The Fat Leonard scandal is a corruption scandal and ongoing investigation within the United States Navy involving ship support contractor Glenn Defense Marine Asia (GDMA), a subsidiary of the Glenn Marine Group. The Washington Post called the scandal "perhaps the worst national-security breach of its kind to hit the Navy since the end of the Cold War." At the heart of the scandal was Glenn Defense Marine Asia, a firm run by Leonard Glenn Francis, a Malaysian national known as "Fat Leonard" for his 350-pound weight. Francis provided thousands of dollars in cash, travel expenses, luxury items, and prostitutes to a large number of U.S. uniformed officers of the United States Seventh Fleet, who in turn gave him classified material about the movements of U.S. ships and submarines, confidential contracting information, and information about active law enforcement investigations into Glenn Defense Marine Asia. Francis then "exploited the intelligence for illicit profit, brazenly ordering his moles to redirect aircraft carriers to ports he controlled in Southeast Asia so he could more easily bilk the Navy for fuel, tugboats, barges, food, water and sewage removal."
U.S. federal prosecutors filed criminal charges against 28 people in connection with the Fat Leonard scandal. Of those, 18 pleaded guilty: Francis himself, four of his top aides, and 14 Navy officials (specifically, ten commissioned officers, one petty officer first class, one former NCIS special agent, and two civilian Navy contracting officials). Ten others are awaiting trial in U.S. district court in San Diego. Separately, five Navy officers have been charged with crimes under military law and will be tried in court-martial proceedings. An additional person pleaded guilty to a scandal-related crime in Singapore court.
In 2010, Navy officials became suspicious that some of the bills submitted by GDMA from Thailand were padded. After a three-year secret investigation, federal agents lured Francis to the United States in September 2013, arresting him at a San Diego hotel in a sting operation. He pleaded guilty in January 2015 and is awaiting sentencing. Leonard admitted to using his U.S. Navy contacts, including ship captains, to obtain classified information and to defraud the Navy of tens of millions of dollars by steering ships to specific ports in the Pacific and falsifying service charges. In his plea, Francis identified seven Navy officials who accepted bribes. The 6-foot-3-inch, 350-pound Malaysian playboy faces a maximum prison sentence of 25 years and agreed to forfeit $35 million in personal assets, an amount he admits to overcharging the Navy.
In 1989, when he was 21, Leonard was sentenced to three years in jail in Malaysia for firearms possession.
Since 2013, 31 people have been criminally charged in connection with the Fat Leonard bribery and corruption scandal. According to investigators, by November 2017, more than 440 people — including 60 admirals — have come under scrutiny under the inquiry. The Navy will hold a military trial for a still-serving commander, David A. Morales, the first not left to civilian prosecution. He was charged with accepting travel, gifts and cash, in return for persuading other military officials to accept bribes and join the conspiracy. As of September 2017, eighteen people have pleaded guilty; 14 others have been charged (including eight Navy officers who were indicted in March 2017); four admirals were disciplined by the military; two others are known to be under investigation; and more than 150 other unidentified people have been scrutinized.
A March 2017 indictment also references a conspiracy member, a retired lieutenant commander in the Royal Australian Navy, who had been a liaison officer with USS Blue Ridge, and identified only as "A.G." A second unidentified Australian of similar rank was also reported to be under investigation.
Among the eighteen people who have pleaded guilty to federal crimes, one was Francis himself, two others were his top deputies; and fifteen others were Navy personnel. The highest-ranking was Rear Admiral Robert Gilbeau, who was convicted in June 2016 after pleading guilty to making false statements to investigators about his contacts with Francis, becoming the first Navy admiral in modern American history to be convicted of a felony while on active duty. On May 17, 2017, U.S. District Judge Janis Lynn Sammartino sentenced Gilbeau to 18 months in prison, although he will be allowed to continue collecting his nearly $10,000 monthly pension.
National University of Singapore, corporate governance expert Mak Yuen Teen, noted that procurement in the defense industry is particularly vulnerable to bribery and corruption. "It is usually not that transparent," with infrequent bidding for large contracts. Blowing the whistle on superior officers might also be discouraged, he indicated. "Those at the top probably thought they could get away with it as their underlings were unlikely to squeal on them."
