Malaysian Leonard Francis, nicknamed "Fat Leonard", is alleged to have used his US Navy connections to obtain military secrets by providing hookers, Lady Gaga concert tickets and other bribes to a US commander.
Francis is well-known to US Navy commanders in the Pacific, where his company has been servicing US warships for the past 25 years. CNN reported that the accusations unfolding in a Federal Court case in San Diego signalled serious national security breaches and corruption.
Navy commander Michael Vannak Khem Misiewicz has been accused of using his position as deputy operations officer of the US Seventh Fleet to pass confidential information on ship routes to Francis's Singapore-based company, Glenn Defence Marine Asia Ltd (GDMA), according to court documents CNN obtained.
GDMA provides various shipping services including tugboats, security, transportation, supplies, fuel and waste removal.
CNN reported that the 46-year-old Misiewicz and Francis moved Navy vessels around like chess pieces, diverting aircraft carriers, destroyers and other vessels to Asian ports with lax oversight, allowing the latter to inflate costs.
GDMA is alleged to have overcharged the US Navy millions for fuel, food and other services it provided. Tariffs were also invented through the use of phony port authorities, court prosecutors read out in their charges.
CNN quoted retired Rear Admiral Terry McKnight as saying a lot of people are wondering how this could have happened.
McKnight, who does not have direct knowledge of the investigation, said it was a huge scandal when one person was being influenced by a contractor and dictating where ships were going to go.
Authorities have thus far arrested Misiewicz, Francis, GDMA's general manager of global government contracts, Alex Wisidagama, and a senior Navy investigator, John Beliveau. All four have pleaded not guilty and their defence attorneys have declined to comment.
The 44-year-old Beliveau has been accused of keeping Francis abreast of developments in the probe and advising him on how to respond in exchange for luxury trips and vice services, CNN reported.
Senior Navy officials have indicated that more people are likely to be implicated in the scandal.
There have been reports that other unnamed Navy personnel are mentioned in the court documents as receiving gifts from Francis, who is reported to be legendary in the military circle in the Pacific. The Straits Times reported that Francis is famous for his extravagance.
His 70,000sq ft bungalow in an upscale Singapore neighbourhood has been drawing spectators since 2007 to its lavish, outdoor Christmas decorations. The Straits Times described Francis's bungalow decorations as rivalling the island city's main shopping street with replicas of snowmen, lighted towering trees, and Chinese and Japanese ornaments.
McKnight told The Straits Times that Francis was a larger than life figure, saying you could ask any captain on any ship that has sailed in the Pacific and everyone knew exactly who Francis was.
The probe against Francis was initiated by Navy Criminal Investigative Service agents in 2010.
That was also the year Misiewicz caught the world's attention when he made an emotional return as a U.S Navy commander to his native Cambodia. Misiewicz had been rescued as a child from the violence of the Khmer Rouge and adopted by an American woman.
His homecoming was widely covered by international media and CNN reported that Francis was also recruiting Misiewicz for his scheme, citing court documents.
Misiewicz's family allegedly went to a Lion King production in Tokyo with a GDMA employee and was offered prostitution services.
Within months, court prosecutors said, the Navy commander was providing Francis with ship movement schedules for the USS George Washington Carrier Strike Group and other ships. It was also alleged that shortly after that, the GDMA manager wrote to Francis saying "We got him!!:)".
Misiewicz referred to Francis as "Big Brother" or "Big Bro" in emails from a personal account while the latter would call him "Little Brother" or "Little Bro", according to court documents. GDMA is alleged to have bilked the Navy out of US$10 million (RM32 million) in just one year in Thailand alone.
The US has suspended its contracts with Francis who, along with the other three suspects, face up to five years in prison if convicted of conspiracy to commit bribery. – November 5, 2013.
The many faces of Leonard Glenn Francis
Fat Leonard
Born in Penang, he was nicknamed Fat Leonard, Lion King and Big Bro by those in navy circles because of his size.
He is more than 1.8m tall and weighs 158kg, according to court documents. His run-ins with the law have been just as big.
Malaysian newspaper The Star reported that he was sentenced to three years in jail and six strokes of the cane by the High Court in Penang on two counts of firearms possession in 1989.
He was only 21 when he was found with two revolvers.
Back then, Francis attended an expensive private school.
The paper reported that he was influenced by undesirable characters after he opened a pub.
That business left him in debt.
In mitigation, his mother claimed that she had neglected Francis and left him with the task of keeping an eye on his philandering father after she left home with his siblings.
Francis, who was described as an obedient son to his mother, was to make sure that his father did not bring other women home.
His differences with his father were stressful and could have resulted in Francis mixing with bad company when he was younger, according to veteran Malaysian lawyer C.V. Prabhakaran, who represented Francis years ago.
Huge case
Two admirals are under investigation and were placed on leave last Friday.
This follows the earlier arrests of two navy commanders and a senior Naval Criminal Investigative Service agent.
In addition, a captain was relieved of his ship's command last month in connection with the case.
