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Navy Commander Arrested For Trading Secrets For Bribes, Prostitutes

ATLANTIC OCEAN - MAY 13:  In this handout released by the U.S. Navy, Northrop Grumman personnel conduct pre-operational tests on an X-47B Unmanned Combat Air System (UCAS) demonstrator on the flight deck of the aircraft carrier USS George H.W. Bush (CVN 77) May 13, 2013 in the Atlantic Ocean. George H.W. Bush is scheduled to be the first aircraft carrier to catapult-launch an unmanned aircraft from its flight deck. The Navy plans to have unmanned aircraft on each of its carriers to be used for surveillance and be armed and used in combat roles.  (Photo by Mass Communication Specialist 3rd Class Kevin J. Steinberg//U.S. Navy via Getty Images)

ATLANTIC OCEAN - MAY 13: In this handout released by the U.S. Navy, Northrop Grumman personnel conduct pre-operational tests on an X-47B Unmanned Combat Air System (UCAS) demonstrator on the flight deck of the aircraft carrier USS George H.W. Bush (CVN 77) May 13, 2013 in the Atlantic Ocean. George H.W. Bush is scheduled to be the first aircraft carrier to catapult-launch an unmanned aircraft from its flight deck. The Navy plans to have unmanned aircraft on each of its carriers to be used for surveillance and be armed and used in combat roles. (Photo by Mass Communication Specialist 3rd Class Kevin J. Steinberg//U.S. Navy via Getty Images)  (2013 U.S. Navy)

U.S. Navy Commander Jose Luis Sanchez was arrested Wednesday in Tampa for allegedly trading confidential military information to a man known as "Fat Leonard," in exchange for bribes, prostitutes and high-end travel.

Sanchez is the third senior Navy official to be accused of swapping secrets for bribes in as many weeks. Federal authorities will seek to have Sanchez sent to San Diego to face allegations that he accepted $100,000 in cash, visits from prostitutes and other bribes from a Malaysian contractor.

Prosecutors allege that in exchange for the bribes, the 41-year-old Sanchez passed on classified information about the movement of ships to Leonard Glenn Francis, known in Navy circles as "Fat Leonard," the CEO of Singapore-based Glenn Defense Marine Asia (GDMA).

Sanchez's attorney could not immediately be reached for comment.

Francis' company has serviced Navy ships in the Pacific for 25 years and is accused of overbilling the Pentagon by millions. His contracts have been suspended.

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The arrest marks the latest development in a case that has rocked the Pentagon for the last couple of months. A hearing Nov. 8 could set a trial date for Sanchez.

"According to the allegations in this case, a number of officials were willing to sacrifice their integrity and millions of taxpayer dollars for personal gratification," U.S. Attorney Laura Duffy said after Wednesday's arrest.

The two other senior officials arrested in recent weeks in the case are Cmdr. Michael Vannak Khem Misiewicz – who is also accused of passing on information about ship routes – and a senior Naval Criminal Investigative Service investigator, John Beliveau II.

Prosecutors allege in a criminal complaint that Beliveau, 44, kept Francis abreast of the bribery probe and advised him on how to respond in exchange for such things as prostitution services.

GDMA overcharged the Navy millions of dollars for fuel, food and other services it provided, and invented tariffs by using phony port authorities, prosecutors say.

Misiewicz and Francis moved Navy vessels like chess pieces, diverting aircraft carriers, destroyers and other ships to Asian ports with lax oversight where Francis could inflate costs, the criminal complaint alleges.

Francis, 49, was arrested in San Diego in September. A few weeks later, authorities arrested his company's general manager of global government contracts, Alex Wisidagama, 40.

Misiewicz, Beliveau, Francis and Wisidagama have pleaded not guilty. Their defense attorneys declined to comment.

Court records allege that Sanchez regularly emailed Francis internal Navy discussions about GDMA, including legal opinions, and made recommendations in GDMA's favor about port visits and Navy personnel assignments.

The conspiracy began in January 2009, when Sanchez was the deputy logistics officer for the commander of the Navy's 7th Fleet in Yokosuka, Japan, according to charging documents.

Francis hired prostitutes for Sanchez and friends on multiple occasions, according to the investigation.

In one 2009 email exchange, Sanchez and Francis discussed a trip Sanchez planned to take to Kuala Lumpur and Singapore with Navy friends he called his "Wolf Pack," according to the complaint. They discussed the number of rooms the "Wolf Pack" needed, and Sanchez asked Francis for pictures of prostitutes for "motivation." Francis replied that he would take care of it.

A few days later, Sanchez sent a Facebook message to Francis saying, "Yummy ... daddy like," according to charging documents.

Shortly after that, Francis sent an email asking Sanchez to help "swing" business his way regarding a U.S. Navy ship's need to refuel in Thailand.

As a result, the USS Mustin paid more than $1 million for fuel from GDMA at the Thai port — more than twice what the fuel should have cost, prosecutors allege.

Acting Assistant Attorney General Raman said the GDMA executives "boasted" about their unlawful dealings, which could bring five years in prison if they're convicted of conspiracy to commit bribery.

"Day by day, this massive Navy fraud and bribery investigation continues to widen, and as the charges announced today show, we will follow the evidence wherever it takes us," he said.

Based on reporting by the Associated Press.

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