`Fat Leonard` pleads guilty in US Navy bribery scandal

 A Malaysian contractor at the centre of a corruption scandal rocking the US Navy pleaded guilty to fraud charges on Thursday, admitting to bribing officials with cash, prostitutes, Cuban cigars and Kobe beef.

AFP| Last Updated: Jan 16, 2015, 10:05 AM IST

Washington: A Malaysian contractor at the centre of a corruption scandal rocking the US Navy pleaded guilty to fraud charges on Thursday, admitting to bribing officials with cash, prostitutes, Cuban cigars and Kobe beef.

Known as "Fat Leonard" by the American sailors who dealt with him, 50-year-old Leonard Francis of Glenn Defense Marine Asia (GDMA) entered a guilty plea in a federal court in San Diego, confirming he presided over a decade-long scheme involving tens of millions of dollars in bribes, prosecutors said.

In addition, his ship supply company, GDMA, pleaded guilty to bribery charges and US Navy Captain Daniel Dusek pleaded guilty to conspiracy to commit bribery, the hightest-ranking officer so far to admit wrongdoing in the case. 

Four other current and former naval officers have been ensnared by the scandal.

Dusek, 47, admitted to using his position as a senior officer to ensure ships stopped at ports where Francis`s company operated, and on one occasion arranged for an aircraft carrier strike group to stop at Port Klang, Malaysia, a terminal owned by Francis, officials said.

The plea by "Fat Leonard," portrayed as the ringleader of the bribery scheme, could implicate more naval officers beyond those already named. 

"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," US Attorney Laura Duffy said in a statement. 

"In sacrificing their honor, these officers helped Francis defraud their country out of tens of millions of dollars. Now they will be held to account," she said.

Francis pleaded guilty to bribery, conspiracy to commit bribery and conspiracy to defraud the United States, authorities said.

He agreed to forfeit $35 million that he made in the scheme and to repay the navy whatever amount the court decides.

As part of his guilty plea, Francis admitted he bilked the US military out of tens of millions of dollars by routinely overbilling for fuel, tugboat services and sewage disposal.

Francis`s firm gave naval officers millions of dollars in gifts, including over $500,000 in cash, hundreds of thousands of dollars in prostitution services, travel expenses, luxury hotel stays and spa treatments, lavish meals, including Kobe beef, Spanish suckling pigs, "top-shelf" alcohol, Cuban cigars, designer handbags, watches, fountain pens, designer furniture, electronics, ornamental swords and handmade ship models, authorities said. 

In return, naval officers gave Francis classified and confidential information, including ship schedules. And Francis secured preferential treatment for his firm in the contracting process. 

Sentencing hearings for Francis and the naval officer, Dusek, are scheduled for April 3.