Fat Leonard Navy Bribery Scandal: U.S. Navy Commander Pleads Guilty in the Run Up to the Seventh Fleet Navy Bribery Trial

Yet another Navy officer had pled guilty to bribery in the “Fat Leonard” Glenn Francis U.S. Navy bribery and fraud case. 

The U.S. Attorney’s Office Southern District of California released the below information: 

SAN DIEGO – U.S. Navy Commander Stephen Shedd pleaded guilty in federal court today to bribery charges, admitting that he and eight other indicted leaders of the U.S. Navy’s Seventh Fleet received more than $250,000 in meals, entertainment, travel and hotel expenses, gifts, cash and the services of prostitutes from foreign defense contractor Leonard Glenn Francis.

Shedd is one of nine members of the Seventh Fleet indicted by a federal grand jury in March 2017 for conspiring with and receiving bribes from Francis, the owner and CEO of Singapore-based Glenn Defense Marine Asia, which provided services for U.S. Navy ships in port, including tugboats; fenders; security; food; fuel; water; trash and waste removal; and transportation.

Shedd is the third of the Seventh Fleet defendants to plead guilty. The trial of the remaining defendants is scheduled to begin on February 28, 2022. The remaining six defendants - who are accused of conspiring to trade military secrets and substantial influence for sex parties with prostitutes and luxurious dinners and travel, among other lavish things of value - include U.S. Navy Rear Admiral Bruce Loveless; Captains David Newland, James Dolan, David Lausman and Donald Hornbeck; and Commander Mario Herrera.

The overarching fraud and bribery investigation has resulted in federal criminal charges against 34 U.S. Navy officials, defense contractors and the GDMA corporation. So far, 28 of those have pleaded guilty, admitting collectively that they accepted millions of dollars in luxury travel and accommodations, meals, lavish gifts, or services of prostitutes, among other things of value, from Francis in exchange for helping GDMA win and maintain contracts and overbill the Navy by over $35 million.

The U.S. Navy’s Seventh Fleet represents a vital piece of the United States military’s projection of power as well as American foreign policy and national security. The largest numbered fleet in the U.S. Navy, the Seventh Fleet is comprised of 60-70 ships, 200-300 aircraft and approximately 40,000 sailors and Marines. The Seventh Fleet is responsible for U.S. Navy ships and subordinate commands that operate in the Western Pacific throughout Southeast Asia, Pacific Islands, Australia, and Russia and the Indian Ocean territories, as well ships and personnel from other U.S. Navy Fleets that enter the Seventh Fleet’s area of responsibility.

According to Shedd’s admissions as set forth in his plea agreement, the defendants informed Francis of planned U.S. Navy ship movements by providing Francis with classified U.S. Navy ship schedules and narrative summaries of those schedules. The defendants provided Francis with internal, proprietary U.S. Navy information. The defendants took official acts and exerted pressure on, advocated before, and provided advice to other U.S. Navy officials, knowing and intending that such advocacy and advice would form the basis for such other officials' decisions to pay GDMA’s claims, overlook inflated invoices, quash bid protests filed by GDMA's competitors, suppress competition in contract awards, and resolve in GDMA’s favor other questions, matters, and controversies regarding GDMA’s husbanding business.

From November 2006 to October 2008, Shedd served as the Seventh Fleet’s South Asia Policy and Planning Officer, where he was, in part, responsible for identifying ports that U.S. Navy ships would visit. From November 2008 to May 2010, Shedd served as a Personnel Distribution Officer stationed in Millington, Tennessee, and thereafter, upon being promoted to Commander, from March 2011 until May 2014, Shedd served as the Executive Officer and later the Commanding Officer of the U.S.S. Milius.

“The defendant has admitted he was one of the many whose allegiance was switched from the Navy to Leonard Francis,” said U.S. Attorney Randy Grossman. “This abdication of the defendant’s duties to the Navy and the United States comes with heavy consequences.”

“Mr. Shedd's disgraceful actions while serving in a sensitive position with the U.S. Navy's 7th Fleet betrayed the standards and expectations of all members of the Armed Forces and jeopardized the Fleet's safety and security,” said Kelly P. Mayo, the Director of the Department of Defense Office of Inspector General, Defense Criminal Investigative Service (DCIS).  “This lengthy investigation demonstrates that DCIS and our law enforcement partners will continually strive to fortify the integrity of the Department of Defense's procurement systems by doggedly pursuing and rooting-out corruption in the Department.”

