Third officer charged in US navy corruption case | South China Morning Post
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  • Apr 19, 2015
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CORRUPTION

Third officer charged in US navy corruption case

Officer accepted prostitutes and bribes in scam centred on manoeuvring US warships around Asia to maximise profits, prosecutors claim

PUBLISHED : Thursday, 07 November, 2013, 10:16pm
UPDATED : Friday, 08 November, 2013, 10:38am
 

A third US Navy officer has been charged with accepting bribes and prostitutes as part of a widening corruption scandal involving a prominent Malaysian businessman accused of directing the movements of US warships around Asia to his advantage.

US Navy commander Jose Luis Sanchez was arrested in Tampa, Florida. He is accused in a criminal complaint of accepting prostitutes, US$100,000 cash and other bribes from Leonard Glenn Francis, the Malaysian CEO of Singapore-based Glenn Defense Marine Asia Ltd., or GDMA.

Prosecutors say that, in exchange, Sanchez passed on classified US Navy information to a contractor known as "Fat Leonard", whose company had serviced Navy ships in the Pacific for 25 years and is accused of charging the Pentagon by millions of US dollars.

Wednesday's arrest marks the latest development in the case which is rocking the Navy.

Francis and his co-accused moved US Navy vessels around Asia like chess pieces, diverting aircraft carriers, destroyers and other ships to ports with lax oversight where Francis could inflate costs, the criminal complaint alleges.

Officials were willing to sacrifice their integrity and … taxpayer dollars
US ATTORNEY LAURA DUFFY

The accusations signal serious national security breaches and corruption and has set off high-level meetings at the Pentagon with the threat that more people, including those of higher ranks, could be swept up as the investigation continues.

"According to the allegations in this case, a number of officials were willing to sacrifice their integrity and millions of taxpayer dollars for personal gratification," US Attorney Laura Duffy said after Wednesday's arrest.

The two other senior officials arrested in recent weeks in the case are Navy Commander Michael Vannak Khem Misiewicz — who like Sanchez, is accused of giving Francis' company confidential information about Navy ship routes — and a senior Navy investigator, John Beliveau II.

Prosecutors allege that Beliveau, 44, kept Francis abreast of the bribery probe and advised him on how to respond in exchange for such things as prostitution services.

GDMA overcharged the Navy millions of US dollars for fuel, food and other services it provided, and invented tariffs by using phoney port authorities, prosecutors say.

Francis, 49, was arrested in San Diego in September. A few weeks later, authorities arrested his company's general manager of global government contracts, Alex Wisidagama, 40.

Misiewicz, Beliveau, Francis and Wisidagama have pleaded not guilty.

Court records allege that Sanchez regularly e-mailed Francis details on internal Navy discussions about GDMA, including legal opinions, and made recommendations in GDMA's favour about port visits and assignments of Navy personnel.

The conspiracy began in January 2009, when Sanchez was the deputy logistics officer for the commander of the Navy's 7th Fleet in Yokosuka, Japan, according to charging documents.

Francis, who is well known in Navy circles in Asia, hired prostitutes for Sanchez and friends on multiple occasions, according to the investigation.

In one 2009 e-mail exchange, Sanchez and Francis discussed a trip Sanchez planned to take to Kuala Lumpur and Singapore with Navy friends he called his "Wolf Pack," according to the complaint.

Sanchez asked Francis for pictures of prostitutes for "motivation." Francis replied that he would take care of it.

A few days later, Sanchez allegedly sent a Facebook message to Francis saying: "Yummy ... daddy like."

Shortly after that, Francis sent an e-mail asking Sanchez to help "swing" business his way regarding a US Navy ship's need to refuel in Thailand. As a result, the USS Mustin paid more than US$1 million for fuel from GDMA at the Thai port — more than twice what the fuel should have cost, prosecutors allege.

Acting Assistant Attorney General Raman said the GDMA executives "boasted" about their unlawful dealings. The defendants could face up to five years in prison if convicted of conspiracy to commit bribery. The US government has suspended its contracts with Francis.

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