Admiral, seven others charged with corruption in new 'Fat Leonard' indictment

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The Justice Department unsealed a fresh indictment Tuesday charging eight current and former Navy officials - including an admiral - with corruption and other crimes in the "Fat Leonard" bribery case, escalating an epic scandal that has dogged the Navy for the past four years.

Among those charged were Rear Adm. Bruce Loveless, a senior Navy intelligence officer based at the Pentagon, several Navy captains and a retired colonel from the Marine Corps. The charges cover a period of eight years, from 2006 through 2014.

The Navy personnel are accused of taking bribes in the form of lavish gifts, prostitutes and luxury hotel stays courtesy of Leonard Glenn Francis, a Singapore-based defense contractor who has already pleaded guilty to defrauding the Navy of tens of millions of dollars.

The indictment lists page after page of bribes allegedly consumed by the defendants — seven senior officers and one enlisted sailor — including $25,000 watches, $2,000 boxes of Cohiba cigars, $2,000 bottles of cognac and $600-per-night hotel rooms.

According to the charging documents, Francis also frequently sponsored wild sex parties for many officers on the USS Blue Ridge, the flagship of the Navy's 7th Fleet, and other warships.

During a port visit by the Blue Ridge to Manila in May 2008, for example, five of the Navy officers attended a "raging multi-day party, with a rotating carousel of prostitutes," at the Shangri-La Hotel, according to the indictment. The group allegedly drank the hotel's entire supply of Dom Perignon champagne and rang up expenses exceeding $50,000, which Francis covered in full.

On another port visit by the Blue Ridge to Manila in February 2007, Francis allegedly hosted another sex party for officers in the MacArthur Suite of the Manila hotel. During the party, "historical memorabilia related to General Douglas MacArthur were used by the participants in sexual acts," according to the indictment.

In exchange, according to federal prosecutors, the officials provided Francis with classified or inside information that enabled his firm, Glenn Marine Defense Asia, to gouge the Navy out of tens of millions of dollars.

In addition to Loveless, others charged in the indictment are three retired captains: David Lausman, Donald Hornbeck and David Newland; an active-duty captain, James Dolan; a retired Marine colonel, Enrico de Guzman; an active-duty commander, Stephen F. Shedd; and Robert Gorsuch, a retired chief warrant officer. None could immediately be reached for comment.

All were charged with offenses stemming from deployments to Asia while they were assigned to the 7th Fleet, based in Japan.

The indictment brings the total number of people charged with crimes in the Fat Leonard investigation to 27. Prosecutors say the case is still unfolding and that more than 200 people have come under scrutiny.


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