“Cmdr. Shedd abused his high-level position in the Navy by illegally accepting lavish gifts from Mr. Francis in exchange for providing Mr. Francis classified ship schedules listing numerous ships, specific ports, and dates for the visits far in advance of ship visits,” said NCIS Director Omar Lopez. “NCIS and our law enforcement partners are committed to rooting out bribery and corruption that wastes valuable U.S. taxpayer money and damages the integrity of the Navy.”

Shedd is scheduled to be sentenced on July 21, 2022 before U.S. District Judge Janis L. Sammartino.

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 

Two More Navy officers Censured For Fat Leonard-Related Infractions

Geoff Ziezulewicz at the Navy Times offers a piece on two more Navy officers punished in the “Fat Leonard’ bribery and fraud case.

The Navy has censured a pair of commissioned officers for their roles in the Fat Leonard public corruption scandal.

The letters of censure issued to the captains by Navy Secretary Richard Spencer serve as both a public rebuke of their actions and shine more light into the web of kickbacks, payoffs and port contracts spun by the portly Leonard Glenn Francis (seen in the below photo) that cost U.S. taxpayers at least $35 million.

At least 10 captains and admirals have received similar written reprimands in recent years.

Capt. Heedong Choi’s (seen in the above photo) infractions took place from 2008 to 2013, as he served in several leadership positions in the Western Pacific, including as commanding officer of the guided-missile destroyer Chafee, according to the April 26 letter.

But Spencer concluded that his relationship with Francis went back to 2001, when Choi was a flag aide to the commander of 7th Fleet.

“As Flag Aide, Mr. Francis specifically described you as his means to ‘grease’ your Commander and the ‘pipeline’ between him and your Commander," Spencer wrote. "He also said you were on his ‘payroll’ since that time because you ‘kept delivering.”

…Retired Capt. Ricardo Martinez was also censured in an April 26 letter.

His Fat Leonard-related infractions took place while he was serving as the U.S. Naval attaché to Indonesia and New Zealand from 2001 to 2008, according to the reprimand.

Martinez received or solicited nearly $16,000 in gifts from Francis and his port services company, Glenn Defense Marine Asia, or GDMA, and the April 26 censure letter contains a “chronological list of misconduct."

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

https://www.navytimes.com/news/your-navy/2019/05/16/two-more-navy-officers-censured-for-fat-leonard-related-infractions/ 

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

www.pauldavisoncrime.com/2017/03/my-piece-on-fat-leonard-us-navy-bribery.html 

Corrupt Retired Master Chief Pleads Guilty In ‘Fat Leonard’ Navy Scandal

Geoff Ziezulewicz at the Navy Times offers a piece on the latest case in the U.S. Navy’s ‘Fat Leonard’s bribery and fraud scandal.

A retired master chief pleaded guilty in San Diego last week to taking kickbacks and became the latest casualty in the Navy’s ongoing “Fat Leonard” public corruption scandal. 

Ricarte I. David, 61, copped to one count of conspiracy to commit honest services fraud on Sept. 5, less than a month after prosecutors unveiled a grand jury indictment against him, according to the U.S. Justice Department.

As part of his plea deal, David confessed to receiving luxury hotel stays and envelopes stuffed with cash from the ship servicing contractor Glenn Defense Marine Asia and its portly Malaysian magnate, Leonard Glenn “Fat Leonard” Francis, between 2005 and 2009.

In exchange, David signed off on inflated invoices for water, trash and other port services for vessels in the Japan-based 7th Fleet.

David held key logistics positions in the west Pacific between 2001 and 2010, including stints on the amphibious warship Essex and the aircraft carriers Kitty Hawk and George Washington.

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

https://www.navytimes.com/news/your-navy/2018/09/13/retired-master-chief-pleads-guilty-to-role-in-fat-leonard-scandal/?utm_source=Sailthru&utm_medium=email&utm_campaign=ebb%2014.09.18&utm_

term=Editorial%20-%20Military%20-%20Early%20Bird%20Brief

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

www.pauldavisoncrime.com/2017/03/my-piece-on-fat-leonard-us-navy-bribery.html 

'Fat Leonard' U.S. Navy Bribery And Fraud Case: Active-Duty U.S. Navy Commander Pleads Guilty To Conspiring With Foreign Defense Contractor To Defraud the U.S. Navy

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

An active-duty U.S. Navy commander pleaded guilty today in connection with his efforts to obstruct a federal criminal investigation of the owner and chief executive officer of a multi-national defense contracting firm headquartered in Singapore.

