Allegations that top officials gave classified information to a foreign defense contractor in exchange for prostitutes, cash, and other gifted kickbacks has ensnared the U.S. Navy in a new scandal. A third senior official, U.S. Navy Commander Jose Luiz Sanchez, 41, has now been arrested in Tampa, Florida and charged with accepting escorts, hotels, plane tickets, $100,000 in cash, and other payoffs from Leonard Francis, a Malaysian contractor known as “Fat Leonard” in military circles. Federal prosecutors are alleging that Leonard used luxury gifts to lure Sanchez and several other Navy officials into a scheme that overcharged the Pentagon by millions.
Glenn Defense Marine Asia (GDMA), Francis’ Singapore-based company, allegedly used the classified information to submit bogus invoices for millions of dollars. Two other senior Navy officials, Commander Michael Vannak Kem Misiewicz, 46, and Naval Criminal Investigative Service Supervisory Special Agent John Bertrand Beliveau II, 44, have all been charged in a massive fraud case that could expose national security concerns.
“According to the allegations in this case, a number of officials were willing to sacrifice their integrity and millions of taxpayer dollars for personal gratification,” U.S. Attorney Laura Duffy said.
In private communications revealed in court documents, Francis and Sanchez appear to banter and brag about various topics including prostitution services. Charging documents show one 2009 email exchange in which Sanchez and Francis, 49, talked over a trip Sanchez planned to take to Kuala Lumpur with his friends he nicknamed the “Wolf Pack”, presumably all Navy members. The two men discussed rooms and Sanchez allegedly asked for photos of the prostitutes.
“Fat Leonard” replied: “J, got it we will hook up after the FLAG dinner, will arrange a nest for you guys and some birds…” Birds are a reference to women. A few days later, Sanchez Facebook messaged Francis saying, “Yummy… daddy like.” Sanchez called Francis the “Lion King” and “Boss” in different exchanges while Francis referred to Sanchez allegedly as “Brudda”. Francis asked in one email exchange if Sanchez could help “swing” business in his direction regarding a U.S. Navy ship’s refueling needs in Thailand.
Court records allege that Sanchez regularly sent Francis confidential internal Navy discussion about GDMA, including legal opinions, and made recommendations on GDMA’s behalf about port visitations and Navy assignments. Misiewicz is accused of delivering sensitive Navy information to Francis. Francis in turn allegedly gave him gifts like five tickets to a Lady Gaga concern in Thailand in 2012 and tickets to “The Lion King” in Tokyo.
Francis wrote: “Don’t chicken out bro we need u with us on the front lines.”
Beliveau is charged with sending Francis investigative reports done by NCIS into possible fraud activities of GDMA. In return, Francis allegedly gave Beliveau lavish entertainment, prostitutes, and other rewards. Prosecutors charge GDMA overcharged the Navy millions of dollars for fuel, food and other services.
“He’s a larger-than-life figure,” said retired Rear Adm. Terry McKnight, who has no direct knowledge of the investigation said about Francis, “You talk to any captain on any ship that has sailed in the Pacific and they will know exactly who he is.”
Beliveau, Misiewicz, and Francis were all arrested in three separate states: Virginia, Colorado, and California respectively on the same day, September 16th. They have all pled not guilty. Authorities will seek extradition for Sanchez to California soon.
Acting Assistant Attorney General Raman said GDMA executives profited from trading “on the influence that they illegally bought. Day by day, this massive Navy fraud and bribery investigation continues to widen, and as the charges announced today show, we will follow the evidence wherever it takes us.”