SAN DIEGO (AP) — A retired Navy admiral was among nine high-ranking military officers arrested Tuesday across the country in a burgeoning bribery scandal involving a Malaysian defense contractor nicknamed "Fat Leonard."
The indictment unsealed in federal court in San Diego alleged that retired Adm. Bruce Loveless and the other officers accepted the services of prostitutes, lavish meals and fancy trips from Leonard Francis in exchange for classified information that helped his company, Glenn Defense Marine Asia.
It was the latest indictment in the three-year-old case that has charged more than 20 former or current Navy officials so far and marks one of the Navy's worst corruption scandals in history. Loveless is the second admiral charged in the case. It is extremely rare for an admiral to face criminal proceedings.
Prosecutors say Francis, whose nickname comes from his wide girth, bilked the Navy out of nearly $35 million — largely by overcharging for his company's services supplying Navy ships in the Pacific with food, water, fuel and other necessities.
Navy officers provided classified information to Francis that helped him beat out the competition and in some instances commanders steered ships to ports in the Pacific where his company could charge fake tariffs and fees, prosecutors said.
The new indictment also charged a former Marine colonel.
The defendants were arrested Tuesday in California, Texas, Pennsylvania, Florida, Colorado and Virginia. Loveless was arrested at his home in Coronado across the bay from San Diego. None of the defendants or their defense attorneys could be immediately reached for comment.
"This is a fleecing and betrayal of the United States Navy in epic proportions, and it was allegedly carried out by the Navy's highest-ranking officers," said Acting U.S. Attorney Alana W. Robinson.
She added that "the alleged conduct amounts to a staggering degree of corruption by the most prominent leaders of the Seventh Fleet — the largest fleet in the U.S. Navy — actively worked together as a team to trade secrets for sex, serving the interests of a greedy foreign defense contractor, and not those of their own country."
Francis has pleaded guilty to fraud and is awaiting sentencing.
Twenty of the defendants are current or former U.S. Navy officials and five are company executives of the Singapore-based company. To date, 13 have pleaded guilty, including another admiral who was sentenced in June and is believed to be the first active-duty Naval flag officer charged in federal court. Several other cases are pending.
The indictment unsealed Tuesday says the defendants worked in concert to recruit others. Prosecutors said they used fake names and foreign email service providers to cover their tracks.
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