Acting Assistant Attorney General Kenneth A. Blanco of the Justice Department’s Criminal Division, Acting U.S. Attorney Alana Robinson of the Southern District of California, Director Dermot O’Reilly of the Department of Defense’s Defense Criminal Investigative Service (DCIS) and Director Andrew Traver of the Naval Criminal Investigative Service (NCIS) made the announcement.

Bobby Pitts, 48, of Chesapeake, Va., pleaded guilty to one count of conspiracy to defraud the U.S. in connection with the NCIS’s investigation of Leonard Glenn Francis, the owner and CEO of Glenn Defense Marine Asia (GDMA).  Pitts is set to be sentenced on December 1, by U.S. Magistrate Judge Bernard Skomal of the Southern District of California, who accepted his plea today.

According to admissions made as part of his plea agreement, from August 2009 to May 2011, Pitts served as the officer in charge of the U.S. Navy’s Fleet Industrial Supply Command (FISC) in Singapore.  As part of his duties, Pitts learned that NCIS and several civilian employees of the U.S. Navy were investigating whether Francis was over-billing the U.S. Navy on ship husbanding contracts.  Pitts had access to internal U.S. Navy documents pertaining to investigative steps that the U.S. Navy was considering and admitted that he shared this information with Francis, with the intent to impede and obstruct the U.S. Navy’s oversight of its contracts with GDMA.  On Nov. 23, 2010, for example, Pitts forwarded to a representative of GDMA an internal U.S. Navy email discussing FISC’s intention to contact officials with the Royal Thai Navy to determine whether GDMA had been billing the U.S. Navy for services in fact rendered by the Thai government.

In pleading guilty, Pitts admitted, among other things, to working with Francis and other foreign-defense-contractor personnel to help them cover up GDMA’s overcharging practices with respect to providing protection to U.S. Navy forces deployed in the Western Pacific.

So far, 18 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 case is being prosecuted by Assistant Chief Brian R. Young of the Fraud Section of the Justice Department’s Criminal Division and Assistant U.S. Attorneys Mark W. Pletcher and Patrick Hovakimian of the Southern District of California.  

'Fat Leonard' U.S. Navy Scandal: Singapore Executives Sentenced For Fraud In International Navy Corruption Scandal

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

Two former executives of foreign defense contractor Glenn Defense Marine Asia (GDMA) were sentenced today 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.

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 Andrew L. Traver of the Naval Criminal Investigative Service (NCIS) and Director Dermot F. O’Reilly of the Defense Criminal Investigative Service (DCIS) made the announcement.

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 Leonard Glenn 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 investigating.  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 and are prosecuting the case.  The Criminal Division’s Office of International Affairs provided substantial assistance in this matter.  

Fat Leonard/U.S.Navy Bribery & Fraud Case: Two Former Executives of Foreign Defense Contractor Plead Guilty To Fraud In International Navy Corruption Scandal

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.

U.S. Navy Repeatedly Dismissed Evidence That ‘Fat Leonard’ Was Cheating The 7th Fleet

Craig Witlock at the Washington Post offers a piece on the U.S. Navy "Fat Leonard' bribery and fraud scandal.

For Fat Leonard, conning the U.S. Navy was a big piece of cake.

The Navy allowed the worst corruption scandal in its history to fester for several years by dismissing a flood of evidence that the rotund Asian defense contractor was cheating the service out of millions of dollars and bribing officers with booze, sex and lavish dinners, newly released ­documents show.

The Singapore-based contractor, Leonard Glenn Francis, found it especially easy to outwit the Naval Criminal Investigative Service (NCIS), the renowned law enforcement agency that has inspired one of the longest-running cop shows on television.

Starting in 2006, in response to a multitude of fraud complaints, NCIS opened 27 separate investigations into Francis’s company, Glenn Defense Marine Asia. In each of those instances, however, NCIS closed the case after failing to dig up sufficient evidence to take action against the firm, according to hundreds of pages of law enforcement records ­obtained by The Washington Post under the Freedom of ­Information Act.

Known as Fat Leonard for his 350-pound physique, Francis held lucrative contracts to resupply U.S. warships and submarines in ports throughout Asia. He was also legendary within the Navy for throwing hedonistic parties, often with prostitutes, to entertain ­sailors. 

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

https://www.washingtonpost.com/investigations/navy-repeatedly-dismissed-evidence-that-fat-leonard-was-cheating-the-7th-fleet/2016/12/27/0afb2738-c5ab-11e6-85b5-76616a33048d_story.html?utm_term=.c52f8ea0bde1