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Five years after arrest, Navy bribery mastermind Leonard Francis testifies at deposition

A gavel sits on display in a military courtroom Jan. 29, 2014, at Dover Air Force Base, Del. (Airman 1st Class William Johnson/U.S. Air Force)

Five years ago, investigators with the U.S. Navy knocked on the door of a San Diego hotel suite, waiting for the Malaysian businessman inside to answer — and in the process launch what has become the worst corruption scandal for the Navy in decades.

Since the arrest of businessman Leonard Glenn “Fat Leonard” Francis that day, federal prosecutors in San Diego have methodically filed charges or secured indictments against 32 defendants, including 27 Navy officials, for their roles accepting bribes from Francis, owner of the ship servicing firm Glenn Defense Marine Asia. Hundreds more Navy personnel who had interactions with Francis or his company have had their cases reviewed internally by the Navy, with several facing court martial.

And while the tally of the accused has continued to rise, nothing has been heard from Francis — until July, when he answered questions behind closed doors.

Francis, who pleaded guilty in January 2015 and agreed to cooperate with investigators, testified for the first time — in a deposition taken for a court martial case for Cmdr. David Morales, a fighter pilot charged with conspiracy and bribery.

Francis testified at length and in detail about his interactions with Morales, who fought the court martial charges filed against him. But the defense lawyer who questioned him asked for a mistrial at the court martial because he said Francis committed perjury.

The military judge hearing the case did not agree, but he acquitted Morales of the most serious charges against him, which relied in part on Francis’s version of events.

A lawyer defending a Navy officer now under indictment for accepting bribes from Francis, attended the court martial and said later that the deposition could put Francis’s credibility as a witness in play in future cases.

“It was clear to everyone in the courtroom the judge had serious questions about Leonard Francis’s credibility as a witness,” said Joseph Mancano, a lawyer representing retired Capt. David Newland, facing charges of conspiracy and bribery.

“I think the words the judge used were ‘possible embroidery’ of his testimony and how Leonard Francis had trouble answering questions directly.”

Francis also testified about his current status at the deposition. The 54-year-old Malaysian businessman is suffering from renal cancer, and for months has been under the care and treatment of physicians in San Diego, according to the transcript and court records in San Diego federal court.

He’s no longer in the custody of the U.S. Marshals, nor is he in a federal jail. He is on a medical furlough requested by attorneys and approved by the federal judge overseeing his case late last year.

Francis is living in a small apartment above a garage at the home of one of his physicians. He is under guard 24 hours a day by private security guards, which his family is paying for. They are allowed to visit him for up to three to four hours at a time, he said. He’s allowed to go to church once a week.

As part of a plea agreement Francis entered into in January 2015, he agreed to forfeit $35 million to the government — a measure of how much he profited from the bribery scheme.

Yet Francis has paid only $5 million of the amount, and did so — as the agreement required — in the first 90 days after he pleaded guilty. There’s no indication of when the rest will be paid.

That may not be unusual. For all his time in custody and the years since he pleaded guilty, Francis has yet to be sentenced for his crimes. Typically, cooperating witnesses like him in multiple-defendant cases are not sentenced until all the cases against other defendants are finished.

At that time, prosecutors can ask for a reduced sentence based on the cooperation of a witness. Francis is working for that.

The U.S. attorney’s office in San Diego, where the investigation is anchored, declined to comment for this story.

When the end comes in the scandal is an open question. Just last month, federal prosecutors indicted three more people. Nine defendants indicted in 2017 still have active cases that may go to trial. If any do, Francis is likely to testify.

So far the 21 people who have admitted guilt did so by plea bargains and without a trial.

The core of Francis’s decade-long bribery scheme was to bribe Navy personnel with sex, liquor, cash and gifts, and then have them use their influence to get ships to dock in ports his company controlled. Once there, he gouged the Navy for providing things like fuel, waste removal, fresh water, land transportation and security.


© 2018 The San Diego Union-Tribune

Distributed by Tribune Content Agency, LLC.