Assistant U.S. Attorneys Mark W. Pletcher (619) 546-9714 and Patrick Hovakimian (619) 546-9718

 

NEWS RELEASE SUMMARY – August 18, 2017

 

 

SAN DIEGO – U.S. Navy Captain Jesus Vasquez Cantu admitted in federal court today that he accepted bribes in the form of parties and prostitutes while sneaking proprietary information to foreign defense contractor Leonard Glenn Francis and his Singapore-based firm, Glenn Defense Marine Asia.

 

Twenty-eight individuals, including 21 current and former Navy officials and five civilian defendants, plus GDMA, the corporation, have been charged so far as part of the massive fraud and bribery investigation. Nineteen of these defendants have pleaded guilty. Nine defendants await trial.

 

Cantu, 59, of Silverdale, Washington, pleaded guilty to one count of conspiracy to commit bribery and is scheduled to be sentenced on November 9, 2017 before U.S. District Judge Janis L. Sammartino.

 

In his plea agreement, Cantu acknowledged that Francis took him and others out for drinks and dinners at posh restaurants, nightclubs and karaoke bars and paid for lavish hotel rooms and the services of prostitutes on numerous occasions in 2012 and 2013. Cantu admitted that he provided proprietary U.S. Navy information to Francis, and that he used his power and influence to help Francis and GDMA with their business.

 

“The number of U.S. Navy officials who participated in this conspiracy is astounding,” said Acting U.S. Attorney Alana W. Robinson. “Like so many others, this defendant sold out the Navy and his country for cocktails and karaoke. We are pressing forward in this investigation until we are certain that all involved have been held accountable.”

 

“The guilty plea of Jesus Cantu is another sad chapter in the largest fraud and corruption scandal in the U.S. Navy's history,” said Dermot O'Reilly, Deputy Inspector General for Investigations, Office of Inspector General, Department of Defense. “While the conduct of the vast majority of U.S. Navy personnel is beyond reproach, the unfortunate truth is that for years Leonard Francis and Glenn Defense Marine Asia, compromised the integrity of numerous members of the U.S. Navy. This investigation continues, and the Defense Criminal Investigative Service and its law enforcement partners will relentlessly pursue those individuals involved in this massive corruption scandal.”

 

NCIS Director Andrew Traver said of today’s events, “Captain Cantu, like others caught up in the GDMA scandal, dishonored his sworn oath of office. NCIS, in concert with our partner agencies, remains resolved to following the evidence wherever it may lead, to help hold accountable those who choose personal gratification over duty and professional responsibility.”

 

According to his plea agreement, Cantu served in the Navy until 2014. During the time he was accepting bribes from Francis in 2012 and 2013, Cantu was the deputy commander, Military Sealift Command (MSC) Far East in Singapore. He oversaw the MSC ships that provided logistical sustainment to Navy ships operating in the Seventh Fleet.

 

Cantu also admitted in his plea agreement that, in 2007, when he was the Assistant Chief of Staff for Logistics for the Commander of the U.S. Navy’s Seventh Fleet aboard the USS Blue Ridge, he and others participated in a bribery conspiracy with Francis. Cantu and other members of the conspiracy accepted more than $135,000 in meals, entertainment, travel and hotel expenses, and the services of prostitutes from Francis; in exchange, they worked together to help Francis as issues important to his business arose.

 

Cantu’s 2007 conduct described in the plea agreement is related to the March 2017 indictment of nine high-ranking Seventh Fleet U.S. Navy officers. Retired U.S. Navy Rear Admiral Bruce Loveless and others are accused of conspiring with Francis, trading military secrets and substantial influence for sex parties with prostitutes, extravagant dinners and luxury travel. The others include Captains David Newland, James Dolan, Donald Hornbeck and David Lausman; Colonel Enrico DeGuzman; Lt. Commander Stephen Shedd; Commander Mario Herrera and Chief Warrant Officer Robert Gorsuch. Their cases are pending.

 

The U.S. Navy’s Seventh Fleet represents a vital piece of the United States military’s projection of power as well as American foreign policy and national security. The largest numbered fleet in the U.S. Navy, the Seventh Fleet comprises 60-70 ships, 200-300 aircraft and approximately 40,000 Sailors and Marines. The Seventh Fleet is responsible for U.S. Navy ships and subordinate commands that operate in the Western Pacific throughout Southeast Asia, Pacific Islands, Australia, and Russia and the Indian Ocean territories, as well ships and personnel from other U.S. Navy Fleets that enter the Seventh Fleet’s area of responsibility. The USS Blue Ridge is the command ship of the Seventh Fleet and houses at-sea facilities for Seventh Fleet senior officials.

