Marshals Service released the below:

 

San Diego, CA – The U.S. Marshals Service and Naval Criminal Investigative Service are offering a combined reward of up to $40,000 ($20,000 from each agency) for any information leading up to the arrest of fugitive Leonard Francis. 

Also known as “Fat Leonard,” the military contractor who pleaded guilty in 2015 of bribing Navy officials and was on home-confinement in San Diego weeks before he was scheduled to be sentenced in a $35 million bribery scandal. He allegedly cut off his GPS monitor and left his home on the morning of Sept. 4. 

On September 4, 2022, at 7:35 a.m. U.S. Pretrial Services, the federal agency in charge of monitoring his home confinement, received an alert that Francis’ GPS ankle monitor was being tampered with. U.S. Pretrial Services then attempted to contact Francis with no success. U.S. Pretrial Services followed up by contacting Francis’ defense attorney. His attorney stated they would attempt to contact Francis and have him contact U.S. Pretrial Services.

At 1:28 p.m. Francis’ defense attorney advised there was no answer. The San Diego Police Department was then contacted by Francis’ legal team to conduct a welfare check. At approximately 2:42 p.m., the San Diego Police Department arrived at the residence, and concluded that Francis did not appear to be home.

At approximately 3:30 p.m. U.S. Pretrial Services contacted the U.S. Marshals for assistance in locating Francis.

At approximately 4 p.m. members of the San Diego Fugitive Task Force went to Francis’ residence to locate him. After announcing themselves, task force officers made entry into the residence through an unlocked door. After a thorough check of the residence, officers were unable to locate Francis. Officers were able to locate the GPS ankle monitor that had been cut off. 

His current whereabouts are unknown.

Anyone with information on Francis’ whereabouts should contact the U.S. Marshals at 877-926-8332.  Anonymous tips may also be submitted via the USMS Tips App.  

The U.S. Marshals Service is responsible for over 84,000 fugitive arrests annually, arresting both federal fugitives as well as supporting state and local law enforcement agencies with apprehending dangerous fugitives across the nation and internationally

You can also read my Counterterrorism magazine piece on the Fat Leonard U.S. Navy bribery and fraud scandal via the below link:

 Paul Davis On Crime: My Piece On The 'Fat Leonard' U.S. Navy Bribery And Fraud Case 

U.S. Marshals Seeking Bribery Fugitive Leonard Francis, AKA 'Fat Leonard'

San Diego, CA – The U.S. Marshals San Diego Fugitive Task Force is actively searching for Leonard Francis, also known as “Fat Leonard,” the military contractor who pleaded guilty in 2015 of bribing Navy officials and was on home-confinement in San Diego weeks before he was scheduled to be sentenced in a $35 million bribery scandal, allegedly cut off his GPS monitor and left his home on the morning of Sept. 4. 

U.S. Pretrial Services, the federal agency in charge of monitoring his home confinement, received an alert that his GPS ankle monitor was being tampered with. Upon following their protocols, Pretrial Services notified the U.S. Marshals about the GPS alert. 

Members of the San Diego Fugitive Task Force went to Francis’ residence, in an attempt to locate him. After announcing themselves, task force officers made entry into the residence through an unlocked door. After a thorough check of the residence, officers were unable to locate Francis. Officers were able to locate the GPS ankle monitor that had been cut off.
His current whereabouts are unknown.

Anyone with information on Francis’ whereabouts should contact the U.S. Marshals at 877-926-8332.  Anonymous tips may also be submitted via the USMS Tips App.  

The U.S. Marshals Service is responsible for over 120,000 fugitive arrests annually, arresting both federal fugitives as well as supporting state and local law enforcement agencies with apprehending dangerous fugitives across the nation and internationally.  

My Threatcon Column: Yet Another U.S. Navy Bribery Scandal

In the last issue of The Journal, I offered a look back at the multimillion-dollar bribery and fraud case that occurred in the late 1980s at the Defense Personnel Support Center in Philadelphia, known locally as the “Quartermaster.” 

Defense contractors who manufactured Navy peacoats and other military clothing bribed Department of Defense civilian employees to ensure the companies received major clothing contracts and expedited processing that led to the contractors receiving enormous government checks. The federal investigation was called “Operation Thimble.” 

At the time, I was a young Defense Department civilian employee doing security work at the Quartermaster, so I knew and worked with some of the people that were caught up in the scandal. 

For the Journal piece, I interviewed Joesph L. Ford, the former lead FBI investigator and Linda Dale Hoffa, the assistant U.S. attorney who prosecuted case. Both Ford and Hoffa have long since retired from federal service. 