According to its spokesman Captain Amy Derrick, the U.S. Navy canceled all contracts with GDMA as the result of a 2013 audit.
Except for Sharon Kaur's case, which is being tried in Singapore, and those of five persons charged in military courts (Captain John F. Steinberger, Commander David A. Morales, Commander Jason W. Starmer, Lt. Peter L. Vapor, and Chief Warrant Officer Brian T. Ware), all court proceedings as of September 16, 2017, are in U.S. federal court.
|Leonard Glenn "Fat Leonard" Francis||Singapore-based defense contractor;
president/CEO of Glenn Defense Marine Asia (GDMA)
|Francis admitted that "he bribed 'scores' of U.S. Navy officials with $500,000 in cash, six figures' worth of sex from his "Thai SEAL team" of traveling prostitutes that greeted ships, lavish hotel stays, spa treatments, $2,000 boxes of Cuban cigars, Kobe beef, Spanish suckling pigs, foie gras terrine, cognac, and an array of other luxury goods." In return, Navy officers provided Francis with classified information, such as ship movements, enabling him to routinely overcharge the Navy for various services GDMA provided for warships in port, such as sewage removal, ground transportation, and communications.||Pleaded guilty in January 2015 to bribery, conspiracy to commit bribery, and conspiracy to defraud the United States; awaiting sentencing.|||
|Edmond Aruffo||Top deputy to Francis; Japan country manager for GDMA; retired U.S. Navy officer||Was given "unfettered access" to the headquarters ship of the 7th Fleet, often dining at the officers mess.||Pleaded guilty in July 2014 to conspiracy to defraud the United States; released on bail in September 2014, awaiting sentencing scheduled for July 2017.|||
|Alex Wisidagama||Top deputy to Francis, and his cousin; global manager for government contracts at GDMA||Singapore citizen who fabricated invoices, concocted bids by nonexistent competitors to satisfy acquisition requirements, and massively overbilled for vessel husbandry services.||Pleaded guilty in March 2014 to conspiracy to defraud the United States, and was sentenced in March 2016 to 63 months in prison and ordered to pay the Navy $34.8 million in restitution.|||
|Rear Admiral Robert Robert Gilbeau||Former special assistant to the chief of the Navy Supply Corps||A graduate of the U.S. Naval Academy and recipient of the Bronze Star and Purple Heart, Gilbeau admitted in a plea agreement to "concealing the duration and extent of his relationship" with Francis when being questioned by federal investigators. Gilbeau also destroyed papers and computer files after Francis's arrest and falsely told investigators that he had never received gifts from Francis. Catering for 20 years to Gilbeau's particular preferences, Francis provided him with Vietnamese prostitutes, "two at a time."||Pleaded guilty in June 2016 to making a false official statement. Gilbeau retired from active duty in September 2016 and was demoted to captain. Sentenced to 18 months in prison, in addition to a $100,000 fine, $50,000 in restitution, 300 hours of community service, and three years on probation. Being held at Federal Correctional Institution, Terminal Island.|||
|Captain Michael George Brooks (retired)||Former U.S. naval attaché in the Philippines.||Brooks, of Fairfax Station, Virginia, was the U.S. naval attaché in Manila from 2006 to 2008. He "acknowledged that he and his family members accepted fine wines, hotel rooms, electronics, luxury watches and the services of prostitutes on dozens of occasions" from Francis; secretly passed confidential Navy documents to Francis and Glenn Defense; permitted Glenn Defense to write its own 2007 Navy performance evaluation; and "illicitly secured diplomatic clearance for Glenn Defense so that the firm could bring cargo and personnel into Philippines without being subject to inspections and customs duties."||Pleaded guilty in November 2016 to conspiracy to commit bribery. On June 16, 2017, he was sentenced to three and one half years in prison and was also ordered to pay the Navy a $41,000 fine plus $31,000 in restitution.|||
|Captain Daniel Dusek||Former deputy director of operations for the United States Seventh Fleet
former commander of the USS Bonhomme Richard
