Navy bribery probe involving cash, prostitutes "gathering momentum"

SAN DIEGO -- The Malaysian defense contractor who pleaded guilty in one of the Navy's worst bribery cases was a main point of contact for its ships at ports across Asia for more than two decades.

While the guilty plea by Leonard Glenn Francis in federal court Thursday - only hours after a second Navy commander also pleaded guilty on conspiracy charges - was hailed as a major victory in the case, federal prosecutors say they are not done in their investigation of the scheme that involved officials who were bought off with everything from cash, prostitutes and luxury travel to Cuban cigars, Kobe beef and Spanish suckling pigs.

The yearslong investigation that has spanned about a dozen countries is "continuing and is gathering momentum," U.S. Assistant Attorney Mark Pletcher said, adding that authorities have gathered "terabyte upon terabyte of electronic data."

In his plea agreement, Francis identified seven Navy officials who accepted bribes, including two unnamed individuals - a contract specialist and lieutenant commander who have not been charged. Francis, known as "Fat Leonard" in military circles, also acknowledged bribing officials with more than $500,000 in cash and a staggering amount of luxury goods worth millions. The goods included spa treatments, top-shelf alcohol, designer handbags, leather goods, designer furniture, watches, fountain pens, ornamental swords and handmade ship models, according to court documents.

The Navy has put more checks in place and says it is better scrutinizing its contracts. But questions remain as to how such a large-scale scheme that overbilled the Navy by as much as $20 million and involved officers who went as far as changing the routes of major military ships could happen.

"It is astounding that Leonard Francis was able to purchase the integrity of Navy officials by offering them meaningless material possessions and the satisfaction of selfish indulgences," U.S. Attorney Laura Duffy said.

Francis' Singapore-based company provided food, fuel and other supplies to Navy vessels for 25 years.

The 6-foot-3 Francis, who weighed 350 pounds, socialized with Navy brass. Emails obtained by investigators show he had a slew of prostitution services he could arrange to entice Navy officers to help his business.

So far, the charges have stemmed from illegal dealings between 2009 and 2013, and four Navy officers have been charged. Three have pleaded guilty to conspiracy charges.

"Leonard was an empire out there for so many years," said retired Rear Adm. Terry McKnight. "Everybody knows him. He's a good ole guy. He's the guy that can get everything done ... which sometimes starts the train down a bad track."

He added: "You really didn't have any choice, if you were going to any port in that part of Asia. He was the point of contact. He was the guy waiting on the pier."

Federal investigators are looking back as far as 2004, and there could be more arrests. Francis is the seventh defendant to plead guilty in the case. The 50-year-old businessman faces up to 25 years in prison and is scheduled to be sentenced in April. He and his firm also must forfeit $35 million, according to the plea agreement.

"Today Mr. Leonard Francis has taken accountability for his actions. He looks forward to a brighter future," his attorney, Ethan M. Posner, said after Thursday's hearing.

Prosecutors say Francis' Glenn Defense Marine Asia Ltd., or GDMA, asked captains to re-route ships to ports owned by Francis or to small ports where they could impose fake port fees on the Navy. Prosecutors also charged the firm with bribery and conspiracy charges.

The latest commander to be taken down came only hours before Francis stood in the same courthouse and admitted culpability.

Capt. Daniel Dusek on Thursday is the highest-ranking of five current or former Navy officials to plead guilty in the case so far, having served as the former deputy director of operations for the 7th Fleet and later commanding officer of the amphibious assault ships USS Essex and USS Bonhomme Richard.

After Dusek got a U.S. aircraft carrier re-routed to a Malaysian port owned by Francis in 2010, the defense contractor said in an email that the captain "is a golden asset to drive the big decks (aircraft carriers) into our fat revenue GDMA ports," according to the plea agreement.

Dusek faces up to five years in prison. An agent with the Naval Criminal Investigative Service, John Beliveau II, also pleaded guilty in the case, as have two GDMA managers.

U-T San Diego reports that Commander Michael Misiewicz was indicted last week by a San Diego federal grand jury on seven additional counts of bribery.

CBS News correspondent David Martin reported that Misiewicz, a former commander of the USS Mustin, eventually oversaw schedules and operations for much of the Pacific fleet.

According to court papers, Misiewicz disclosed sensitive information about Navy movements, and helped direct four ships -- the Abraham Lincoln, the George Washington, the John Stennis, and the Blue Ridge -- to Pacific ports serviced by Glenn Marine.

In exchange, Misiewicz allegedly received all-expense paid trips for himself and his family, tickets to "The Lion King" and a Lady Gaga concert, and access to prostitutes.