A year after Operation Thimble, an even bigger bribery case rocked the Defense Department and the Navy. The investigation was called “IllWind.” 

According to the FBI, some Defense Department employees had taken bribes from businesses in exchange for inside information on procurement bids that helped some of the nation’s largest military contractors win lucrative weapons systems deals. 

More than 60 contractors, consultants, and government officials were ultimately prosecuted—including a high-ranking Pentagon assistant secretary and a deputy assistant secretary of the Navy. As a monetary measure of the significance of the crimes, the case resulted in a total of $622 million worth of fines, recoveries, restitutions, and forfeitures.

The Navy was again rocked more recently with another massive bribery case. I covered the “Fat Leonard” case in the Journal in 2017. 

In 2015, Leonard Glenn Francis, a 350-pound Malaysian known as Fat Leonard, pled guilty to bribery and fraud charges and admitted to presiding over a decade-long conspiracy involving what the Justice Department called “scores of U.S. Navy officials, tens of millions of dollars in fraud and millions of dollars in bribes and gifts – from cash, prostitutes and luxury travel to Cuban cigars, Kobe beef and Spanish suckling pigs.” 

The Navy officers and others provided Francis with information about the upcoming port visits of naval ships, which is classified, as well as confidential contracting information and information about law enforcement investigations of Leonard’s company.    

More than 27 active duty and retired Navy officers, civilian officials and others pled guilty when faced with the overwhelming evidence from the investigation. More indictments are forthcoming. 

So even while the Fat Leonard investigation is ongoing, the Navy is facing yet another bribery scandal. 

On October 18^th, the Justice Department announced that Frank S. Rafaraci, the CEO of Multinational Logistics Services (MLS), a large ship husbanding company that has received over $1 billion in U.S. Navy contracts since 2010, appeared in federal court to face a criminal charge for his alleged participation in a bribery scheme. 

“According to the affidavit in support of a criminal complaint filed in September, Frank S. Rafaraci, 68, a U.S. citizen who resides abroad, has been the CEO of MLS since at least 2005,” the Justice Department stated. “MLS is a defense contractor that provides ship husbanding services, such as refueling and stocking provisions, to U.S. Navy ships at ports worldwide. From approximately 2010 to the present, the U.S. Navy, other U.S. Department of Defense (DoD) components, and U.S. government civilian agencies awarded husbanding services contracts to MLS worth approximately $1.3 billion.” 

The affidavit alleges that, beginning in 2011, Rafaraci was involved in a wide-ranging scheme to bribe U.S. Navy officials, defraud the U.S. Navy using falsely inflated invoices, and launder the proceeds of the scheme through shell companies Rafaraci had set up in the United Arab Emirates, all in an effort to benefit MLS. 

“Frank Rafaraci allegedly defrauded the Navy, bribed a Navy official, and laundered money through foreign bank accounts for years,” said Assistant Attorney General Kenneth A. Polite Jr. of the Justice Department’s Criminal Division. “The Criminal Division remains committed to combating fraud and corruption in defense contracting around the world. 

Eric Maddox, the Special Agent in Charge of the Naval Criminal Investigative Service (NCIS) Economic Crimes Field Office, added, “Rafaraci’s alleged long-running criminal scheme to defraud the Federal government through bribery, falsified invoices, and money laundering cheated the U.S. taxpayer and wasted tremendously valuable resources. NCIS and our law enforcement partners remain steadfast in our commitment to root out bribery and corruption that threaten to diminish the operational readiness and warfighter superiority of the Navy and Marine Corps.” 

As Linda Dale Hoffa, the Quartermaster prosecutor, told me, “Defense Department corruption can permeate an entire system and put at risk the lives of military personnel. Corruption costs taxpayers. It costs everybody.”   

Paul Davis is a longtime contributor to the Journal of Counterterrrorism & Homeland Security Int’l. 

You can also read my Counterterrorism magazine pieces on the Quartermaster and Fat Leonard Navy bribery and fraud cases via the below links:

Paul Davis On Crime: A Look Back At The Multi-Million Dollar Defense Contract Fraud and Bribery Case At The Philadelphia Quartermaster

Paul Davis On Crime: My Piece On The 'Fat Leonard' U.S. Navy Bribery And Fraud Case 

U.S. Navy Hit By Another International Bribery Scandal

Craig Whitlock, a reporter who has covered the “Fat Leonard” U.S. Navy bribery case well, offers a piece at the Washington Post on yet another U.S. Navy bribery and fraud case. 

Federal agents are investigating a new U.S. Navy corruption case that has strong echoes of the Fat Leonard scandal, with a defense contractor facing accusations that he delivered cash bribes and bilked the Navy out of at least $50 million to service its ships in foreign ports, according to recently unsealed court records.