 

The other current or retired Navy officials charged so far in the fraud and bribery investigation are U.S. Navy Admiral Robert Gilbeau; Captain Michael Brooks; Captain Daniel Dusek; Commander Michael Misiewicz; Commander Jose Luis Sanchez; Commander Bobby Pitts; Commander David Kapaun; Lt. Commander Gentry Debord; Lt. Commander Todd Malaki; Petty Officer First Class Daniel Layug; NCIS Supervisory Special Agent John Beliveau; and Paul Simpkins, a former DoD civilian, who oversaw contracting in Singapore.

 

All have pleaded guilty. On Jan. 21, 2016, Layug was sentenced to 27 months in prison and a $15,000 fine; on Jan. 29, 2016, Malaki was sentenced to 40 months in prison and to pay $15,000 in restitution to the Navy and a $15,000 fine. On March 25, 2016, Dusek was sentenced to 46 months in prison and to pay $30,000 in restitution to the Navy and a $70,000 fine; and on April 29, 2016, Misiewicz was sentenced to 78 months in prison and to pay a fine of $100,000 and to pay $95,000 in restitution to the Navy. Beliveau was sentenced on October 14, 2016 to 12 years in prison and to pay $20 million in restitution; Simpkins was sentenced on December 2, 2016 to 72 months in prison and ordered to pay a fine of $50,000, to forfeit $450,000 of the proceeds of the criminal activity, and to pay $450,000 in restitution to the U.S. Navy; Gilbeau was sentenced on May 17 to 18 months in prison and ordered to pay a $100,000 fine and $50,000 in restitution to the Navy; and Brooks was sentenced on June 16 to 41 months in prison and ordered to pay a $41,000 fine and $31,000 in restitution to the Navy. Sanchez, Pitts and Kapaun await sentencing.

 

Also charged are five GDMA executives – Francis, Alex Wisidagama, Ed Aruffo, Neil Peterson and Linda Raja. All have pleaded guilty; Wisidagama was sentenced on March 18, 2016 to 63 months and $34.8 million in restitution to the Navy; Peterson and Raja were extradited from Singapore in 2016 and sentenced on August 11 to 70 months and 46 months in prison, respectively. Francis and Aruffo await sentencing.

 

Assistant U.S. Attorneys Mark W. Pletcher and Patrick Hovakimian of the Southern District of California and Assistant Chief Brian R. Young of the Criminal Division’s Fraud Section are prosecuting the case.

 

Anyone with information relating to fraud or corruption should contact the NCIS anonymous tip line at www.ncis.navy.mil or the DOD Hotline at www.dodig.mil/hotline, or call (800) 424-9098.

 

DEFENDANT                                                               Case Number: 17CR2376-JLS

 

U.S. Navy Captain Jesus Vasquez Cantu                       Age 59 S                  ilverdale, Washington

 

SUMMARY OF CHARGES

 

Conspiracy to Commit Bribery, in violation of 18 U.S.C. § 371

Maximum Penalty: 5 years in prison, a $250,000 fine,

 

INVESTIGATING AGENCIES

 

Defense Criminal Investigative Service

Naval Criminal Investigative Service

Defense Contract Audit Agency

 

*The charges and allegations contained in an indictment or complaint are merely accusations, and the defendants are considered innocent unless and until proven guilty.

 

 

Assistant U.S. Attorneys Mark W. Pletcher (619) 546-9714 and Patrick Hovakimian (619) 546-9718

 

NEWS RELEASE SUMMARY – March 14, 2017

 

SAN DIEGO – Retired U.S. Navy Rear Admiral Bruce Loveless and David Newland, chief of staff to the Commander of the Navy’s Seventh Fleet, along with seven other high-ranking Navy officers are charged in a federal grand jury indictment with acting as a team of moles for a foreign defense contractor, trading military secrets and substantial influence for sex parties with prostitutes, extravagant dinners and luxury travel.

 

According to a federal grand jury indictment unsealed today, the Navy officers worked together to help Singapore-based defense contractor Leonard Glenn Francis and his company, Glenn Defense Marine Asia, pull off a colossal fraud that ultimately cost the Navy – and U.S. taxpayers – tens of millions of dollars.

