‘Fat Leonard’ will soon learn his fate. But will he pay for the Navy’s worst corruption scandal? – The Mercury News

The U.S. Navy’s “Fat Leonard” bribery scandal cost taxpayers tens of millions of dollars, resulted in the investigation of hundreds of Navy personnel for potential corruption, led to nearly three dozen criminal convictions and, according to prosecutors, “engulfed a generation of U.S. Navy command staff.”

On Tuesday, the swaggering con man at the center of the Hollywood-esque scandal and largest corruption scheme in the Navy’s history will finally be held accountable. More than 11 years after his arrest, Leonard Glenn Francis, the Malaysian contractor known as “Fat Leonard” because of the massive girth he carried on his 6-foot-4-inch frame, will finally be sentenced in a San Diego courtroom.

Over the past decade, Francis has admitted that he conspired to shower Navy officers with bribes and bilk at least $35 million from the federal government. He turned prolific government witness, became the subject of an international manhunt after absconding from house arrest and was returned from Venezuela in a high-profile prisoner swap.

Prosecutors are prepared to argue to a judge that Francis’ total prison sentence should be just shy of 12 years, meaning he could spend roughly 6½ more years behind bars when taking into account credit for time he has already spent in custody. The decision is ultimately up to U.S. District Judge Janis Sammartino, who has presided over the case since the start.

Some close to the saga feel Francis is on the verge of pulling off one final grift.

“It’s appalling,” Todd Burns, the defense attorney for a Navy captain charged in a related case, said of the government’s recommendation, which he views as too light. “It confirms that if you tell prosecutors what they want to hear, even if it’s not true and you subsequently jump bond, the government can’t help but reward you, often lavishly.”

No matter how many more years Francis is ordered to spend in prison, Tuesday’s sentencing will not mark the final chapter of the Navy corruption case it once appeared it would. Too many questions remain: Will there be any additional fallout from the prosecutorial misconduct that emerged during the case’s lone trial and already resulted in one dismissed case and eight convictions reduced from felonies to misdemeanors? Will anyone besides Francis be held accountable for the mistakes in supervision that allowed him to cut off his GPS ankle monitor and flee the country? 

And most glaringly, will Francis ever pay the remaining $50 million he’s expected to owe the government in forfeiture and restitution?

Where’s the money?

For many years — at least as far back as 2004, but likely longer — Francis provided bribes of lavish dinners, high-end hotel rooms, top-shelf liquor, prostitutes and cash to Navy officers, who in turn steered ships to the southeast Asian ports that he controlled. Francis then charged the Navy heavily inflated prices for services such as security, tugboats, food, water replenishment and trash removal provided by his company, Glenn Defense Marine Asia.

Using his bribes both to influence which ports Navy ships would visit and to boost his company’s credibility with the U.S. government, Francis overbilled the Navy by at least $35 million. A prosecutor told a federal judge in a related case in Hawaii that Francis “serially defrauded the United States of upwards of $50 million.”

When Francis pleaded guilty in 2015, he promised to forfeit $35 million. He also agreed to pay restitution “in the full amount of the (Navy’s) losses,” which at the time he and prosecutors agreed was $20 million or more.

In sentencing documents filed last month, prosecutors recommended Francis pay $20 million in restitution, which would likely be on top of the $35 million forfeiture he already owed.

Francis forfeited $5 million in April 2015, according to sentencing documents filed last month by his attorney. But he has paid nothing since, and it’s now an open question whether he can or will pay much more. Upon his release from prison, he’ll be deported, making it hard to collect.

The U.S. Attorney’s Office in San Diego did not respond to questions for this story, nor did Francis’ attorney.

Though the Department of Justice has certain tools it can use to collect money and assets owed by defendants both in the U.S. and abroad, Francis has bragged about moving his assets during the roughly one year that passed between his arrest and the time he signed his guilty plea.

“I had every opportunity to do everything for one year,” Francis told journalist Tom Wright in a 2021 interview that defense attorneys played at the trial of five naval officers in 2022. “So whatever you did under that one year until you put your signature to a plea agreement, they couldn’t touch you.”

Wright asked Francis if that meant he’d moved his assets somewhere safe. Said Francis: “Whether it’s safe or not safe, once it’s moved, you don’t move it again, because then they’ll get it.” Later he told Wright: “I just can’t dispose of stuff, because then I’ll be in trouble … There’s still more restitution at the end.”

At the time of the interview, Francis had been granted medical parole to treat a cancer diagnosis and other health issues and was paying $7,000 a month in rent as part of a 30-month lease to live in a multimillion-dollar mansion in San Diego’s Torrey Highlands neighborhood, according to a lawsuit alleging unpaid rent related to his escape. Francis was also paying for his own 24-hour security meant to prevent him from fleeing.

John Beliveau Jr., a former supervisory agent for the Naval Criminal Investigative Service who leaked information to Francis in exchange for bribes, has been keenly interested in Francis’ money for years. Beliveau, the first of any defendant to plead guilty, was ordered to pay $20 million in restitution, an amount to be shared with Francis and several GDMA employees charged in the same case.