The Justice Department is trying to extradite the contractor — Frank Rafaraci, chief executive of Multinational Logistics Services, or MLS — from Malta, the Mediterranean island where he was arrested last week after an international manhunt. 

Rafaraci, 68, is a dual U.S.-Italian citizen who splits his time between the United Arab Emirates and Sicily. Since 2010, the Navy and federal agencies have awarded MLS about $1.3 billion in contracts to resupply and refuel U.S. warships in the Middle East, Asia and other regions.

According to an arrest warrant unsealed last week in U.S. District Court in Washington, Rafaraci and MLS defrauded the Navy of at least $50 million by inflating invoices for port services between 2011 and 2018. 

In one instance, when the aircraft carrier USS Carl Vinson visited Manama, capital of the Persian Gulf kingdom of Bahrain, in January 2015, MLS billed the Navy for more than $231,000 in “port authority fees,” even though the Manama port authority charged only $12,686, the court documents show. 

Federal authorities are also seeking Rafaraci’s extradition on suspicion of money laundering and bribery. The arrest warrant alleges that he met with an unnamed U.S. Navy official at the Diplomat Hotel in Manama in August 2015, handed over an envelope stuffed with $20,000 in cash and told the official to “keep up the good work.” 

You can read the rest of the piece via the below link:

U.S. Navy hit by another international bribery scandal - The Washington Post

You can also read my Counterterrorism magazine piece on the Fat Leonard case via the below link:

Paul Davis On Crime: My Piece On The 'Fat Leonard' U.S. Navy Bribery And Fraud Case

And you can read my Counterterrorism magazine piece on an earlier bribery case at the Philadelphia Quartermaster via the below link:  

Paul Davis On Crime: A Look Back At The Multi-Million Dollar Defense Contract Fraud and Bribery Case At The Philadelphia Quartermaster 

U.S. Navy Officer Pleads Guilty To Selling Classified Ship Schedules As Part Of Expanding Navy Bribery Probe

The U.S. Justice Department released the below information:

A lieutenant commander in the U.S. Navy pleaded guilty to bribery charges in federal court today, admitting that he accepted cash, hotel expenses and the services of a prostitute in return for providing classified U.S. Navy ship schedules and other internal Navy information to an executive of a defense contracting firm.

Assistant Attorney General Leslie R. Caldwell of the Justice Department’s Criminal Division, U.S. Attorney Laura E. Duffy of the Southern District of California, Deputy Inspector General for Investigations James B. Burch of the Defense Criminal Investigative Service (DCIS), Director Andrew L. Traver of the Naval Criminal Investigative Service (NCIS) and Director Anita Bales of the Defense Contract Audit Agency (DCAA) made the announcement.

“Another Navy officer has now pleaded guilty and admitted to taking bribes to reveal classified military information to a major supplier,” said Assistant Attorney General Caldwell.  “It is both troubling and disappointing how many Navy officers we have exposed as willingly falling prey to GDMA’s corruption, and our investigation remains active and ongoing.  Those who serve in our nation’s military must uphold the public’s trust or pay the consequences for their crimes.”

“The receipt of envelopes of cash and lavish hotel stays by our public officials at whatever level erodes the public’s trust in our institutions and our government,” said U.S. Attorney Duffy.  “Today’s guilty plea reflects the next step in our ongoing effort to regain that public trust.”

Todd Dale Malaki, 44, of San Diego, pleaded guilty before U.S. Magistrate Judge Mitchell D. Dembin of the Southern District of California to one count of conspiracy to commit bribery.  A sentencing hearing is scheduled for July 6, 2015.

As part of his guilty plea, Malaki admitted that in 2006, while he was working as a supply officer for the U.S. Navy’s Seventh Fleet, he began a corrupt relationship with Leonard Glenn Francis, the former president and chief executive officer of Glenn Defense Marine Asia (GDMA), a company that provided services to the U.S. Navy.  As part of the scheme, Malaki provided Francis with classified U.S. Navy ship schedules and proprietary invoicing information about GDMA’s competitors.

In exchange, Malaki admitted that Francis provided him with luxury hotel stays in Singapore, Hong Kong and the island of Tonga, as well as envelopes of cash, entertainment expenses and the services of a prostitute.  Malaki admitted that the total value of the benefits he received was approximately $15,000.

Malaki is the eighth individual to plead guilty in this expanding probe into corruption and fraud in the U.S. Navy.  GDMA pleaded guilty in January.  Two other individuals, Paul Simpkins, formerly a Department of Defense (DOD) contracting officer, and Michael Misiewicz, a Captain-select in the U.S. Navy, have been charged and entered pleas of not guilty.