Francis' company, Glenn Defence Marine (Asia), which provided naval logistics and "husbanding" services, has been accused of bribing these people.
He is listed as the director of Glenn Defence Marine, according to checks with the Accounting and Corporate Regulatory Authority.
Apart from the US Navy, its clients include the militaries of countries like Argentina, Germany and India, according to its website.
Fat Leonard's role
Leonard Glenn Francis, or Fat Leonard, as he is known in navy circles, allegedly bribed officials with prostitutes, expensive holidays and tickets to concerts.
In return, they passed confidential information on ship routes to Francis' Singapore-based company, Glenn Defence Marine (Asia).
This allowed him to profit from his dealings with the US Navy.
Vessels were steered to specific Asian ports, such as Phuket in Thailand and Malaysia's Port Klang, where he would overcharge the navy for services, including providing fuel, tugboats, sewage disposal and wharfside security.
Francis eluded arrest for years because he had also bribed officials for information on law enforcement probes and contract audits.
So far, two navy commanders and an agent with the Naval Criminal Investigative Service (NCIS) have been arrested. Two admirals were placed on leave on Friday.
The US Navy's chief spokesman, Rear Admiral John F. Kirby, told the Washington Post last week that more navy officials are expected to be implicated in the scandal.
NCIS started its probe in 2010.
Francis was arrested in San Diego in September after federal investigators lured him to the US on the pretext of a business meeting with navy officials.
Another Glenn Defence Marine executive, Alex Wisidagama, was arrested as well.
Francis is being held without bail after prosecutors argued that he posed a flight risk.
Role in bribery scandal
Arrested
Navy Commander Michael Misiewicz
- Provided classified information about where US ships would port.
- Recommended that ships visit ports preferred by Leonard Glenn Francis.
- Received kickbacks like tickets for his family to a Lion King show in Tokyo, prostitutes, free travel and tickets to a Lady Gaga concert.
Naval Criminal Investigative Service (NCIS) agent John Beliveau
- Collected information on a US probe into Glenn Defence Marine (Asia) and passed it to Francis.
- Received kickbacks such as a threeweek trip to Asia, prostitutes and a laptop for his girlfriend.
Navy Commander Jose Luis Sanchez
- Provided classified information about ship movements to Glenn Defence Marine (Asia).
- Partied with navy friends and prostitutes in hotels across Asia, all paid for by Francis.
Placed on leave
Vice-Admiral Ted "Twig" Branch, the service's top intelligence officer, and Rear Admiral Bruce Loveless, the US Navy's director of intelligence operations.
- Under investigation as part of the scandal involving Glenn Defence Marine (Asia). They no longer have access to classified material.
- The Navy said their alleged misconduct occurred before their current assignments and before they became admirals, reported the Washington Post.
Who steered ships toward 'Fat Leonard'?
A few middle managers drive lucrative ship schedules UT St Diego
While Navy officers seem to be dropping right and left in the “Fat Leonard” Asia bribery scandal, people familiar with how port calls work say only a few middle-management paper-pushers really drive ship schedules, and all the money that follows in their wake.
Malaysian businessman Leonard Francis, charged in federal court in San Diego with bribing Navy officers, appears to have targeted the Navy’s soft center: deskbound administrators.
Retired Navy officers say the scenario of a few well-placed bad apples makes more sense than widespread graft among Navy skippers docking in Asia.
“I think Leonard pushed, pushed, pushed, and he eventually found a couple of guys who were seduced into behavior that they had to know was grossly inappropriate,” said retired Capt. Kevin Eyer, a San Diego resident who commanded three Navy cruisers during his career.
“I actually do find all of this to be outrageous and surprising and it really does challenge my imagination. Do I believe it happened? I do.”
U.S. Attorney Laura Duffy alleges that Francis defrauded the Navy of millions of dollars since at least 2009 with the help of Cmdrs. Michael Misiewicz and Jose Luis Sanchez, mid-level officers on the operations and logistics staff of the U.S. Seventh Fleet in Asia.
They allegedly steered ships to ports where Francis’ company has a stronghold or gave him ship schedules and behind-the-scenes details of Navy contracting strategy. Francis — known in Navy circles in Asia as “Fat Leonard” because of his size — and Sanchez have hearings in downtown San Diego on Wednesday and Thursday.
A Naval Criminal Investigative Service agent in Virginia, John Beliveau, has also been charged. He is alleged to have leaked details of the investigation to Francis.
The scandal rocketed up the Navy chain of command Nov. 8 when a three-star and a two-star admiral were implicated, stripped of classified access and placed on leave, though not charged.
The Navy won’t say what the allegations against Vice Adm. Ted Branch and Rear Adm. Bruce Loveless are, just that they pertain to jobs held before they donned stars.
The word around Navy circles is that ship skippers who made port calls in Asia are being scrutinized, as they have advance notice of ship movements and can ask for certain port calls.
Branch commanded the San Diego-based aircraft carrier Nimitz in 2004 and 2005, back when he was a captain.