But Beliveau, who received about $30,000 worth of bribes, fears that prosecutors did not freeze Francis’ assets or otherwise do enough to ensure he couldn’t move or hide his wealth. In a March 2019 letter provided by Beliveau, his former attorney told Beliveau that she’d recently spoken to a prosecutor about restitution issues.

The attorney wrote that the prosecutor “does not believe that Francis will be able to come close to satisfying the entire amount at sentencing.”

Beliveau pointed out that after Francis’ arrest in 2013, prosecutors claimed he had “tens of millions of dollars” in the bank. Months after his 2015 guilty plea, prosecutors said Francis still had not turned over a full accounting of his assets as required by his plea deal. Prosecutors also said at the time they didn’t know what happened to $85 million stemming from the sale of a cruise terminal Francis had owned. Francis’ own attorneys, who were arguing for his release on bond, proposed living and monitoring arrangements that would have cost Francis $45,000 per month.

“Any statement made by the (Department of Justice) or Fat Leonard himself that he does not have the money to pay the full restitution amount … would simply be unbelievable,” Beliveau told the Union-Tribune. “There was and is enough information to trace his money … Any claim by Francis of being insolvent or an inability to pay the ($35) million should not be tolerated by the judge.”

More reduced charges?

Just two weeks after his September 2013 arrest in a luxury hotel suite overlooking San Diego Bay, Francis sat down with prosecutors to discuss his corruption of the Navy. Over the next eight years, according to defense sentencing documents, Francis met with prosecutors 64 more times to detail the massive bribery scheme.

Prosecutors described his level of cooperation as “unprecedented” and “unparalleled,” saying he provided detailed information about hundreds of individuals, from petty officers to admirals, backed up by financial records, photographs, receipts and other documentation.

“The substantial assistance provided by Francis cannot be ignored, and the degree and significance of his cooperation cannot be overstated regardless of what one thinks of the individual or his underlying criminal conduct,” prosecutors wrote.

Federal authorities investigated roughly 1,000 individuals and referred more than 600 to a Navy body convened to determine which of its personnel should face administrative or disciplinary action. Including GDMA, prosecutors filed criminal charges against three dozen defendants. Thirty-five either pleaded guilty to or were convicted of felonies.

But cracks in the case started to show during the lone trial in 2022. Defense attorneys accused Assistant U.S. Attorney Mark Pletcher, the lead prosecutor, of withholding evidence. Pletcher had to take the stand and answer questions about his actions during a three-day hearing outside the presence of the jury. Later, Sammartino found Pletcher committed “flagrant misconduct.”

The jury convicted four naval officers but deadlocked and reached no verdict on charges against retired Rear Adm. Bruce Loveless. Prosecutors ultimately dropped the charges against Loveless, and the judge later vacated the felony convictions of the four convicted officers and allowed them to each plead guilty to a single misdemeanor. At that hearing, government attorneys admitted to “serious issues” involving prosecutorial misconduct.

Earlier this year, the U.S. Attorney’s Office filed a brief outlining those issues and arguing that four other defendants who had pleaded guilty to felonies should also have their charges reduced to misdemeanors. The judge followed the recommendation, allowing the three Navy officers and a Marine colonel to plead to lesser charges. She also dismissed all charges against former Navy Cmdr. Stephen Shedd, who had previously pleaded guilty and testified at the trial.

In the same document outlining the issues with the prosecution, the government said it was “committed to ensuring all the defendants receive any redress that is owed them for the (prosecution) issues.” Prosecutors said they were reviewing other cases “to determine if other defendants were affected by the issues above and merit relief.”

So far it’s unclear if any other defendants have sought relief, though people close to the case believe at least one defendant has done so. Attorneys for that defendant did not respond Friday to a request for comment.

As for Pletcher, he was removed from the Navy corruption case after the trial but has remained with the U.S. Attorney’s Office.

Accountability for escape?

Once the 2022 trial ended and Francis’ cooperation was no longer necessary, prosecutors finally scheduled his long-postponed sentencing for September 2022. But the Sunday before Labor Day, Francis cut off his GPS ankle monitor and took an Uber to the border. He flew from Mexico to Cuba to Venezuela with a plan to make it to Russia, but Interpol agents captured him in the Venezuelan capital.

Francis’ attorney argued in sentencing documents that Francis “panicked” because he feared that Pletcher, who would be best positioned to describe the extent and value of the help Francis provided, would be removed from the case. He also feared he would never see his ailing mother if he was sent to prison.

“Leonard understands that this decision was inexcusable and wrong,” his attorney wrote of his escape, adding that Francis’ mother died in May.

Francis spent about 14 months in Venezuelan custody until last December, when he and 35 other prisoners were traded to the U.S. in exchange for an ally of President Nicolás Maduro who was facing money-laundering charges in Miami.

As of now, Francis is the only person who’s been publicly held accountable for absconding. He’s set to plead guilty Tuesday to a minor charge related to his escape.

It appears that neither his security guard, who was supposed to prevent his escape, nor his handlers from U.S. Pretrial Services have faced public discipline or consequences.