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FCPA Blog Daily News

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Tuesday
Jul082014

Former U.S. Navy officer pleads guilty in ever-unfolding bribery scandal

A retired Navy official who worked for Glenn Defense Marine Asia (GDMA) pleaded guilty Monday, admitting that he and others overcharged the Navy by about $2.5 million for port services, using some of the money to treat Navy officials to lavish dinners, cocktails and entertainment.

Edmond Aruffo retired from the Navy in 2007 with the rank of lieutenant commander after a military career of more than 20 years. He's the seventh defendant charged -- and the fourth to plead guilty -- in the corruption scandal involving GDMA and Navy officials.

Assistant Attorney General Leslie Caldwell said: "There is an old Navy saying: 'Not self, but country.' Edmond Aruffo instead put self before country when he stole from the U.S. Navy as part of a massive fraud and bribery scheme that cost the U.S. Navy more than $20 million." 

Singapore-based GDMA serviced Navy ships and submarines in the Pacific. Aruffo became manager of its Japan operations in 2009.

He entered his plea before U.S. Magistrate Judge Karen S. Crawford of the Southern District of California Monday to a single count of conspiracy to defraud the United States. 

The DOJ has alleged that GDMA owner and CEO Leonard Glenn Francis secretly enlisted Navy personnel -- including Commander Michael Vannak Khem Misiewicz, Commander Jose Luis Sanchez, NCIS Special Agent John Beliveau and Petty Officer First Class Daniel Layug -- to provide classified ship schedules and other sensitive information about an ongoing criminal investigation of GDMA.   

Francis and his cousin, GDMA executive Alex Wisidagama, conspired to defraud the United States through a number of overbilling schemes, the DOJ said, allegedly overcharging the Navy more than $20 million.  

Wisidagama, Beliveau and Layug have pleaded guilty while the others are awaiting trial.

Francis is accused of bribing Navy personnel with cash, luxury travel, expensive meals, consumer electronics and prostitutes in exchange for classified information he used to win work for his company.

Aruffo admitted in his plea agreement that he and others defrauded the U.S. Navy for services provided to nearly every Navy ship that came to port in Japan from July 2009 to September 2010.

His bond was set at $40,000 and a sentencing hearing is scheduled for October 3, 2014.

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Julie DiMauro is the executive editor of FCPA Blog and can be reached here.