The ongoing investigation is being conducted by NCIS and DCIS, with substantial assistance from the DCAA.  The case is being prosecuted by Senior Trial Attorney Brian R. Young of the Criminal Division’s Fraud Section and Assistant U.S. Attorneys Mark W. Pletcher and Robert S. Huie of the Southern District of California.

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

Former Employee of Navy Contractor Pleads Guilty in International Navy Bribery Scandal

The U.S. Justice Department released the below information today:

Alex Wisidagama, a citizen of Singapore formerly employed by Glenn Defense Marine Asia (GDMA), pleaded guilty today to one count of conspiracy to defraud the United States for his role in a scheme to overbill the U.S. Navy for ship husbanding services. Wisidagama’s plea is the second in an expanding investigation into acts of alleged fraud and bribery committed by GDMA and several United States Navy officers and personnel.

Acting Assistant Attorney General Mythili Raman of the Justice Department’s Criminal Division, U.S. Attorney Laura E. Duffy of the Southern District of California, Director Andrew Traver of the Naval Criminal Investigative Service (NCIS) and Deputy Inspector General for Investigations James B. Burch of the U.S. Department of Defense Office of the Inspector General made the announcement after the plea was accepted by U.S. Magistrate Judge Jan M. Adler of the Southern District of California.   The plea is subject to acceptance by U.S. District Judge Janis Sammartino.   Sentencing is set for June 13, 2014, before Judge Sammartino.

  Wisidagama, who was arrested in San Diego, Calif., on Sept. 16, 2013, served as the general manager of global government contracts for GDMA, which was owned and operated by his cousin, Leonard Glenn Francis. GDMA was a multi-national corporation with headquarters in Singapore and operating locations in other countries, including Japan, Thailand, Malaysia, Korea, India, Hong Kong, Indonesia, Australia, Philippines, Sri Lanka and the United States.  

GDMA provided the U.S. Navy with hundreds of millions of dollars in husbanding services, which involve the coordinating, scheduling and procurement of items and services required by ships and submarines when they arrive at port.   These services included providing tugboats; paying port authority and customs fees; furnishing security and transportation; supplying provisions, fuel and water; and removing trash and collecting liquid waste.

In his plea agreement, Wisidagama admitted to conspiring to defraud the U.S. Navy in different ways.   Wisidagama and other GDMA employees generated bills charging the U.S. Navy for port tariffs that were far greater than the tariffs that GDMA actually paid.   In some cases, Wisidagama and others created fictitious port authorities for ports visited by U.S. Navy ships, and in other cases, Wisidagama and GDMA created fake invoices from legitimate port authorities purporting to bill the U.S. Navy at inflated tariff rates.   

Wisidagama and GDMA also overbilled the U.S. Navy for fuel by creating fraudulent invoices which represented that GDMA acquired fuel at the same cost that it charged the U.S. Navy when in fact GDMA sold the fuel to the U.S. Navy for far more than it actually paid.   Wisidagama and GDMA also defrauded the U.S. Navy on the provision of incidental items by creating fake price quotes purportedly from other vendors to make it appear that the other vendors’ offering prices were greater than GDMA’s prices.

Wisidagama is the second defendant to plead guilty as part of this investigation. On Dec. 17, 2013, former NCIS Supervisory Special Agent John Bertrand Beliveau Jr. pleaded guilty to conspiracy to commit bribery after admitting to providing Francis with sensitive law enforcement information in exchange for things of value such as cash, travel accommodations, lavish dinners, and prostitutes.   In addition to Beliveau and Wisidagama, Francis and U.S. Navy Commanders Michael Vannak Khem Misiewicz and Jose Luis Sanchez have been charged as part of a bribery and fraud scheme designed to defraud the U.S. Navy.   The charges against Misiewicz, Sanchez and Francis are merely allegations, and the defendants are presumed innocent unless and until proven guilty.

The ongoing investigation is being conducted by NCIS, the Defense Criminal Investigative Service and the Defense Contract Audit Agency. Significant assistance was provided by the Criminal Division’s Office of International Affairs, as well as the Drug Enforcement Administration, U.S. Immigration and Customs Enforcement’s Homeland Security Investigations, the Royal Thai Police and the Corrupt Practices Investigation Bureau in Singapore.

  The case is being prosecuted by Assistant U.S. Attorneys Mark Pletcher and Robert Huie of the Southern District of California, Director of Procurement Fraud Catherine Votaw and Trial Attorney Brian Young of the Criminal Division’s Fraud Section, and Trial Attorney Wade Weems, on detail to the Fraud Section from the Special Inspector General for Afghan Reconstruction. 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.