Third Navy Official Charged Along with Owner of
Singapore-based Glenn Defense Marine Asia
A third senior U.S. Navy official has been charged in a
complaint unsealed today with accepting prostitutes, luxury travel and $100,000
cash from a foreign defense contractor in exchange for classified and internal
U.S. Navy information, announced Acting Assistant Attorney General Mythili
Raman of the Justice Department’s Criminal Division and U.S. Attorney Laura E.
Duffy of the Southern District of California.
U.S. Navy Commander Jose Luis Sanchez, 41, was arrested in
Tampa, Fla., Tuesday evening and made his initial appearance in federal court
in the Middle District of Florida this morning.
Also named in a complaint unsealed today is Leonard Glenn Francis, 49,
of Malaysia, the CEO of Glenn Defense Marine Asia (GDMA), who was arrested on
Sept. 16, 2013, in San Diego.
Two other senior Navy
officials – Commander Michael Vannak Khem Misiewicz, 46, and Naval Criminal
Investigative Service Supervisory Special Agent John Bertrand Beliveau II, 44 –
have been charged separately in connection with bribery allegations. GDMA executive Alex Wisidagama, 40, of
Singapore, has also been charged with participating in a related scheme to
overbill the Navy for services provided in ports throughout Southeast Asia.
“As described in the corruption charges unsealed today,
senior officials with the United States Navy abused their trusted positions as
leaders in our armed forces by peddling favorable treatment -- and even
classified government information -- for their personal benefit,” said Acting
Assistant Attorney General Raman. “In
turn, the GDMA executives who illicitly sought information and favors from
those Navy officials boasted about their unlawful access to those officials and
then traded on the influence that they illegally bought. Day by day, this massive Navy fraud and
bribery investigation continues to widen, and as the charges announced today
show, we will follow the evidence wherever it takes us.”
“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,” said U.S. Attorney Laura Duffy. “While the overwhelming majority of the
400,000 active duty Navy personnel conduct themselves in a manner that is
beyond reproach, we and our law enforcement partners at Naval Criminal
Investigative Service and Defense Criminal Investigative Service continue to
investigate the allegations of fraud and corruption that tarnish the stellar
reputation of the U.S. Navy.”
“The arrest and
criminal complaint against Commander Sanchez is the result of an ongoing
investigation by the Defense Criminal Investigative Service and its law
enforcement partners to identify and prosecute those individuals who would
abuse their positions of trust within the Department of Defense,” said Special
Agent In Charge Chris D. Hendrickson of the Office of the Inspector General,
Department of Defense, Defense Criminal Investigative Service Western Field
Office. “Allegations like these against
Commander Sanchez can tarnish the reputation of honest and hardworking
government personnel and put military personnel defending our nation around the
globe at risk. The mission of DCIS is to
‘Protect America’s Warfighters’ and we will continue to relentlessly identify
and investigate those individuals seeking to enrich themselves at the expense
of the U.S. taxpayers.”
According to the complaint, Sanchez received bribes in
return for sending sensitive U.S. Navy information to Francis, and making
recommendations within the Navy to benefit Francis’s company, GDMA. GDMA is a multinational corporation and
longtime government contractor based in Singapore, which provides hundreds of
millions of dollars of “husbanding” services for the U.S. Navy in at least a
dozen countries throughout the Pacific.
Husbanding involves supplying food, water, fuel, tugboats and fenders,
security, transportation, trash and liquid waste removal, and other goods and
services to ships and submarines in foreign ports.
Like Sanchez, Misiewicz is accused of providing sensitive
Navy information to Francis and secretly working on behalf of GDMA in exchange
for prostitutes and luxury travel. GDMA,
which has operating locations in Japan, Singapore, Thailand, Malaysia, Korea,
India, Hong Kong, Indonesia, Australia, Philippines, Sri Lanka and the United
States, allegedly overcharged the Navy and submitted bogus invoices for
millions of dollars in services.
Beliveau, the NCIS agent, is charged in another complaint with illegally
supplying Francis with sensitive information, including reports of investigations
by NCIS into possible frauds committed by GDMA in billing the U.S. Navy under
its contracts. Wisidagama is charged
with conspiracy to defraud the United States related to the overbilling.