|Served 26 years in the Navy. Was bribed with thousands of dollars in cash and luxury goods in exchange for providing classified information to Francis and arranging "for the carrier Abraham Lincoln and the amphibious assault ship Peleliu to stop at ports where Francis' firm was dominant and could get the bid to provide services to the ships."||Pleaded guilty in January 2015 to conspiracy to commit bribery; sentenced in March 2016 to 46 months in prison and ordered to pay $100,000 in fines and restitution. Being held at Federal Correctional Institution, Sheridan|||
|Commander David Kapaun||Former deputy chief of staff for special operations at the Pacific Command||Lied on his security clearance renewal application by not disclosing he had a long-standing "unfavorable" relationship with Francis.||Pleaded guilty on June 6, 2017 to making false statements. Sentenced September 11, 2017, to 18 months in federal prison plus to make $50,000 in restitution and pay $25,000 in fines, with 200 hours of community service.|||
|Commander (Vannak Khiem) Michael Misiewicz||Former deputy director of operations for the United States Seventh Fleet
former commander of the USS Mustin
|Francis supplied him with prostitutes, cash, luxury hotel stays, international airfare for himself and his family, and tickets to a Thailand concert by Lady Gaga and a “Lion King” performance in Japan. He supplied Francis with information about vessel movements including about submarines as well as ballistic-missile defense plans in Asia.||Pleaded guilty in January 2016 to conspiracy and bribery; sentenced in April 2016 to 78 months in prison and ordered to pay $195,000 in fines and restitution. Being held at United States Penitentiary, Lompoc, California.|||
|Commander Jose Luis Sanchez||Former logistics officer for the United States Seventh Fleet||Served as the executive officer for Fleet Logistics Center Yokosuka until April 2013. Admitted to taking bribes over more than four years, in the form of more than $100,000 in cash, payment of travel expenses, and the services of prostitutes, in exchange for providing confidential Navy information to Glenn Defense.||Pleaded guilty in January 2015 to bribery and conspiracy to commit bribery; awaiting sentencing.|||
|Lieutenant Commander Gentry Debord||Former logistics officer and stock control officer aboard the USS Essex from 2007 to 2010||Admitted to taking bribes from GDMA for several years in the form of travel, entertainment and the services of prostitutes, with evidence including his reporting having indulged in group sex. In return, Debord assisted Glenn Defense in submitting fake invoices to the Navy and tipped Francis off about a Navy investigation into his company. Debord attributed his entanglement in the scheme to his sex addiction.||Pleaded guilty in October 2016 to conspiracy to commit bribery; sentenced in January 2017 to 30 months in prison and ordered to pay $52,000 in fines and restitution. Being held at Federal Correctional Institution, Morgantown, West Virginia.|||
|Lieutenant Commander Todd Malaki||Former logistics planner and supply officer||Over seven years, Malaki provided Francis with proprietary and confidential military documents to assist GMDA in exchange for hotel rooms, cash and a prostitute. In 2006, Malaki provided him with invoices and bid information supplied by competing contractors.||Pleaded guilty in April 2015 to conspiracy to commit bribery; sentenced in January 2016 to 40 months in prison and ordered to pay $30,000 in fines and restitution. Being held at United States Penitentiary, Tucson, Arizona.|||
|Petty Officer 1st Class Dan Layug||Former logistics specialist for the USS Blue Ridge and United States Seventh Fleet||"Leaked competitors' business secrets and classified ship schedules on six occasions."||Pleaded guilty in May 2014 to conspiracy to commit bribery; sentenced in January 2016 to 27 months in prison and fined $15,000. Being held at United States Penitentiary, Atwater, California.|||
|John Beliveau II||Former special agent, Naval Criminal Investigative Service||Beliveau was a supervisor whose case the prosecutor compared to Massachusetts gangster Whitey Bulger's Winter Hill Gang which had corrupted the Boston FBI.||Pleaded guilty in December 2013 to bribery and conspiracy to commit bribery; sentenced in October 2016 to 12 years in prison. Being held at Federal Correctional Institution, Allenwood, Low, in Pennsylvania.|||