 

Navy officers were arrested early this morning in California, Texas, Florida, Colorado and Virginia. The United States will seek their removal to face charges in San Diego. Admiral Loveless was taken into custody at his home in Coronado and was expected to make his first appearance in federal court in San Diego at 2 p.m. before U.S. Magistrate Judge Mitchell D. Dembin. The other defendants are Captains David Newland, James Dolan, Donald Hornbeck and David Lausman; Marine Corps Colonel Enrico DeGuzman; Commander Mario Herrera; Lt. Commander Stephen Shedd and Chief Warrant Officer Robert Gorsuch. DeGuzman is also scheduled to appear before Judge Dembin today at 2 p.m.

 

The defendants face various charges including bribery, conspiracy to commit bribery, honest services fraud and obstruction of justice and making false statements to federal investigators when confronted about their actions. Two defendants – Shedd and Herrera - are active duty; the others are recently retired.

 

The indictment is a veritable 78-page list of allegations in which Francis spent tens of thousands of dollars on bribing the defendants and the actions the officers took to reciprocate. Francis plied the officers with things like foie gras terrine, duck leg confit, ox-tail soup, $2,000 boxes of cigars and $2,000 bottles of rare cognac, plus wild sex parties in fancy hotels.

 

For their part, the defendants allegedly worked in concert to help Francis and GDMA win and keep defense contracts to provide port services to U.S. Navy ships; to redirect ships to ports controlled by Francis in Southeast Asia so he could overbill the Navy for supplies and services such as food, water, fuel, tugboats, and sewage removal; to sabotage competing defense contractors; to recruit new members for the conspiracy by spreading the “Glenn Gospel” to incoming Seventh Fleet leaders; and to keep the conspiracy secret by using fake names and foreign email service providers.

 

Including today’s defendants, a total of 25 named individuals have been charged in connection with the GDMA corruption and fraud investigation. Of those, 20 are current or former U.S. Navy officials; five are GDMA executives. Thirteen have pleaded guilty; other cases are pending.

 

“This is a fleecing and betrayal of the United States Navy in epic proportions, and it was allegedly carried out by the Navy’s highest-ranking officers,” said Acting U.S. Attorney Alana W. Robinson. “The alleged conduct amounts to a staggering degree of corruption by the most prominent leaders of the Seventh Fleet – the largest fleet in the U.S. Navy - actively worked together as a team to trade secrets for sex, serving the interests of a greedy foreign defense contractor, and not those of their own country.”

 

“The defendants in this indictment were entrusted with the honor and responsibility of administering the operations of the U.S. Navy’s Seventh Fleet, which is tasked with protecting our nation by guarding an area of responsibility that spanned from Russia to Southeast Asia and the Indian Ocean,” said Acting Assistant Attorney General Kenneth A. Blanco. “With this honor and awesome responsibility came a duty to make decisions based on the best interests of the Navy and the 40,000 Sailors and Marines under their care who put their lives at risk every day to keep us secure and free. Unfortunately, however, these defendants are alleged to have sold their honor and responsibility in exchange for personal enrichment.”

 

“The allegations contained in today’s indictment expose flagrant corruption among several senior officers previously assigned to the U.S. Navy's Seventh Fleet. The charges and subsequent arrests are yet another deplorable example of those who place their own greed above their responsibility to serve this nation with honor‎,” said Dermot F. O'Reilly, Director, Defense Criminal Investigative Service.

 

“Naval Criminal Investigative Service, in concert with our partner agencies, remains resolved to follow the evidence wherever it leads, and to help hold accountable those who make personal gain a higher priority than professional responsibility,” Special Agent Andrew L. Traver, NCIS Director. “It's unconscionable that some individuals choose to enrich themselves at the expense of military security.”

 

Here’s a sampling of bribes alleged in the indictment:

 

-During the U.S.S. Blue Ridge’s port visit to Sydney Australia on June 17, 2007, Francis hosted and paid for a dinner event at the Altitude Restaurant within the Shangri-La Hotel. Some of the defendants dined on saute of scallops, foie gras, and beef loin for a cost of $11,898. During dinner, defendant Gorsuch handed Francis two floppy disks containing classified port visit information for many U.S. Navy ships, according to the indictment.

