A Malaysian businessman whose company has serviced U.S. warships for 25 years stands accused of buying military secrets by lining up prostitutes, Lady Gaga tickets and other bribes for a U.S. commander.
Prosecutors in a federal court case in San Diego say Leonard Francis, nicknamed "Fat Leonard," worked his extensive connections to obtain military secrets in a scandal that signals serious national-security breaches and corruption in the Navy.
The accusations unfolding amid an ongoing investigation have set off high-level meetings at the Pentagon with the threat that more people, including those of higher rank, could be implicated. A Nov. 8 hearing could set a trial date.
Navy Cmdr. Michael Vannak Khem Misiewicz passed confidential information on ship routes to Francis' Singapore-based company, Glenn Defense Marine Asia Ltd., or GDMA, according to court documents.
Misiewicz and Francis moved Navy vessels like chess pieces, diverting aircraft carriers, destroyers and other ships to Asian ports with lax oversight where Francis could inflate costs, according to the criminal complaint. The firm overcharged the Navy millions for fuel, food and other services it provided and invented tariffs by using phony port authorities, the prosecution alleges.
"It's pretty big when you have one person who can dictate where ships are going to go being influenced by a contractor," said retired Rear Adm. Terry McKnight, who has no direct knowledge of the investigation. "A lot of people are saying, 'How could this happen?'"
So far, authorities have arrested Misiewicz; Francis; his company's general manager of global government contracts, Alex Wisidagama;, and a senior Navy investigator, John Beliveau II. Beliveau is accused of keeping Francis abreast of the probe and advising him on how to respond in exchange for such things as luxury trips and prostitution services.
Attorneys for the accused, who have all pleaded not guilty, declined to comment. The defendants face up to five years in prison if convicted of conspiracy to commit bribery.
Senior Navy officials said they believed that more people would likely be implicated in the scheme but it was too early to tell how many or how high this would go in the ranks. Other unnamed Navy personnel are mentioned in court documents as getting gifts from Francis.
Francis is legendary in military circles in that part of the world, said McKnight. Known for his extravagance, the Malaysian businessman has a 70,000-foot bungalow in an upscale Singapore neighborhood that draws spectators to its lavish, outdoor Christmas decorations.
"He's a larger-than-life figure," McKnight said. "You talk to any captain on any ship that has sailed in the Pacific, and they will know exactly who he is."
Navy spokesman Rear Adm. John Kirby said Navy Criminal Investigative Service agents initiated their probe in 2010, but he declined to comment further, citing the ongoing investigation.
That year, Misiewicz caught the world's attention when he made an emotional return as a U.S. Navy commander to his native Cambodia, where he was 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.
Meanwhile, Francis was recruiting him for his scheme, according to court documents.
Misiewicz's family went to a "Lion King" production in Tokyo with a GDMA employee in December 2010, and Misiewicz was offered prostitution services. Within months, he was providing Francis with schedules for the USS George Washington carrier strike group and other ships, according to the criminal complaint.
Shortly after that, Wisidagama wrote to Francis, "We got him!!:)" according to court documents.
GDMA cheated the Navy out of $10 million in just one year in Thailand alone, U.S. Attorney Laura Duffy said.
In December 2011, the two exchanged emails about the schedule of the USS Blue Ridge, investigators say. According to court documents, Francis wrote Misiewicz, "Bro, Slide a Bali visit in after Jakarta, and Dili Timor after Bali."
The complaint alleges Misiewicz followed through on the demands. In October 2012, the USS George Washington was scheduled to visit Singapore and instead was redirected by the Navy to Port Klang, Malaysia, one of Francis' preferred ports, where his company submitted fake contractor bids.
After Francis offered Misiewicz five tickets to a Lady Gaga concert in Thailand in 2012, Francis wrote, "Don't chicken out bro we need u with us on the front lines," according to court documents.
The federal government has suspended its contracts with Francis.
The Associated Press