A team of Defense Department investigators and federal prosecutors conducted a sting operation six years ago to lure a corrupt military contractor from his home in Asia to San Diego, a successful maneuver that helped expose the largest bribery and corruption scandal in U.S. Navy history.
The investigation revealed an extensive criminal conspiracy orchestrated by Leonard Glenn Francis, a Singapore-based defense contractor who pleaded guilty to fraud and bribery charges and is now a potential witness in ongoing prosecutions.
The painstaking investigation was carried out by the Navy Bribery Scandal Team, including James McWhirter of the Defense Criminal Investigative Service, Assistant U.S. Attorney Mark Pletcher, and nearly 20 investigators, auditors and attorneys from DCIS, the Naval Criminal Investigative Service, the Defense Contract Audit Agency and the Department of Justice. Their work has yielded criminal charges against 40 individuals and resulted in more than 30 convictions so far.
“This wide-ranging investigation included more than 1,500 interviews, nearly 1,000 individuals investigated and dozens of federal and military criminal convictions,” said Glenn A. Fine, the DOD principal deputy inspector general. “It resulted in the U.S. Navy instituting changes to its contracting procedures and training on ethics and integrity.”
The probe revealed that Francis, nicknamed “Fat Leonard,” paid millions of dollars in bribes, including cash, travel expenses, luxury items, lavish dinners and prostitutes to many Naval officers in return for access to classified materials about Navy ship movements and insider contracting information. The evidence also showed that Francis exploited this intelligence by having his Navy co-conspirators redirect aircraft carriers to ports he controlled so it would be easier for him to charge the Navy for goods and services provided by his company.
Those caught in the ongoing probe include the first Navy admiral to be convicted of a felony; a former Navy commander based in Japan; and a former NCIS supervisory special agent who was taking bribes to help Francis evade scrutiny. Several senior Navy officers and high-ranking DOD civilians also have been convicted of corruption offenses, and others are awaiting trial or possible administrative sanctions by the Navy.
Dermot O’Reilly, the deputy DOD inspector general for investigations, said McWhirter was collecting information and piecing together evidence from the early stages of the investigation. “Jim was really the driving force throughout the case,” O’Reilly said.
Marisela Nash, a key team member who initially worked for NCIS and later for DCIS, said Pletcher has been the quarterback keeping the complicated investigation on track and overseeing the prosecutions.
“Mark has significant experience with multiagency investigations, international cases and complex investigations,” Nash said. “He provided momentum and indispensable legal advice. He understands the military and how to best work within that system.”
The probe began with allegations that Francis was overbilling the Navy for coordinating, scheduling and procuring items and services ships and submarines needed when they arrived at Asian ports. This included providing tugboats, security, food, water, fuel, trash removal and transportation for Navy personnel.
Similar fraud allegations had been made for many years against Francis and his company, Glenn Defense Marine Asia, but each previous inquiry had been closed with no substantiated finding of wrongdoing.
The Navy Bribery Scandal Team, however, thoroughly documented fraudulent activity in Thailand and then throughout Asia by reviewing records in every country where Francis did business with the Navy, uncovering evidence of a far-reaching corruption scheme.
A key part of the probe occurred when the team placed intentionally placed false information in NCIS files suggesting Francis was no longer under scrutiny, which was then forwarded to Francis by a corrupt NCIS agent. As part of the sting operation, Navy officials also dangled the possibility that Francis’ company could receive a massive contract extension worth millions of dollars, hoping this offer along with his belief that the investigation had ended would lure him to San Diego.
The plan worked to perfection, with Francis and one of his top managers arriving in California and quickly finding themselves under arrest. Simultaneously, hundreds of law enforcement agents executed search warrants, seized evidence and interviewed dozens of potential witnesses and targets in eight Asian countries and 12 U.S. states. Indictments, prosecutions and convictions followed, with several cases still pending.
In addition to identifying fraud and corruption, the case stopped a substantial leak of classified information that jeopardized Navy operations across the Pacific Ocean.
McWhirter said the investigation “started as a typical fraud case” and became “a lot bigger than ever expected.” Pletcher said “the team possessed sheer determination,” with the investigators and prosecutors “working hand in glove on every aspect of the case” and “following every lead.”
O’Reilly said the case involved “extraordinary law enforcement efforts, continues to have a lasting impact on the ethics and core values of the military, and helped safeguard national security and taxpayer funds.”