 

-In March 2007, Francis hosted and paid for a multi-course dinner for several of the defendants at the Oak Door in Tokyo, Japan. The menu included foie gras, Lobster Thermidor, Sendai Tenderloin, and for dessert, Liberte Sauvage, the winning cake of the 10th Coupe du Monde de la Patisserie 2007, followed by cognac and cigars. Each course was paired with fine champagne or wine. Attendees posed for photographs wearing custom-made GDMA neckties that Francis had given them as gifts.

 

-During one port visit in Singapore on March 9, 2006, Francis seduced the leaders of the Seventh Fleet with foie gras terrine, duck leg confit, ox-tail soup, roasted Chilean sea bass, paired with expensive wine and champagne, followed by digestifs and cigars. The extravagance included $600-a-bottle Hennessy Private Reserve, $2,000-a-bottle Paradis Extra and $2,000-a-box Cohiba Cigars.

 

According to the indictment, the group of officers referred to themselves using various terms, such as “the Cool Kids,” “the Band of Brothers,” “the Brotherhood,” “the Wolfpack,” “the familia,” and “the Lion King’s Harem.” The officers tried to conceal their corrupt relationships by using fictitious names to create email addresses using foreign-based email services.

 

This is the first time multiple officers are charged as working all together in a multi-layered conspiracy, pooling their individual and collective resources and influence on behalf of Francis.

 

In addition to performing various official acts in return for Francis’s booty, these officers are also accused of violating many of the sworn official duties required of them as Navy officers, including duties related to the handling of classified information and duties related to the identification and reporting of foreign intelligence threats.

 

The U.S. Navy’s Seventh Fleet represents a vital piece of the United States military’s projection of power as well as American foreign policy and national security. The largest numbered fleet in the U.S. Navy, the Seventh Fleet comprises 60-70 ships, 200-300 aircraft and approximately 40,000 Sailors and Marines. The Seventh Fleet is responsible for U.S. Navy ships and subordinate commands which operate in the Western Pacific Ocean throughout Southeast Asia, Pacific Islands, Australia, and Russia as well as the Indian Ocean territories, as well ships and personnel from other U.S. Navy Fleets that enter the Seventh Fleet’s area of responsibility. The U.S.S. Blue Ridge is the command-and-control ship of the Seventh Fleet and housed at-sea facilities for Seventh Fleet senior officials.

 

The Seventh Fleet’s motto: Ready Power for Peace.

 

In addition to the nine defendants charged today, the 11 Navy officials charged so far in the fraud and bribery investigation are: Admiral Robert Gilbeau; Captain Michael Brooks; Captain Daniel Dusek; Commander Jose Luis Sanchez; Commander Michael Misiewicz; Commander Bobby Pitts; Lt. Commander Gentry Debord; Lt. Commander Todd Malaki; Petty Officer First Class Daniel Layug; Naval Criminal Investigative Service Supervisory Special Agent John Beliveau; and Paul Simpkins, a former DoD civilian employee, who oversaw contracting in Singapore.

 

Gilbeau, Brooks, Dusek, Misiewicz, Sanchez, Debord, Malaki, Layug, Beliveau, and Simpkins have pleaded guilty. On Jan. 21, 2016, Layug was sentenced to 27 months in prison and a $15,000 fine; on Jan. 29, 2016, Malaki was sentenced to 40 months in prison and to pay $15,000 in restitution to the Navy and a $15,000 fine. On March 25, 2016, Dusek was sentenced to 46 months in prison and to pay $30,000 in restitution to the Navy and a $70,000 fine; and on April 29, 2016, Misiewicz was sentenced to 78 months in prison and to pay a fine of $100,000 and to pay $95,000 in restitution to the Navy. Beliveau was sentenced on October 14, 2016 to 12 years in prison and to pay $20 million in restitution; Simpkins was sentenced on December 2, 2016 to 72 months in prison; Gilbeau, Brooks, and Sanchez await sentencing. Pitts was charged in May 2016 and his case is pending.

 

Also charged are five GDMA executives – Francis, Alex Wisidagama, Edmund Aruffo, Neil Peterson and Linda Raja. Three have pleaded guilty; Wisidagama was sentenced on March 18, 2016 to 63 months in prison and $34.8 million in restitution to the U.S. Navy. Francis and Aruffo await sentencing. Peterson and Raja were extradited to the United States from Singapore in September 2016 and their cases remain pending.