According to court records, Sanchez allegedly provided Francis
with internal Navy information, such as U.S. Navy ship schedules – some of
which were classified – and information about husbanding issues that could
affect GDMA, in order to help GDMA win and maintain Navy business. Court records allege that Sanchez regularly
emailed Francis internal Navy discussions about GDMA, including legal opinions,
and made recommendations in GDMA’s favor about port visits and Navy personnel
assignments. In return, Francis gave
Sanchez over $100,000 in cash, together with travel expenses and
prostitutes. Court records allege that
the conspiracy started in January 2009, when Sanchez was the Deputy Logistics
Officer for the Commander of the U.S. Navy Seventh Fleet in Yokosuka, Japan,
and continued when he was transferred to serve as Director of Operations for
Fleet Logistics Command in Singapore, until he transferred to Florida in April
2013.
Sanchez and Francis allegedly communicated regularly via
email and Facebook. Sanchez referred to
Francis as “Lion King” and “Boss” in the emails, while Francis called Sanchez
“brudda.”
For his part, Francis allegedly hired female escorts for
Sanchez and friends on multiple occasions, on one occasion emailing one escort:
“Hey Love Jose is in Manila at the DIAMOND Hotel go and see him he needs some
love asap.”
According to court records, in an email exchange on Oct. 16,
2009, Sanchez and Francis allegedly discussed a trip Sanchez planned to take to
Kuala Lumpur and Singapore with Navy friends he called his “Wolf Pack.” They discussed the number of rooms the “Wolf
Pack” needed, and Sanchez asked Francis for pictures of prostitutes for
“motivation.” Francis replied: “J, got
it we will hook up after the FLAG dinner, will arrange a nest for you guys and
some birds [women].” A few days later,
on Oct. 19, 2009, Sanchez sent a Facebook message to Francis saying, “Yummy . .
. daddy like.” In an Oct. 23, 2009,
Facebook message, Sanchez asked Francis, “Where r we staying in KL [Kuala
Lumpur]? No pictures to get our spirits
up?”
Between Aug. 26 and 28, 2011, Francis allegedly communicated
through email to the address of an escort whom Francis had previously hired for
Sanchez. Francis wrote: “Hey Love, Jose
is in Manila at the Diamond Hotel go and see him he needs some love asap
room.” The escort responded to Francis,
“Papi, I'm here jose's fon is not answering. I'm here [h]aving dri[n]ks at the
lobby. Call him:: (( maybe his sleeping?”
Later that day, she emailed Francis, “I'm with h[i]m already heehhe.”
Court records alleges that Francis sent an email on Oct. 20,
2011, asking Sanchez to help “swing” business his way regarding a U.S. Navy
ship’s need to refuel at a port in Thailand.
The Navy can use “sea cards” to purchase fuel for its ships at a price
negotiated by the Defense Logistics Agency for Energy, as opposed to procuring
fuel at usually higher prices from the husbanding contractor. In an email from Sanchez the next day, he
told Francis: “Ask and you shall receive...we worked this out this morning…” According to court records, the USS Mustin
did conduct a port visit to Laem Chabang, Thailand, during which it purchased
fuel from GDMA, not via “sea cards.” As
a result, the USS Mustin allegedly paid more than $1 million for fuel – more
than twice what the fuel would have cost through use of the “sea card.”
The criminal complaint alleges that in an alleged Dec. 2,
2011, email discussion in which Sanchez told Francis about the status of an
investigation of GDMA, Francis replied: “I have inside Intel from NCIS and read
all the reports. I will show you a copy of a Classified Command File on me from
NCIS ha ha.”
This ongoing investigation is being conducted by NCIS, the
Defense Criminal Investigative Service, the Defense Contract Audit Agency, and
the Drug Enforcement Administration. The
Criminal Division’s Office of International Affairs provided significant
assistance in this matter, and the Royal Thai Police and the Corrupt Practices
Investigation Bureau Singapore also provided law enforcement assistance. This case is being prosecuted by Assistant
U.S. Attorneys Mark Pletcher and Robert Huie of the Southern District of
California, and Catherine Votaw, Director of Procurement Fraud, and Brian
Young, Trial Attorney, of the Criminal Division’s Fraud Section.
The details contained in the criminal complaints are
allegations. The defendants are presumed
to be innocent unless and until proven guilty beyond a reasonable doubt in a
court of law.
Those with information relating to fraud, corruption or
waste in government contracting should contact the NCIS anonymous tipline at
www.ncis.navy.mil or call the Department of Defense Hotline at (800) 424-9098.
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