In early October, the Navy removed Capt. Daniel Dusek as skipper of the Japan-based amphibious ship Bonhomme Richard. The reason given was a U.S. Justice Department investigation that “negatively affected Dusek’s leadership ability and was a distraction.” Insiders say it was the bribery investigation.
There is some concern the case might become overblown and result in guilt by association.
“Here’s the problem that I worry could happen. Let’s say our last night in port we got invited to a dinner party. It’s somebody from the embassy and the husbanding agent (Francis’ job) was there,” said one retired three-star admiral who spoke on background because of his current job.
“I’m thinking back on this 15 years later, I didn’t pay any attention to who paid the bill. It could have been the husbanding agent who paid.”
According to federal complaints Misiewicz and Sanchez took more than just a free chicken dinner.
The two officers allegedly got cash, luxury trips, prostitutes and even Lady GaGa and Lion King tickets.
Francis and his company Glenn Defense Marine Asia apparently first targeted Misiewicz when the officer was skipper of the Mustin, a Japan-based destroyer.
But a Glenn Defense manager — the unnamed former Navy officer “EA” identified in court papers as a San Diego resident — already knew Misiewicz’s next assignment was deputy operations officer for the Seventh Fleet.
In that job, beginning in January 2011, Misiewicz had his hand on the deployment schedules of U.S. ships, subs and aircraft from Japan to Russia to Australia.
“We are changing faces, but keeping our lines of communications with C7F (commander, Seventh Fleet),” the manager wrote to Francis in an email.
Who was the prior “face” at the Navy’s headquarters in Asia?
Sanchez was deputy logistics officer there from April 2008 to April 2010, leaving one month before Glenn Defense began grooming Misiewicz.
The difference between an aircraft carrier pulling into Yokosuka, where it docks at a military base, and pulling into one of Francis’ “pearl ports” is pretty big money.
For example, in early January 2012 the aircraft carrier Abraham Lincoln visited Laem Chabang, Thailand, instead of Manila in the Philippines.
According to court documents, Misiewicz told Francis in an email that he was “fighting hard” to keep the carrier on course for Laem Chabang, where Glenn Defense was the big player.
Francis’ company invoiced the Navy $884,000 for services such as food, fuel and cars during that stop, of which $500,000 is alleged to be overbilled.
The calculus of port visits is fairly complicated, according to retired officers.
A ship on a six-month deployment will get roughly seven port calls. The skipper can ask for his preferred ports — Hong Kong and Phuket, Thailand, for example. Like his sailors, the ship’s commanding officer wants fun towns with lots to do during his time off.
But political considerations also come into play. U.S. interests dictate that American warships stop at ports where diplomatic ties need to be tended to, such as Vietnam. Other port calls, such as in Yokosuka and Guam, are working breaks that might include meetings and ship maintenance.
In Asia, the final itinerary is handed down from Seventh Fleet. The Navy’s local Fleet Logistics Commands oversee long-term ship services contracts with companies such as Glenn Defense.
A career supply officer, Sanchez went on from his Seventh Fleet job to work in Fleet Logistics Command units in Singapore and Yokosuka.
As of June 2011, Francis’ company had three regional contracts to provide services around Southeast and East Asia, the Pacific Isles and Australia.
Since the arrests began last month, the Navy has canceled nine Glenn Defense contracts worth $200 million and blocked future business.
Retired officers familiar with Navy operations in Asia say middle managers such as Misiewicz and Sanchez usually do the grunt work of ship scheduling. Officers above them would sign off without too much scrutiny.
However, given the political importance of some port calls, alarm bells may have gone off high up if certain locations became frequent stops without good reason.
“If all of a sudden everybody was going to one or two ports, red flags would start going off at the admiral level right and left,” the retired three-star said.
Former officers say it’s likely that the Fat Leonard scandal is now discussed almost daily at the highest levels of the Navy.
The current chief of naval operations, Adm. Jonathan Greenert, was commander of the Seventh Fleet from 2004 to 2006.
Greenert’s spokesman said on Monday that the admiral has met Francis, as he met many Navy supporters during his time in Asia.
“It was not uncommon for CNO to see Mr. Francis at official events in Southeast Asia or aboard USS Blue Ridge,” the Seventh Fleet command ship, Capt. Danny Hernandez said in an email.
But several people interviewed for this story don’t think that the bribery scenario — despite its lurid details about prostitutes being ordered for “wolf packs” of naval officers — will be as big a black eye as the Navy’s 1991 Tailhook debacle.
That scandal, when groups of drunken aviators groped women in a hotel corridor, went on to color the careers of hundreds of Navy fliers. Just admitting that you had attended the Tailhook convention was said to be problematic for advancement.
“It makes you feel bad that people in the Navy would do this kind of stuff for not a lot of money, really,” said retired Rear Adm. Terry McKnight, who commanded amphibious ships during his career. “It just makes it look bad on the service.”
But, he added, “Tailhook, there were (many) people at Tailhook. I think this is an isolated incident where a couple people went wrong. These admirals … I have no idea why they were brought down, but I think it’s just a few people.”