 

The Defense Criminal Investigative Service, Naval Criminal Investigative Service, and the Defense Contract Audit Agency are investigating. Assistant U.S. Attorneys Mark W. Pletcher and Patrick Hovakimian of the Southern District of California and Assistant Chief Brian R. Young of the Criminal Division’s Fraud Section are prosecuting the case.

 

Anyone with information relating to fraud or corruption should contact the NCIS anonymous tip line at www.ncis.navy.mil or the DOD Hotline at www.dodig.mil/hotline, or call (800) 424-9098.

Indictment Document (click here)

 

DEFENDANTS                  Case Number: 17CR0623-JLS

 

Captain David Newland Age 60 San Antonio, Texas

Chief of Staff to the Commander of the Seventh Fleet

 

Colonel Enrico DeGuzman Age 58 Honolulu, Hawaii

Fleet Marine Office of the Seventh Fleet, responsible for coordinating the missions of the U.S. Marine Corps with the Seventh Fleet; and Assistant Chief of Staff of Operations for U.S. Marine Corps Forces, Pacific

 

Captain James Dolan Age 58 Gettysburg, Pennsylvania

Assistant Chief of Staff for Logistics for the Seventh Fleet, responsible for meeting the logistical needs of every ship within the Seventh Fleet’s area of responsibility

 

Captain Donald Hornbeck Age 56 United Kingdom

Deputy Chief of Staff for Operations for the Seventh Fleet, responsible for directing the operations of all combatant ships in the Seventh Fleet area of responsibility

 

Rear Admiral, Retired, Bruce Loveless Age 53 Coronado, CA

Previously a Captain and Assistant Chief of Staff for Intelligence for the Seventh Fleet, responsible for assessing and counteracting foreign intelligence threats within the Seventh Fleet’s area of responsibility

 

Captain David Lausman Age 62 The Villages, Florida

Executive Officer of the aircraft carrier U.S.S. Abraham Lincoln; Commanding Officer of U.S.S. Blue Ridge; Commanding Officer of U.S.S. George Washington

 

Lt. Commander Stephen Shedd Age 43 Colorado Springs, CO

Seventh Fleet’s South Asia Policy and Planning Officer, responsible for identifying ports that U.S. Navy ships would visit; and once promoted to Commander, served as Executive Officer and Commanding Officer of the U.S.S. Milius

 

Commander Mario Herrera Age 48 Helotes, Texas

Fleet Operations and Schedules Officer for the Seventh Fleet, responsible for scheduling the port visits for ships and submarines in the Seventh Fleet’s area of responsibility (Herrera was previously charged in February 2017 via complaint)

 

Chief Warrant Officer Robert Gorsuch Age 49 Virginia Beach, Virginia

Seventh Fleet’s Flag Administration Officer, responsible for providing administrative support to the Seventh Fleet Commander and other senior officers on the Seventh Fleet staff

 

SUMMARY OF CHARGES

 

Conspiracy to Commit Bribery, in violation of 18 U.S.C. § 371

Maximum Penalty: 5 years in prison, a $250,000 fine, or twice the gross pecuniary gain or twice the gross pecuniary loss, whichever is greater

 

Bribery, in violation of 18 U.S.C. § 201

Maximum Penalty: 15 years in prison, a $250,000 fine or twice the gross pecuniary gain or gross pecuniary loss from the offense, or three times the monetary equivalent of the thing of value, whichever is greater

 

False Statements, in violation of 18 U.S.C. § 1001

Maximum Penalty: 5 years in prison, a $250,000 fine

 

Obstruction of Justice, in violation of 18 U.S.C. § 1519

Maximum Penalty: 20 years in prison, a $250,000 fine

 

Conspiracy to Commit Honest Services Wire Fraud, in violation of 18 U.S.C. §§ 1349, 1346, 1343

Maximum Penalty: 20 years in prison, a $250,000 fine

 

 

INVESTIGATING AGENCIES

 

Defense Criminal Investigative Service

Naval Criminal Investigative Service

Defense Contract Audit Agency

 

*The charges and allegations contained in an indictment or complaint are merely accusations, and the defendants are considered innocent unless and until proven guilty.

