1st of 9 defendants sentenced in massive Navy bribery case

AP News
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Posted: Jan 21, 2016 6:57 PM

SAN DIEGO (AP) — The first of nine defendants in a massive U.S. Navy bribery case was sentenced to 27 months in prison Thursday for providing classified military information to a Malaysian defense contractor in exchange for an iPad, hotel stays, monthly cash payments and other gifts.

Petty Officer 1st Class Daniel Layug told the court that he made a mistake and let his ego and greed lead him to betray his country.

"It's very shameful what I did," Layug said.

U.S. District Court Judge Janis Sammartino in San Diego agreed.

"You put the Navy at risk. You put your colleagues at risk. And you put our country at risk," she said in handing down the sentence.

Layug faced up to five years behind bars. Prosecutors asked for the 27-month term, saying Layug was the least culpable in the investigation centered on Leonard Glenn Francis, president of Singapore-based Glenn Defense Marine Asia Ltd., or GDMA.

Nicknamed "Fat Leonard" for his girth, Francis has admitted to bribing numerous Navy officials with lavish gifts, including prostitutes, luxury hotels stays, and Cuban cigars. He used the bribes to obtain information that helped him beat out the competition and get Navy captains to steer ships to Pacific ports where he overcharged the Navy, prosecutors said.

Prosecutors say Francis asked captains to re-route ships to ports he owned or to small ports where they could impose fake port fees on the Navy.

Court records show Francis used the contacts to bilk the Navy out of some $20 million.

In his plea deal, Layug admitted to accepting a digital camera, iPad 3, and paid for hotel rooms in several Asian countries along with $1,000 in monthly payments from GDMA in exchange for providing the company classified ship schedules and prices from competitors.

Layug had a "bucket list" of items he requested from GDMA ranging from a blackberry to a Wii gaming unit, prosecutors said. In an email on March 9, 2012, Layug asked GDMA's vice president of global operations: "What are the chances of getting the new iPad 3? Please let me know."

"Layug essentially sold his honor for an iPad 3, and in doing so he put the U.S. Navy at risk of embarrassment, exploitation, attack or worse," U.S. Attorney Laura Duffy said in a statement after the hearing.

Seven of the defendants, including Layug, have pleaded guilty. Two have pleaded not guilty.

Prosecutor Mark Pletcher indicated Thursday more arrests could still come.

"This sets the bar as to where this case is going," he told the judge, adding that in coming weeks that current commanders and retired Navy officials who are more high profile, educated and experienced than Layug are scheduled to be sentenced.

Pletcher said that while Layug has expressed remorse for his actions, the court should not overlook the fact that the 27-year-old logistics specialist while stationed in Japan used his personal email address and was on the payroll for GDMA as part of the scheme.

"These things all show his prolonged and dedicated commitment to making this conspiracy work," he said.

Three admirals have been censured but never charged.

Rear Adm. Jonathan A. Yuen, chief of Naval Supply Corps, said the breach of trust by Layug and the other defendants tarnished the Navy's image and led to a worldwide overhaul of its husbandry contract procedures to ensure greater oversight.

"I do not have the words to express the depth of the betrayal such an exchange represents in contrast to the service and sacrifice that supply officers and sailors around the world perform every day," Yuen told the court.

Once released from federal prison, Layug could face being court martialed if the Navy decides to pursue its own case.