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Feds say Navy officials ‘sold’ honor for meals, hotel rooms and sex

Prosecutors claim top Navy officials put in their orders for lavish dinners, top-tier champagne and foreign prostitutes with a defense contractor, who, in exchange, was given access to military secrets and ship schedules.

SAN DIEGO (CN) — Top officials with decision-making powers for the Navy’s largest fleet considered themselves to be part of a “brotherhood," according to prosecutors.

Only the “familia’s” loyalty wasn’t to the United States government — it was to a Singapore-based port services contractor who traded lavish dinners, expensive hotel rooms and foreign prostitutes in exchange for influence over ship husbandry contracts for the Navy’s Seventh Fleet, based in the Pacific.

It was a business transaction, Assistant U.S. Attorney Michelle Wasserman said during the government’s opening statements Wednesday in the months-long bribery trial involving five Navy officials ranging in rank from commander to rear admiral.

“The defendants in this case took care of Leonard Francis because he took care of them,” Wasserman told a panel of 12 jurors and six alternates.

“Although sworn to the Navy, the members of the conspiracy worked for Francis,” she added.

Leonard “Fat Leonard” Francis is the central figure of the case even though he’s not on trial.

Francis pleaded guilty in 2015 to bribery and fraud charges. He’ll be a star witness during what could be a four-month trial in U.S. District Judge Janis Sammartino’s courtroom.

On trial are U.S. Navy Rear Adm. Bruce Loveless, Capts. David Newland, James Dolan and David Lausman, and Cmdr. Mario Herrera. The men were charged — along with four others who’ve since pleaded guilty — in a 2017 indictment accusing them of trading military secrets, including classified Navy ship schedules, with Francis, the former president and CEO of Glenn Defense Marine Asia.

Trading Navy ship schedules put the Seventh Fleet’s 40,000 sailors and Marines at substantial risk, Wasserman said in court Wednesday.

“If foreign adversaries could get their hands on those schedules, they could plan attacks. The very safety and security of the Navy officers, Navy sailors and seamen rested in those schedules,” Wasserman said, adding, “Once they were passed to Leonard Francis, the U.S. lost control.”

She also said the defendants could have been blackmailed by the prostitutes hired by Francis.

Wasserman detailed each of the ex-Navy officials’ roles in the scheme, claiming they “adopted the Navy hierarchy” in the way the scheme operated and recruited new members to ensure Francis could continue winning lucrative port contracts even as officials retired or moved up in the Navy.

The rewards for helping Francis win contracts?

“Luxury dinners, hotel rooms that cost $700 a night, prostitutes, sometimes flown in from other countries to meet the tastes and desires of the men in the conspiracy,” Wasserman said.

She added: “This is on a scale of luxury otherwise unavailable to government employees.”

Wasserman said photos of the lavish dinners would be shown during the trial, including a dinner held in 2006 featuring an ice sculpture of a bald eagle and $600 bottles of Cristal champagne.

Some of the dinners were attended by the defendants, Wasserman said, the day after a Navy Judge Advocate General Corps lawyer emailed them reminding them of rules not to accept gifts from defense contractors.

In 2007, Wasserman said, Newland was Chief of Staff working under the admiral on the USS Blue Ridge when, two days after receiving a warning email from the JAG, he personally selected the menu for a lavish dinner held by Francis in Hong Kong.

Newland also requested a champagne tasting, Wasserman said.

Members of the conspiracy referred to themselves as “wolf pack,” “the familia,” and “the Lion King’s harem,” while Francis was called “admiral,” “emperor,” “Lion King,” and “boss,” Wasserman said.

In May 2008, the sex parties ramped up with Francis footing thousands of dollars in hotel bills, dinners and the services of prostitutes.

On the back of a receipt for an $11,000 dinner in Singapore paid for by Francis was a handwritten note including Dolan and Loveless’ names and hotel room numbers. Next to Dolan the words “black sweater” were scrawled. Next to Loveless’ name it said “Amanda.”

“Receipts, ladies and gentlemen, for dinner on the front, prostitutes on the back,” Wasserman told the jury.

Some of the bribes were communicated via email through the Navy officers’ subordinates, Wasserman said, including the hand selection of prostitutes flown in to entertain Dolan.

Once he saw the picture of the prostitute he wanted Francis to pay for, Dolan’s subordinate emailed Francis saying he was “ready to go,” Wasserman said.

Afterwards, Francis asked Dolan to help close an office in Hong Kong which kept data on ship husbanding costs and could have discovered the conspiracy.

Dolan sent an email to the admiral overseeing logistics for the entire fleet, suggesting the office was overstaffed and he might consider closing it, Wasserman said.

He then forwarded the email to Francis and wrote, “Who loves you brother?” according to the prosecutor.

“Leonard Francis didn’t hide who or what he was, yet the defendants still chose him, chose to take his dinners, his hotel rooms, his prostitutes, his bribes and in return chose to give him classified information,” Wasserman said.

The characterization was in stark contrast to the defense team’s take on the case.

When attorney Joseph Mancano gave his opening statement in his defense case of Newland, he acknowledged his client attended lavish dinners with Francis.

But Mancano disputed Newland did anything improper.

“The case against David Newland should have never been brought, he did not bribe anyone, he did not solicit bribes – in fact David Newland committed no crimes,” Mancano said.

He said Newland did not exchange classified information for bribes, and noted he was not charged with espionage. Newland paid for the dinners he attended, Mancano said.

“David Newland’s attendance at these dinners was encouraged and expected,” Mancano said, noting four-star admirals and chiefs of Navy operations had also been photographed at Francis’ events.

“Leonard Francis was the U.S. Navy’s guy,” Mancano said.

Only Leonard Francis would testify Newland was involved in an illegal agreement, Mancano said, claiming federal prosecutors “chose to believe Leonard Francis and his version of events and disregard conflicting information from witnesses and other sources favorable to David Newland.”

He said emails between Francis and Newland the prosecution would show during trial were “cherry picked” from the 1,000+ emails Newland sent and received every day.

Dealing with Francis was “a tenth of 1%” of the duties Newland managed, Mancano said, noting his client wasn’t involved in ship husbanding contracts.

Mancano also threw water on prosecutors’ claims Newland could somehow influence where ships went to port.

He said ship schedules for the Seventh Fleet “are the result of an extremely formal process” that starts in Washington D.C. before making its way through Pacific Command, to the Pacific Fleet, to the Seventh Fleet before running through the ship’s admiral.

“The government has a flawed theory – and it comes from Leonard Francis – that he is like a chess master sitting in front of a chess board, moving chess pieces that are United States Navy ships,” Mancano said.

Opening statements by the remaining defense attorneys will continue Thursday.

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Categories / Criminal, Government, National, Trials

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