 

BREAKDOWN OF COUNTS

 

 





Counts





Code





Description





Defendant(s)





1





18 U.S.C. § 371





Conspiracy to Commit Bribery





All





2





18 U.S.C § 201(b)(2)(A) and (C)





Bribery





Newland





3





18 U.S.C § 201(b)(2)(A) and (C)





Bribery





DeGuzman





4





18 U.S.C § 201(b)(2)(A) and (C)





Bribery





Hornbeck





5





18 U.S.C § 201(b)(2)(A) and (C)





Bribery





Dolan





6





18 U.S.C § 201(b)(2)(C)





Bribery





Loveless





7





18 U.S.C § 201(b)(2)(A) and (C)





Bribery





Lausman





8





18 U.S.C § 201(b)(2)(A) and (C)





Bribery





Herrera





9





18 U.S.C § 201(b)(2)(A) and (C)





Bribery





Shedd





10





18 U.S.C § 201(b)(2)(A) and (C)





Bribery





Gorsuch





11





18 U.S.C. § 1001(a)(2)





False Statements





Lausman





12





18 U.S.C. § 1519





Obstruction





Lausman





13





18 U.S.C. §§ 1349, 1346, and 1343





Conspiracy to Commit Honest Services Wire Fraud





All





 

 

 

 

 

 

 

 

Assistant U.S. Attorneys Mark W. Pletcher (619) 546-9714 and Patrick Hovakimian (619) 546-9718

 

NEWS RELEASE SUMMARY – February 16, 2017

 

SAN DIEGO – U.S. Navy Commander Mario Herrera was charged in a complaint unsealed today with accepting prostitutes, luxury travel, elaborate dinners and $1,800 steaks from foreign defense contractor Leonard Glenn Francis in exchange for classified and internal U.S. Navy information.

 

Herrera, the 12th U.S. Navy official to be charged so far, was arrested in San Antonio, Texas this morning and is scheduled to make his initial appearance in federal court in the Western District of Texas. The United States will seek removal of Herrera to San Diego to face charges.

 

According to the complaint, Herrera received bribes in return for sending U.S. Navy ship schedules and other proprietary information to Francis, sometimes through U.S. Navy Commander Jose Luis Sanchez, who was among the first officers charged in the massive bribery and fraud case in 2013. Sanchez pleaded guilty to bribery charges in January 2015 and awaits sentencing.

 

Hererra, Sanchez and other U.S. Navy 7th Fleet officers who were committed to doing the bidding of Francis in exchange for prostitutes and other perks called themselves the “Band of Brothers” and the “Wolf Pack,” the complaint said. In one email, Sanchez asked Francis to send pictures of prostitutes, saying “the brothers are ready to indulge.” A few days later in another email, Sanchez thanked Francis for the prostitutes and hotel accommodations during a port stop in Manila, Philippines: “A warm thank you from the brotherhood…we thoroughly enjoyed ourselves and had a great time.”

 

The complaint also alleges that Herrera made recommendations within the Navy to benefit Francis’ company, Glenn Defense Marine Asia, including on several occasions manipulating the movement of U.S. Navy ships and diverting them to ports financially lucrative to Francis. 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.

 

So far, a total of 17 named individual defendants have been charged in connection with the GDMA corruption and fraud investigation. Of those, 12 are current or former U.S. Navy officials, including Herrera, Sanchez, Admiral Robert Gilbeau, believed to be the first active-duty U.S. Navy flag officer charged in a federal criminal case; Captain (ret.) Michael Brooks; Captain Daniel Dusek; Commander Michael Misiewicz; Commander Bobby Pitts; Lt. Commander Gentry Debord; Lt. Commander Todd Malaki; Petty Officer First Class Daniel Layug; Naval Criminal Investigative Service Supervisory Special Agent John Beliveau; and Paul Simpkins, a former DoD civilian employee, who oversaw contracting in Singapore.

 

Gilbeau, Brooks, Dusek, Misiewicz, Sanchez, Debord, Malaki, Layug, Beliveau, and Simpkins have pleaded guilty. On Jan. 21, 2016, Layug was sentenced to 27 months in prison and a $15,000 fine; on Jan. 29, 2016, Malaki was sentenced to 40 months in prison and to pay $15,000 in restitution to the Navy and a $15,000 fine. On March 25, 2016, Dusek was sentenced to 46 months in prison and to pay $30,000 in restitution to the Navy and a $70,000 fine; and on April 29, 2016, Misiewicz was sentenced to 78 months in prison and to pay a fine of $100,000 and to pay $95,000 in restitution to the Navy. Beliveau was sentenced on October 14, 2016 to 12 years in prison and to pay $20 million in restitution; Simpkins was sentenced on December 2, 2016 to 72 months in prison; Gilbeau, Brooks, and Sanchez await sentencing.

