October 21, 2013

Navy officers accused in bribery scandal

Millions were stolen in an overbilling scheme that included prostitutes, cash and more, investigators say.

By Craig Whitlock
The Washington Post

The U.S. Navy is being rocked by a bribery scandal that federal investigators say has reached high into the officer corps and exposed a massive overbilling scheme run by an Asian defense contractor in exchange for prostitutes and other kickbacks.

Among those arrested on corruption charges are a senior agent for the Naval Criminal Investigative Service and a Navy commander who escaped Cambodia’s “killing fields” as a child only to make a triumphant return to the country decades later as the skipper of a U.S. destroyer. The investigation has also ensnared a Navy captain who was relieved of his ship’s command this month in Japan.

The chief executive and another company official of the Singapore-based defense contractor, Glenn Defense Marine Asia, were arrested last month at a San Diego harborside hotel after federal investigators lured them to the United States by arranging a sham meeting with Navy officials, according to court records and people involved in the case.

The unfolding investigation is shaping up as the biggest fraud case in years for the Navy. Federal prosecutors allege that Glenn Defense Marine, which has serviced and supplied Navy ships and submarines at ports around the Pacific Ocean for a quarter century, routinely overbilled for everything from tugboats to fuel to sewage disposal.

Investigators are still assessing the scope of the alleged fraud, but federal court records filed in San Diego cite a handful of episodes that alone exceeded $10 million. Since 2011, Glenn Defense Marine has been awarded Navy contracts worth more than $200 million. The company also services ships from several navies in Asia.

The U.S. military has never been immune from contracting scandals, but it is extremely rare for senior uniformed commanders to face corruption charges.

According to court papers filed by federal prosecutors in San Diego, the chief executive of Glenn Defense Marine, Leonard Glenn Francis, and others in his company targeted Navy personnel serving in Asia and plied them with prostitutes, cash, luxury hotel rooms, plane tickets and, on one occasion last year, tickets to a Lady Gaga concert in Thailand.

In exchange, Francis sought inside information on ship deployments and pressed at least one high-ranking commander to steer aircraft carriers and other vessels to ports where his firm could easily overcharge the Navy for pierside services, the court documents allege.

In May 2010, according to court papers filed by federal investigators, Francis and an unnamed manager from his firm “began targeting” Cmdr. Michael Misiewicz, a graduate of the Naval Academy in Annapolis, Md., “as someone who might be susceptible to providing favor … in return for things of value.”

Misiewicz was born Vannak Khem in Cambodia, but he was adopted as a 6-year-old by a U.S. Embassy worker. He moved to Illinois in 1973, just before the country plunged into a bloody communist revolution.

In December 2010, as commander of the USS Mustin, Misiewicz returned to Cambodia for the first time in 37 years. About the same time, Misiewicz was forging a close relationship with Glenn Defense Marine, court papers allege.

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