|Paul Simpkins||Former Navy contracting supervisor based in Singapore||Simpkins took $350,000 in bribes from Francis, in the form of cash and funds wired to a bank account in Japan controlled by his wife. In return, Simpkins protected Glenn Defense's contracts; he "ordered other Navy officials to stop reviewing fraudulent invoices from the firm, and blocked the installation of special equipment that would have detected a scheme by Francis to overcharge the Navy for pumping wastewater from its ships" and on one occasion "overruled a recommendation from a junior officer to cancel one of Glenn Defense's contracts for poor performance."||Pleaded guilty in June 2016 to bribery, and conspiracy to commit bribery; sentenced in December 2016 to six years in prison and ordered to pay $450,000 in fines and restitution. Being held at Federal Correctional Institution, Morgantown, West Virginia.|||
|Rear Admiral Bruce Loveless (retired)||Former U.S. Navy Director of Intelligence Operations, United States Seventh Fleet intelligence chief||Had been tasked with assessing and counteracting foreign intelligence threats located within the Seventh Fleet’s geographic area of responsibility. Alleged to have received emoluments from Francis including provisions of prostitutes and stays at the Bangkok Conrad hotel and at the Shangri-La Hotel Jakarta and the Shangri-La Hotel Singapore, all in May 2008, and at the Makati Shangri-La, Manila, in the presidential suite, where he and Hornbeck, Dolan, Lausman and Shedd drained the hotel of its entire stock of Dom Perignon champagne during a “raging multi-day party, with a rotating carousel of prostitutes,” according to the indictment.||Charged in March 2017 with Conspiracy to Commit Honest Services Wire Fraud and Bribery and making false statements. Awaiting trial; has pleaded not guilty.|||
|Captain David A. "Too Tall" Lausman (retired)||Former commanding officer of the USS George Washington and USS Blue Ridge||Lausman and his wife were alleged to have taken a luxury trip to Thailand paid for by Francis and Lausman’s wife allegedly accepted his gift of an $11,345 Versace handbag. Francis was said to have paid for him at the Makati Shangri-La, Manila, in the presidential suite, where he and Hornbeck, Dolan, Shedd and Loveless consumed the hotels entire stock of Dom Perignon champagne during a “raging multi-day party, with a rotating carousel of prostitutes,” according to the indictment.||Charged in March 2017 with Conspiracy to Commit Honest Services Wire Fraud and Bribery, obstruction of justice, and making false statements. Awaiting trial; has pleaded not guilty.|||
|Commander Stephen F. Shedd||Former commanding officer of the USS Milius, a destroyer, and planning officer for the United States Seventh Fleet||Francis was claimed to have paid for his stay at the Makati Shangri-La, Manila, in the presidential suite, where he and Hornbeck, Dolan, Lausman and Loveless drained the hotel of its entire stock of Dom Perignon champagne during a “raging multi-day party, with a rotating carousel of prostitutes,” according to the indictment. Room and alcohol charges exceeded $50,000. In an email, Shedd told Francis, "It's been a while since I've done 36 hours of straight drinking."||Charged in March 2017 with Conspiracy to Commit Honest Services Wire Fraud and Bribery. Awaiting trial; has pleaded not guilty.|||
|Commander Donald "Bubbles" Hornbeck (retired)||Former Deputy Chief of Staff for Operations, United States Seventh Fleet||Francis allegedly paid for his stay in the presidential suite, at the Makati Shangri-La, Manila, where he and Shedd, Dolan, Lausman and Loveless drained the hotel of all of its Dom Perignon champagne during a “raging multi-day party, with a rotating carousel of prostitutes,” according to the indictment.||Charged in March 2017 with Conspiracy to Commit Honest Services Wire Fraud and Bribery. Awaiting trial; has pleaded not guilty.|||
|Captain David Newland (retired)||Former Chief of Staff to the Commander, United States Seventh Fleet||Allegedly in February 2007, he and other officers used MacArthur memorabilia in the commission of sex acts with prostitutes in the Manila hotel suite.||Charged in March 2017 with Conspiracy to Commit Honest Services Wire Fraud and Bribery. Awaiting trial; has pleaded not guilty.|||