 

Pitts was charged in May 2016 and his case is pending.

 

Also charged are five GDMA executives – Francis, Alex Wisidagama, Ed Aruffo, Neil Peterson and Linda Raja. Three have pleaded guilty; Wisidagama was sentenced on March 18, 2016 to 63 months and $34.8 million in restitution to the Navy. Francis and Aruffo await sentencing; Peterson and Raja were extradited from Singapore in September 2016 and their cases are pending.

 

The Defense Criminal Investigative Service, Naval Criminal Investigative Service, and the Defense Contract Audit Agency are investigating. Assistant U.S. Attorneys Mark W. Pletcher and Patrick Hovakimian of the Southern District of California and Assistant Chief Brian R. Young of the Criminal Division’s Fraud Section are prosecuting the case.

 

Anyone with information relating to fraud or corruption should contact the NCIS anonymous tip line at www.ncis.navy.mil or the DOD Hotline at www.dodig.mil/hotline, or call (800) 424-9098.

 

DEFENDANT Case Number: 17mj0424

Lieutenant Commander Mario Herrera Age 48 Helotes, Texas

 

SUMMARY OF CHARGES

 

Conspiracy to Commit Bribery, in violation of 18 U.S.C. § 371

Maximum Penalty: 5 years in prison, a $250,000 fine,

 

INVESTIGATING AGENCIES

 

Defense Criminal Investigative Service

Naval Criminal Investigative Service

Defense Contract Audit Agency

 

 

Assistant U.S. Attorneys Mark W. Pletcher (619) 546-9714 and Patrick Hovakimian (619) 546-9718

 

NEWS RELEASE SUMMARY – January 12, 2017

 

SAN DIEGO – U.S. Navy Lieutenant Commander Gentry Debord, who was named U.S. Navy Supply Officer of the Year while he was secretly accepting bribes and prostitutes from a foreign defense contractor in exchange for confidential information, was sentenced in federal court today to 30 months in prison.

 

Debord, 41, who pleaded guilty in October 2016 to a bribery charge, was also ordered to pay a $15,000 fine and $37,000 in restitution to the Navy. Debord has admitted that he accepted cash, luxury hotels and prostitutes from foreign defense contractor Leonard Glenn Francis between 2007 and 2013. In return he provided proprietary Navy information that benefitted Francis’ company, Singapore-based Glenn Defense Marine Asia.

 

During today’s hearing, U.S. District Judge Janis L. Sammartino told the defendant that he picked the wrong side. “You were clearly on their team and not the Navy’s team.”

 

Acting U.S. Attorney Alana Robinson said: “This is a fitting sentence for a man who sullied his stripes with such despicable behavior. We will continue to move forward in this investigation until all involved are held accountable.”

 

According to his plea agreement, from November 2007 to January 2013, Debord provided Francis and others with internal, proprietary U.S. Navy information; directed Francis and GDMA to inflate invoices to reflect services not rendered; advocated for the U.S. Navy to procure items from GDMA under its husbanding contracts; and otherwise used his position and influence in the U.S. Navy to advocate for and advance GDMA’s interests, as opportunities arose.

 

During the conspiracy, Debord was a supply officer aboard the U.S.S. Essex and later became a logistics officer for the Pacific Fleet. As a supply officer, Debord was responsible for procuring goods and services to meet the ship’s logistical and supply needs and for confirming that the U.S. Navy’s contractors provided these services. As logistics officer, he helped direct ship movements and port visits in the Western Pacific region.

 

As part of this conspiracy, Debord, Francis and others attempted to conceal the nature and extent of their relationship, by, among other things, using fictitious email accounts to communicate and using coded language and other means designed to obfuscate the true nature of their corrupt relationship, including referring to prostitutes as “cheesecakes” and “bodyguards.”

 

For example, on or about February 26, 2008, Debord emailed a GDMA executive to ask him to provide the services of prostitutes during the U.S.S. Essex’s upcoming port visit to Manila, Philippines: “[D]ouble checking to see if I will have my security for the 2nd and the 4th. I however do not want anyone to know I have a bodyguard.” The executive responded: “Bodyguards are standing by.”

 

About eight months later, around October 30, 2008, Debord emailed GDMA executives advising them that the U.S. Navy’s ship husbanding contract in the Philippines was “coming up for renew[al],” and asking that GDMA provide him with an apartment in conjunction with an upcoming port visit by the U.S.S. Essex to Hong Kong. Debord noted that he and another GDMA employee “had fun up [near Clark Air Force Base,] ate lots of cheesecake, even ate some in a group session.”

