EX-NAVY OFFICERS REACH DEAL IN SCANDAL
Four convicted in Fat Leonard case will plead guilty to misdemeanors
Four former Navy officers who have been aggressively challenging their convictions in the notorious “Fat Leonard” Navy bribery case have reached a deal with prosecutors and are prepared to plead guilty to misdemeanors, marking yet another wild turn in the legal saga.
Rather than continue to argue motions that allege prosecutorial misconduct in the government’s handling of the case, a date has been set for Sept. 6 for the four defendants to completely resolve the case, according to a docket entry filed Friday in San Diego federal court.
The plea deals would put an end to the post-trial legal challenges that have embroiled the U.S. Attorney’s Office since the men were convicted by a jury last summer.
Former Capts. David Newland, James Dolan and David Lausman and former Cmdr. Mario Herrera have been fighting their convictions on multiple felony charges — conspiracy to commit bribery, receiving bribes, and conspiracy to commit honest services wire fraud — stemming from their involvement with military contractor Leonard Glenn Francis and his company, Glenn Defense Marine Asia, or GDMA. Lausman was also convicted of obstruction of justice for destroying a computer hard drive.
The U.S. Attorney’s Office is now expected to move to withdraw those convictions and file new misdemeanor charges.
Newland, Dolan and Herrera are prepared to plead guilty to a misdemeanor involving disclosure of information that came into their possession regarding Navy processes, according to Newland’s attorney, Joseph Mancano. In Newland’s case, the information disclosed was a biography of the person who would be replacing him as chief of staff to the commander of the Navy’s 7th Fleet — information that is not considered confidential, classified or secret, Mancano said.
Lausman has agreed to plead guilty to destruction of government property valued at less than $1,000, relating to the hard drive incident, Mancano added.
The plea deals jointly recommend no jail, no probation and no restitution for the defendants, Mancano said. Each would pay $100 fines. The plea deals must still be accepted by U.S. District Judge Janis Sammartino, as in any case.
“This disposes of any potential charges related in any way to GDMA and Leonard Francis,” Mancano told the Union-Tribune Friday.
Attorneys for the other three defendants either declined to comment or did not return messages Friday. The U.S. Attorney’s
Office declined to comment.
Of the 32 people who have been convicted or pleaded guilty in the bribery scandal — the Navy’s worst in modern history — these four defendants were the only ones to take their case to a jury, along with a fifth, retired Rear Adm. Bruce Loveless. The jury deadlocked on charges against him.
The trial depended heavily on emails, messages, receipts, records and cooperating witnesses to detail corruption allegations that by now have become familiar to those closely watching the long-running investigation. The officers are accused of accepting bribes — swanky hotel stays, fine dining and in some cases the services of prostitutes — from Francis.
Nicknamed “Fat Leonard” for his size, Francis was a larger-than-life presence in Southeast Asian ports. His contracting company serviced visiting Navy ships, providing everything from security to water to trash removal.
Francis relied on officers who were willing to slip him proprietary information — tips on ship schedules, operational needs and competitors — and often asked them to pull strings behind the scenes to give him an edge. Francis, in turn, dominated contracting in the region and overcharged the Navy by at least $35 million, according to his own plea agreement.
The four-month trial in downtown San Diego took an extraordinary turn when defense attorneys alleged prosecutorial misconduct, specifically accusing the government of knowingly withholding information about a prostitute that was favorable to the defense. For two days, prosecutors and investigators were asked to take the witness stand to explain their actions.
The judge ruled later that the lead prosecutor in the case had committed “flagrant misconduct” by holding back the information, but it was not enough to throw out the case.
Other misconduct allegations and legal challenges have bubbled up. Among them were contentions that the government failed to disclose that a lead case agent made inaccurate statements in a sworn arrest warrant affidavit in a similar case and questions over the chain of custody of hard drives belonging to Francis that were used by the prosecution as evidence.
The situation grew more complicated when, a little over two months after the verdict, Francis escaped from house arrest in San Diego. He was captured in Venezuela, where he remains.
In their many motions, defense attorneys have requested that the judge either grant a new trial or dismiss the case outright.
Prosecutors — a different team than those accused by defense lawyers of “cumulative error and misconduct” — have not filed their written responses to the defense motions, telling the judge the amount of information to review has been immense. The judge recently granted a filing extension of Sept. 1, once prosecutors asked for time “to address matters that would materially affect litigation of the motions.”
Guilty pleas would put an end to the legal wrangling in the case once and for all.
If the pleas go as scheduled, the case could be wrapping up as the office’s leadership changes hands. Confirmation of President Joe Biden’s U.S. attorney nominee, Tara McGrath, was hung up in the U.S. Senate before its August recess, though it’s expected her supporters will continue to work to move her through before the end of the year.
Randy Grossman, who has held the position for the past two and a half years, departed earlier this month, and an acting U.S. attorney has been named in the meantime.
A major component of the case remains unfinished: The U.S. is still trying to negotiate Francis’ return to San Diego, so he can finally be sentenced.