The U.S. Navy is being hit 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 (NCIS) 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 in San Diego 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.
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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.
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 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 as the destroyer made a port visit in Sihanoukville.
About the same time, Misiewicz was forging a close relationship with Glenn Defense Marine, court papers allege. Shortly after the Cambodia visit, the commander took an influential job as deputy operations manager for the Navy’s 7th Fleet, overseeing all naval activities in the western Pacific and Indian oceans.
In exchange for prostitutes, travel and other favors, federal authorities allege, Misiewicz provided Francis with classified information about ship movements and steered vessels to specific Asian ports.
Misiewicz was arrested Sept. 16 by Defense Criminal Investigative Service agents at the Colorado Springs, Colo., airport. The commander has been assigned to the U.S. Northern Command in Colorado since leaving 7th Fleet last year. He was released on $100,000 bond and confined to home detention pending trial. His attorney, Wendy Gerboth, of San Diego, did not return a phone call or email seeking comment.
Court papers make references to other, unnamed Navy officers who accepted favors from Francis, an indication that the investigation remains in its early stages.
Navy officials have identified Capt. Daniel Dusek, former commander of the USS Bonhomme Richard, as another target of the investigation. He has not been charged but the Navy relieved him of command Oct. 2, citing the investigation.
Dusek, who remains under suspension, declined to comment through a Navy spokesman.
Court documents allege that Francis was receiving regular tipoffs from inside the agency about the state of investigations. The information, prosecutors say, was being supplied by John Beliveau II, a onetime NCIS agent of the year, who was arrested at Joint Base Anacostia-Bolling in Southeast Washington, D.C., on the same day that Misiewicz was taken into custody.
Prosecutors have charged him with conspiracy to commit bribery, saying he fed Francis confidential information about pending criminal investigations into Glenn Defense Marine from March 2011 until shortly before both were arrested.
In return, according to charging documents, Francis supplied Beliveau with prostitutes and free travel, including a three-week trip to five Asian countries.
On Sept. 16, federal agents arrested Beliveau in Washington and Misiewicz in Colorado Springs.
Francis was arrested in San Diego along with Glenn Defense Marine’s general manager for global government contracts, Alex Wisidagama. He was charged with fraud and remains in federal custody.