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Another Navy officer arrested in widening bribery scandal

By Julie Watson

Associated Press

LAST UPDATED: 04:07 a.m. HST, Nov 07, 2013

SAN DIEGO >> The number of senior U.S. Navy officials accused of swapping secrets for bribes that included cash, prostitutes and high-end travel has grown to three.

Federal authorities on Wednesday arrested Cmdr. Jose Luis Sanchez in Tampa, Fla. and will seek to have him sent to San Diego to face allegations that he accepted $100,000 in cash, visits from prostitutes and other bribes from a Malaysian contractor.

Prosecutors allege that in exchange for the bribes, the 41-year-old Sanchez passed on classified U.S. Navy information to Leonard Glenn Francis, known in Navy circles as "Fat Leonard," the CEO of Singapore-based Glenn Defense Marine Asia Ltd., or GDMA.

Sanchez's attorney could not immediately be reached for comment.

Francis's company has serviced Navy ships in the Pacific for 25 years and is accused of overbilling the Pentagon by millions. His contracts have now been suspended.

The arrest marks the latest development in the case rocking the Navy. The accusations signal serious national security breaches and corruption and has set off high-level meetings at the Pentagon with the threat that more people, including those of higher ranks, could be swept up as the investigation continues. A hearing Nov. 8 could set a trial date.

"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," U.S. Attorney Laura Duffy said after Wednesday's arrest.

The two other senior officials arrested in recent weeks in the case are Navy Cmdr. Michael Vannak Khem Misiewicz -- who like Sanchez, is accused of giving Francis' company confidential information about Navy ship routes -- and a senior Navy investigator, John Beliveau II.

Prosecutors allege in a criminal complaint that Beliveau, 44, kept Francis abreast of the bribery probe and advised him on how to respond in exchange for such things as prostitution services.

GDMA overcharged the Navy millions of dollars for fuel, food and other services it provided, and invented tariffs by using phony port authorities, prosecutors say.

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, the criminal complaint alleges.

Francis, 49, was arrested in San Diego in September. A few weeks later, authorities arrested his company's general manager of global government contracts, Alex Wisidagama, 40.

Misiewicz, Beliveau, Francis and Wisidagama have pleaded not guilty. Their defense attorneys declined to comment.

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.

The conspiracy began in January 2009, when Sanchez was the deputy logistics officer for the commander of the Navy's 7th Fleet in Yokosuka, Japan, according to charging documents.

Francis hired prostitutes for Sanchez and friends on multiple occasions, according to the investigation.

In one 2009 email exchange, Sanchez and Francis discussed a trip Sanchez planned to take to Kuala Lumpur and Singapore with Navy friends he called his "Wolf Pack," according to the complaint. They discussed the number of rooms the "Wolf Pack" needed, and Sanchez asked Francis for pictures of prostitutes for "motivation." Francis replied that he would take care of it.

A few days later, Sanchez sent a Facebook message to Francis saying, "Yummy ... daddy like," according to charging documents.

Shortly after that, Francis sent an email asking Sanchez to help "swing" business his way regarding a U.S. Navy ship's need to refuel in Thailand.

As a result, the USS Mustin paid more than $1 million for fuel from GDMA at the Thai port -- more than twice what the fuel should have cost, prosecutors allege.

Acting Assistant Attorney General Raman said the GDMA executives "boasted" about their unlawful dealings, which could bring five years in prison if they're convicted of conspiracy to commit bribery.

"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," he said.

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allie wrote:
massive waste and fraud
on November 7,2013 | 05:11AM
serious wrote:
And, it's under who's watch???? Look at the number of scandals under Obama. Of course, he didn't know--he was out fundraising!!! If it were with Bush??????
on November 7,2013 | 05:36AM
eoe wrote:
Get real. The entire defense establishment is corrupt to the core and has been for 60 years.
on November 7,2013 | 05:40AM
Mythman wrote:
"Corrupt to the core for 60 years". Inouye corrupt to the core for 50 years. Any correlation. Rather, how could there not be any correlation.
on November 7,2013 | 07:02AM
HawaiiCheeseBall wrote:
You mean of course that Obama stopped the practice that has been going on for years and is now holding those responsible accountable right?
on November 7,2013 | 05:55AM
GorillaSmith wrote:
On what planet is that happening? The Dear Leader is too busy firing over 100 highly decorated commanders who disagree with his pearls of wisdom (e.g. the new rules of engagement forbid suppression fire in hostile landing situations.).
on November 7,2013 | 11:07AM
Slow wrote:
Didn't take long for a genius to figure out that this is Obama's fault. I blame him for the coquis on Hawaii, beach erosion on Maui and the roads on Oahu. He's so bad for the country and Hawaii especially. Why Rush L. just told me he hopes Obama fails. Now that is a patriot.
on November 7,2013 | 09:22AM
HD36 wrote:
How hard can it be to see if your being overcharged? If you see the fuel go up $5 a gallon, the port fee increases $500k, and now there are all kinds of port fees that didn't exist before. If I see my phone bill increase 1000%, I don't pay it and ask questions. Don't we have a government budget and auditiong department? Fat Leonard should have given 100k speaker fees to some key congressman first. He should have put their wives on the board of directors and given them 1 million or so. Then he could have added a cheap detergent and justified the fuel fees. Use olive oil and justify the food cost increase. Hire one more security gaurd and justify the extra port fees. They would have slipped a justification for higher fees and costs in the Affordable Care Act for him.
on November 7,2013 | 06:28AM
Mythman wrote:
Recommend this US Attorney (without involving the Honolulu US attorney) comb over Sen Inouye and Sen Inouye's staff's relationships involving the US Navy and contractors with a fine tooth comb: U.S. Attorney Laura Duffy
on November 7,2013 | 07:01AM
redneckMT wrote:
on November 7,2013 | 08:01AM
sailfish1 wrote:
The Navy higher ups knew about this stuff for many years now and didn't do anything about it. They need to court-martial all the admirals who allowed this to happen.
on November 7,2013 | 08:24AM
nodaddynotthebelt wrote:
Again, this while federal workers are required to take ethics classes while the commanders go about businesses as usual.
on November 7,2013 | 08:54AM
Anonymous wrote:
How long will it take for this problem to be swept under the rug ?? Too much higher-ups involved. I await for more news of who will be next on the chopping block. Agree on looking at all our past leaders' performances, but where to start ??????
on November 7,2013 | 09:30AM
cojef wrote:
Wine, women, and song, a combination for corrupting anyone, even the most highly disciplined. Everyone who played around knows that. The weakness of the flesh cannot be overcome by taking a cold shower. Wine defined by nightclubbing; women by prostitutes, song by Lady Gaga. Ha, ha, ha.
on November 7,2013 | 11:32AM
Nevadan wrote:
Send them to Gitmo
on November 7,2013 | 11:41AM
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