Nine more Navy officers indicted in bribery scandal

SAN DIEGO — Nine more Navy officers, including an admiral who was head of intelligence operations before retiring in October, were indicted Tuesday on conspiracy, bribery, obstruction of justice and other charges in the ongoing “Fat Leonard” bribery scandal.

An indictment unsealed in federal court in San Diego accused the group of receiving a stream of gifts from Leonard Glenn Francis beginning in 2006. In return Francis, who owned the ship servicing company Glenn Defense Marine Asia and was known as “Fat Leonard” because of his size, got access to classified information such as ship schedules as well as the services of the officers who used their position to steer Navy business to his company.

Among the indicted is Adm. Bruce Loveless, who was the Navy’s director of intelligence operations. Loveless retired in October but had been under investigation for his role in the scandal for several years.

He was arrested Tuesday morning at his home in Coronado.

Also named in the indictment was Navy Capt. David Newland, former chief of staff to the commander of the Seventh Fleet, the service’s largest fleet and the center of the bribery scheme.

Others indicted from the Navy were Capt. Donald Hornbeck, Capt. James Dolan, Capt. David Lausman, Lt. Cmdr. Stephen Shedd, Cmdr. Mario Herrera and Chief Warrant Officer Robert Gorsuch. Also named in the indictment was Marine Col. Enrico Deguzman.

The indictment also names several other people with Navy ties who have been charged in related “Fat Leonard” cases. They are Edmond Aruffo, a former Navy officer who went to work for Francis and was a key liaison for him in recruiting people into the bribery ring; Cmdr. Jose Sanchez, who has pleaded guilty to his role and is awaiting sentencing; Capt. Daniel Dusek, who pleaded guilty and was sentenced last year to four years in prison; and retired Capt. Michael Brooks, who pleaded guilty and is awaiting sentencing.

The indictment also references a member of the Royal Australian Navy identified only as “AG” as a member of the conspiracy.

Francis has pleaded guilty to orchestrating the scheme that overbilled the Navy by at least $20 million. For more than a decade, the Singapore-based contractor bribed Navy officials in the giant Seventh Fleet to use their influence to steer ships to ports that his company controlled. Once they were there, he systematically overbilled the service for fuel, water, transport and many other services.

The indictment unsealed Tuesday contains what is now a familiar litany of misdeeds — lavish meals, the services of prostitutes and gifts all paid for by Francis. One meal in February 2006 that Francis paid for in Hong Kong cost $20,435.

Another incident a year later involved Francis paying for a stay — and prostitutes — at the MacArthur Suite of the Manila Hotel in the Philippines. “During the party, historical memorabilia related to General Douglas MacArthur were used by the participants in sexual acts,” the indictment said.

The defendants also referred to themselves as “the Cool Kids,” “the Band of Brothers,” “the Brotherhood” and “The Lion King’s Harem,” the indictment said. Francis, who was well known for his girth and outsized personality, was called “the Lion Man” by Sanchez and others.

The indictment said that some of the defendants lied about their relationship with Francis, deleted email accounts that carried incriminating messages about the bribery scheme, and destroyed a hard drive from the George Washington aircraft carrier in an effort to impede the probe and cover up their actions.