The Navy Cuts Ties With Contractor Accused of Trading Prostitutes for Secrets

The fall of "Fat Leonard" continues.

The U.S. Navy has killed three contracts worth about $200 million with Glenn Defense Marine Asia, the company accused of furnishing prostitutes, cash and other perks to active-duty officers in exchange for military information that was either sensitive or classified. The acknowledgement, first reported by USA Today, marks the latest woes for Glenn Defense and its CEO "Fat Leonard" Glenn Francis, a Singapore-based defense contractor implicated in a globe-spanning scandal that has threatened the career of several top officers.

A Navy official said Thursday that the service terminated three contracts worth about $196 million with Glenn Defense. In addition, another $7.5 million in contracts with the contractor will not be renewed. The official spoke on condition of anonymity, given the sensitivity of the case and investigation.

Francis was among the first charged in the case. Five men now face charges, including Cmdrs. Michael Vannak Khem Nisiewicz and Jose Luis Sanchez and John Bertrand Beliveau, a supervisory agent with the Naval Criminal Investigative Service. Another Glenn Defense official — Alex Wisidagama, of Singapore — also have been charged in connection with the scheme, in which Francis’s company used information leaked by Navy officials to defraud the U.S. of millions of dollars, according to U.S. prosecutors.

Other Navy officials face scrutiny in the case. Among them are two senior officers whose access to classified information was suspended Nov. 8. Vice Adm. Ted Branch, pictured above, and Rear Adm. Bruce Loveless — the service’s director of naval intelligence and director of intelligence operations, respectively — have not been charged with any crimes, but the suspension "was deemed prudent given the sensitive nature [of] their current duties and to protect and support the integrity of the investigative process," Rear Adm. John Kirby, the Navy’s top spokesman, said in a statement at the time.

The Navy also relieved of command Capt. Daniel Dusek, the captain of the amphibious assault ship Bonhomme Richard, in connection with the investigation. He has not been charged with any crimes, but officials said that commanders lost confidence in him.

An examination of more than 100 pages in criminal complaints filed by U.S. authorities in the cases outlines a conspiracy in which Francis used bribery as a matter of course to get ahead in the business world. The colorful character has a number of nicknames, according to court documents, including "Fat Leonard," "the Godfather" and "Lion King." He allegedly arranged for prostitutes to meet with Navy officials in several cities across the Pacific. In exchange, they provided information that Glenn Defense used to its advantage while "husbanding" ships, providing food, water, waste removal, and other tasks, prosecutors say.

The officers implicated in the scandal nearly all share a common thread: service on the Blue Ridge, the command ship for the Navy’s 7th Fleet, or service at Fleet Logistics Center Yokosuka in Japan. The facility provides repairs and maintenance to a variety of U.S. and allied ships and equipment.

Sanchez, accused of accepting prostitutes and at least $100,000 in bribes, served as the executive officer for the Navy’s Fleet Logistics Center in Yokosuka from May 2012 until April 2013, according to court papers. Previously, he was the director of operations for the Navy’s logistics center in Singapore from July 2010 to May 2012. From April 2008 to April 2010, he was the deputy logistics officer for the 7th Fleet, working primarily from Yokosuka.

Misiewicz, accused of accepting prostitutes, cash, concert tickets and other perks, was the commanding officer of the destroyer Mustin, home-ported in Yokosuka, from about June 2010 to January 2011, prosecutors say. From January 2011 to April 2012, he was the deputy operations officer aboard the Blue Ridge.

Dusek, the relieved commander of the Bonhomme Richard, served as the 7th Fleet deputy operations officer aboard the Blue Ridge from January 2009 through February 2011, according to his official biography. The Navy says that in that role, he was responsible for all aspect of fleet operations for 7th Fleet.

Branch, the three-star admiral, did not serve full-time at Yokosuka in any capacity, but was previously the executive assistant to the commander of U.S. Pacific Fleet, according to his official biography.  He would have traveled the region extensively in that position.

Loveless, the other flag officer implicated, also was aboard the Blue Ridge while serving as the assistant chief of staff for intelligence for 7th Fleet, according to his official biography.

As an NCIS agent, Beliveau did not serve on the Blue Ridge. But court documents say he served as an agent assigned to the 7th Fleet in Yokosuka from 2005 through 2008. From 2008 to April 2012, he was stationed in Singapore for NCIS, working with Navy officials and local authorities to safeguard security for ships. It is in this context that Beliveau had regular contact with Francis and other Glenn Defense officials, authorities allege.

The Navy began investigating the case in 2010 after discovering irregularities in Glenn Defense’s business practices, officials say. That is one year after Glenn Defense allegedly arrange for prostitutes to meet with Sanchez and other Navy officers, court documents say.

It isn’t clear how many more officers could be charged, but an unidentified U.S. citizen and former Navy officer is accused of working on Glenn Defense’s behalf to recruit some of the officers currently charged in the case. The unnamed recruiter is identified as "EA" in court documents, and purportedly left the service in 2007.

The criminal complaint for Misiewicz includes an alleged exchange in which the commander forwards sensitive information about ship schedules to Glenn Defense. "EA" then allegedly wrote "him!! :)", using an emoticon in the process. Francis’s alleged response appears cocky.

"You bet the Godfather," he wrote, according to court documents.

EA’s response: "All hail!!!"