 

From May 2010 until December 2011, Debord was specially selected to attend the Naval Postgraduate School in Monterey, California, during which time he was not in direct contact with GDMA.

 

In December 2011, however, Debord accepted a position in Singapore, putting him again in close proximity to GDMA. On or about May 26, 2012, after recognizing Debord’s name on an email chain regarding fuel issues, GDMA’s Vice President of Global Operations Neil Peterson executive emailed another GDMA employee, “Look at who's the replenishment officer for ctf73, you remember sex crazy LT Debord from Essex!” Peterson emailed Debord on May 28, 2012 and invited him out for “cheesecake…just like the good ol days.”

 

So far, a total of 16 named individual defendants have been charged in connection with the GDMA corruption and fraud investigation. Of those, 11 are current or former U.S. Navy officials, including Debord, Admiral Robert Gilbeau, believed to be the first active-duty U.S. Navy flag officer charged in a federal criminal case; Captain (ret.) Michael Brooks; Commander Bobby Pitts; Captain Daniel Dusek; Commander Michael Misiewicz; Lt. Commander Todd Malaki; Commander Jose Luis Sanchez; Petty Officer First Class Daniel Layug; Naval Criminal Investigative Service Supervisory Special Agent John Beliveau; and Paul Simpkins, a former DoD civilian employee, who oversaw contracting in Singapore.

 

Debord, Brooks, Gilbeau, Dusek, Misiewicz, Malaki, Beliveau, Sanchez, Layug, and Simpkins have pleaded guilty. On Jan. 21, 2016, Layug was sentenced to 27 months in prison and a $15,000 fine; on Jan. 29, 2016, Malaki was sentenced to 40 months in prison and to pay $15,000 in restitution to the Navy and a $15,000 fine. On March 25, 2016, Dusek was sentenced to 46 months in prison and to pay $30,000 in restitution to the Navy and a $70,000 fine; and on April 29, 2016, Misiewicz was sentenced to 78 months in prison and to pay a fine of $100,000 and to pay $95,000 in restitution to the Navy. Beliveau was sentenced on October 14, 2016 to 12 years in prison and to pay $20 million in restitution; Simpkins was sentenced on December 2, 2016 to 72 months in prison; Brooks, Gilbeau and Sanchez await sentencing.

 

Pitts were charged in May 2016 and his case are pending.

 

Also charged are five GDMA executives – Francis, Alex Wisidagama, Ed Aruffo and Neil Peterson and Linda Raja. Three have pleaded guilty; Wisidagama was sentenced on March 18, 2016 to 63 months and $34.8 million in restitution to the Navy. Francis and Aruffo await sentencing; Peterson and Raja were extradited from Singapore in September 2016 and their cases are pending.

 

In the government’s sentencing memorandum, Assistant U.S. Attorney Mark Pletcher wrote that Debord’s conduct was particularly galling considering he received a prestigious award while he was in cahoots with Francis. “Ultimately, that Debord was effectively working for GDMA and against the U.S. Navy in dereliction of his official duties at the same time as being awarded the Supply Officer of the Year Award is an unparalleled example of duplicity, even considering the high bar set by the industrious cast of defendants in this investigation.”

 

The Defense Criminal Investigative Service, Naval Criminal Investigative Service, and the Defense Contract Audit Agency are investigating. Assistant U.S. Attorneys Mark W. Pletcher and Patrick Hovakimian of the Southern District of California and Assistant Chief Brian R. Young of the Criminal Division’s Fraud Section are prosecuting the case.

 

Anyone with information relating to fraud or corruption should contact the NCIS anonymous tip line at www.ncis.navy.mil or the DOD Hotline at www.dodig.mil/hotline, or call (800) 424-9098.

 

DEFENDANT                                                      Case Number: 16cr1457-JLS

Lieutenant Commander Gentry Debord                Age 41 San Diego

 

SUMMARY OF CHARGES

 

Conspiracy to Commit Bribery, in violation of 18 U.S.C. § 371

Maximum Penalty: 5 years in prison, a $250,000 fine,

 

INVESTIGATING AGENCIES

 

Defense Criminal Investigative Service

Naval Criminal Investigative Service

Defense Contract Audit Agency