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Friday
Sep162016

Two new indictments in Navy's ‘Fat Leonard’ bribery scandal

The DOJ indicted two former executives of a Singapore-based defense contractor for a conspiracy to steal more than $5 million from the U.S. Navy.

The indictments are the latest in a huge bribes-for-secrets scandal that's rocking the Navy's command structure in the Pacific.

Neil Peterson, 38, and Linda Raja, 43, both of Singapore, were charged with submitting false claims and conspiracy to commit wire fraud.

Singapore authorities arrested them at the request of the U.S. government.

The DOJ unsealed the indictment Thursday.

Peterson and Raja worked for Glenn Defense Marine Asia. Peterson was the vice president for global operations and Raja served as general manager for Singapore, Australia, and the Pacific Isles.

They're being held in Singapore pending extradition to the United States.

The DOJ said they plotted with the owner of Glenn Defense, Leonard Glenn Francis -- also known as Fat Leonard -- to cheat the U.S. Navy out of more than $5 million.

They allegedly submitted "false price quotes from non-existent companies on letterhead created from graphics cut and pasted from the internet," the DOJ said.

Glenn Defense-owner Francis, 51, has already pleaded guilty to bribing scores of U.S. Navy officials with luxury travel, meals, cash, electronics, parties, and prostitutes.

His company provided Navy ships with food, water, cleaning, and other port services in Asia.

Federal agents arrested the Malaysian citizen after luring him to San Diego to talk about new Navy contracts.

He's waiting to be sentenced.

A total of 16 individuals have now been charged in connection with the scandal.

Of those, 11 are current or former U.S. Navy officials.

Most of the Navy personnel have been charged with taking bribes from Francis in exchange for passing to him sensitive information about ship movements and schedules. Some were charged with lying to investigators about their relationship with Francis and his company.

They are:

  • Admiral Robert Gilbeau
  • Captain (ret.) Michael Brooks
  • Commander Bobby Pitts
  • Lt. Commander Gentry Debord
  • Captain Daniel Dusek
  • Commander Michael Misiewicz
  • Lt. Commander Todd Malaki
  • Commander Jose Luis Sanchez
  • Petty Officer First Class Daniel Layug
  • NCIS Supervisory Special Agent John Beliveau, and
  • Paul Simpkins, a former DoD civilian employee who oversaw contracting in Singapore.

Gilbeau, Dusek, Misiewicz, Malaki, Beliveau, Sanchez, Layug, and Simpkins have pleaded guilty. 

In January, Layug was sentenced to 27 months in prison and Malaki was sentenced to 40 months in prison.

In March, Dusek was sentenced to 46 months in prison.

In April, Misiewicz was sentenced to 78 months in prison and fined $100,000.

Gilbeau, Beliveau, Sanchez, and Simpkins are wating to be sentenced.

Brooks, Pitts, and Debord were charged in May and their cases are pending.

Other Glenn Defense executives charged are Alex Wisidagama and Ed Aruffo.

Both have pleaded guilty. 

Wisidagama was sentenced in March to 63 months in prison and ordered to pay $34.8 million in restitution to the Navy. 

Aruffo awaits sentencing.

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Richard L. Cassin is the publisher and editor of the FCPA Blog. He'll be the keynote speaker at the FCPA Blog NYC Conference 2016.