|Colonel Enrico "Rick" de Guzman (retired)||Former assistant chief of staff of operations, United States Marine Corps Forces, Pacific and after USN retirement, civilian deputy chief of staff of operations.||Two weeks after the Judge Advocate General of the 7th Fleet authored a memo on February 2, 2007, warning personnel not to accept gifts from contractors, DeGuzman, with his wife, who were accompanied by other officers, were alleged to have eaten at the Jaan Restraurant and accepted lodging in Singapore that cost $30,000. Other meals included ones at Hong Kong's Petrus Restaurant, which came to $20,435, and Tokyo's New York Grill in Tokyo costing $30,000.|||
|Captain James Dolan (retired)||Former assistant chief of staff for logistics, United States Seventh Fleet||Allegedly intervened on GDMA’s behalf in contracting and billing disputes, accepting travel and the services of prostitutes, and to have been a participant in carousing at the Makati Shangri-La, Manila, in the presidential suite, paid for by Francis, where he and Hornbeck, Dolan, Shedd and Loveless consumed the hotel's entire stock of Dom Perignon champagne during a “raging multi-day party, with a rotating carousel of prostitutes,” according to the indictment.||Charged in March 2017 with Conspiracy to Commit Honest Services Wire Fraud and Bribery. Awaiting trial; has pleaded not guilty.|||
|Chief Warrant Officer Robert Gorsuch (retired)||Former flag administration officer, United States Seventh Fleet||Screened candidates for potential participation in conspiracy.|||
|Commander Mario Herrera||Former fleet operations/schedules officer, United States Seventh Fleet||Allegedly granted diplomatic clearance to GDMA to enable it to bring armed guards into the Philippines, avoid inspections and payment of customs duties.||Charged in February 2017 with Conspiracy to Commit Honest Services Wire Fraud and Bribery. Awaiting trial; has not yet entered a plea.|||
|Commander Bobby R. Pitts (retired)||Former supply and logistics officer, United States Seventh Fleet Singapore contracting||Allegedly leaked Naval Criminal Investigative Service (NCIS) files to GDMA to obstruct fraud investigations.||Indicted by a federal grand jury in May 2016; charged with conspiracy to defraud the United States and obstruction of official proceedings. Pleaded guilty on August 15, 2017, to conspiracy to defraud the United States, Sentenced to 18 months in prison and a $22,500 fine.|||
|Commander David Alexander Morales||Former Singapore contracting||Allegedly took bribes in the form of cash, four suckling pigs, Julio Iglesias tickets, a Gucci fashion show and prostitutes for introducing Francis to potential recruits who might be brought into the conspiracy and providing an admiral's email address. He has been charged with graft, making a false official statement, violation of lawful orders and adultery.||Military article 32 hearing began in Norfolk, Virginia on June 26, 2017, with the accused currently awaiting court-martial: His arraignment was on September 13, 2017, with no plea entered.|||
|Commander Jason W. Starmer||Former Joint United States Military Advisory Group, Thailand||Allegedly took bribes in the form of meals, liquor, patronizing a prostitute, conduct unbecoming an officer, disobeying orders and adultery||Military article 32 hearing began in Norfolk, Virginia on August 30, 2017, with the accused possibly facing court-martial.|||
|Captain Jesus V. Cantu (retired)||assistant chief of staff for logistics, 7th Fleet; deputy commander, Far East Division, Military Sealift Command, Singapore||Admitted taking bribes and the services of prostitutes from Francis until 2013||Pleaded guilty in federal court in San Diego to conspiracy to commit bribery; awaiting sentencing.|||
|Captain John F. Steinberger||Formerly commanded a destroyer squadron attached to the aircraft carrier USS Carl Vinson||His charges include conspiracy, violation of a lawful order, conduct unbecoming an officer, graft and bribery, including accepting discounted and free hotel rooms, food, beverages, and services of prostitutes at or near Hong Kong, Kuala Lumpur, Malaysia, Manila, Philippines and Perth, Australia, in exchange for providing information regarding competitors and his attempts to influence senior officials concerning the husbanding of Navy vessels and port visit location selections.||Arraignment was in Norfolk, Virginia on December 5, 2017. His trial is scheduled for June 7-15, 2018. If convicted on all charges, Steinberger faces a maximum sentence of 14 1/2 years confinement, dismissal from the Navy, forfeiture of all pay and allowances plus a fine.|||
|Chief Warrant Officer Brian T. Ware||Former Food Service Officer for the aircraft carrier, the USS George Washington and the Seventh Fleet Command Ship, the USS Blue Ridge||Charged with taking $8,000 in bribes in the form of hotel rooms, driver service and cellphones during more than twelve port visits and allowing substantial overcharges for provisions.||Pleaded guilty in military court to disobeying lawful orders and accepting graft. Fined $10,000 and sentenced to six months confinement.|||
|Sharon Gursharan Kaur||Former Francis and later Simpkins subordinate, employed by U.S. Navy in contracting||Charged with leaking "confidential contract information to Francis in exchange for $165,000 in cash and luxury travel."||Charged in Singapore courts with bribery in 2016. Pleaded guilty in June 2017 in Singapore state court to corruption and is awaiting sentencing.|||
|Neil Peterson||Vice president of global operations, Glenn Defense||Arranged for prostitutes for corrupt officers||Indicted by a federal grand jury in December 2014; charged with fraud and conspiracy; arrested in Singapore in September 2016 and extradited to San Diego in October 2016; has pleaded guilty. Peterson was sentenced on Aug. 11, 2017 to 70 months in prison.|||
|Linda Raja||General manager for Singapore, Australia and Pacific Isles, Glenn Defense||Fabricated fake billings, bids and invoices.||Indicted by a federal grand jury in December 2014; charged with fraud and conspiracy; arrested in Singapore in September 2016 and extradited to San Diego in October 2016. Pleaded guilty. Raja was sentenced on Aug. 11, 2017 to 46 months in prison.|||
|Unknown individual||Unnamed Glenn Defense employee||Indicted by a federal grand jury in December 2014; charged with fraud and conspiracy charges. The employee is thought to be an Asian; an arrest warrant has been issued. Name has not been made public.|||
|Rear Admiral Adrian Jansen||Former naval attaché to Indonesia and defense attaché to China||Navy investigation determined that Jansen "had an inappropriately familiar relationship" with Francis while serving as the naval attaché to Indonesia by accepting unreported gifts of dinners and wine that exceeded $5,000, in violation of the law and Department of the Navy regulations.||Disciplined by the Navy—received non-judicial punishment by the Navy and forfeited $7,500 in pay in February 2017; retirement pending.|||
|Vice Admiral Michael H. Miller (retired)||Former superintendent of the United States Naval Academy||Along with Kraft and Pimpo, was censured by Secretary of the Navy Ray Mabus "to 'document their failure of leadership' related to dealings with Glenn Defense Marine Asia between 2006 and 2007."||Disciplined by the Navy—received censure in February 2015 and retired in August 2015.|||
|Rear Admiral Terry Kraft (retired)||Former commander, U.S. Naval Forces, Japan||Along with Miller and Pimpo, was censured by Secretary of the Navy "to 'document their failure of leadership' related to dealings with Glenn Defense Marine Asia between 2006 and 2007."||Disciplined by the Navy—received censure in February 2015 and was forced into retirement in July 2015.|||
|Rear Admiral David R. Pimpo (retired)||Former commander, Naval Supply Systems Command||Along with Kraft and Miller, was censured by Secretary of the Navy "to 'document their failure of leadership' related to dealings with Glenn Defense Marine Asia between 2006 and 2007."||Disciplined by the Navy—received censure in February 2015, was demoted to captain, and was forced into retirement in July 2015.|||
|Rear Adm. Kenneth “K.J.” Norton (retired)||Former commander, USS Ronald Reagan||As with Pimpo, Kraft and Miller in 2015, Norton was censured by the incoming Secretary of the Navy, Richard V. Spencer, because he intentionally violated the military Standards of Ethical Conduct, U.S. Navy Regulations, the Joint Ethics Regulation and the Uniform Code of Military Justice “and brought ill-repute and disgrace upon the U.S. Navy.”||Disciplined by the Navy—received censure November 6, 2017. Had retired in 2014.|| |