Fat Leonard: Australian Navy Officer revealed as suspect in massive US Navy bribery and fraud conspiracy


Updated

May 03, 2018 11:54:29

Even for January — often the coldest month in Hong Kong — the air that Tuesday night time was notably cool.

Key factors:

  • Ex-Australian Navy officer Alex Gillett alleged to have leaked secrets and techniques for lavish meals, lodge stays, prostitute providers
  • Multi-million greenback fraud orchestrated by ‘Fat Leonard’ Francis
  • Francis’s firm had business preparations with Australian Defence
  • US investigators travelled to Australia in 2012 as a part of investigation

But contained in the personal Alsace Room at Hong Kong’s Restaurant Petrus, the environment was heat as a gaggle of naval officers savoured the best the upmarket restaurant needed to supply.

The decor — gilt-edged, chandeliered Louis XIV opulence — framed spectacular views of Victoria Harbour.

At the desk have been 4 captains of the US Navy, and two lieutenant commanders — one American, the opposite Australian.

For dinner, the lads had black truffle soup, lobster salad, caviar, pan-seared duck liver, sole and wagyu beef, adopted by baked Alaska. Wine was paired with every dish.

The invoice got here in at over $18,000. The tab was picked up by their host: a person referred to as Fat Leonard.

Nine years later, each visitor at that lavish dinner, except for the Australian, can be charged with accepting bribes from Fat Leonard.

Leonard — actual identify Leonard Francis — was a Singapore-based naval contractor, eager to courtroom favour with the sailors, since his firm, Glenn Defense Marine Asia (GDMA), offered tens of millions of dollars of providers to the US Navy’s ships annually.

In return for these favours, the US officers would leak him categorised info. Some even altered Navy fleet actions, so Francis’s firm can be in pole place for the US Navy’s enterprise.

Once in port, Francis’s firm gouged the US Navy to no less than the tune of $US35 million.

The Fat Leonard case concerned corruption at each stage of the contracting course of for the US Navy’s port visits in South-East Asia.

The breadth of the scandal has rocked the United States army institution.

More than 400 US Navy personnel, together with 60 admirals, have been investigated about their involvement in Francis’s community.

So far, 21 naval and marine officers, some as senior as rear admirals, have been charged with felony offences. Nine are serving jail phrases. Two-hundred have been referred to the Pentagon for attainable army fees. Eleven have been disciplined or face courts martial, together with six rear and vice admirals.

The Hong Kong dinner in January 2008 was simply one in every of many lots of of comparable meals, intercourse events and lavish shows of hospitality Fat Leonard shouted his community of leakers over a few years in what has develop into the most important US Navy fraud case in historical past.

The ABC has now recognized the primary recognized Australian suspect in this in depth corrupt enterprise: former Lieutenant Commander Alexander Gillett.

What Alex Gillett is alleged to have accomplished is contained in a US Department of Justice indictment.

The indictment units out the case towards 9 US officers, together with conduct attributed to an Australian conspirator referred to as ‘AG’.

The ABC has confirmed “AG” is Alex Gillett.

The ABC additionally confirmed the Australian Federal Police has been aiding the US investigation, interviewing each RAN officers and Australians related to Fat Leonard.

As a part of that investigation, US investigators have travelled to Australia and interviewed civilians, Australian Navy and US Navy personnel stationed right here.

Australian sailor stumbles into an American wolfpack

From late 2007 till early 2010, in response to the indictment, Alex Gillett was stationed on an important US Navy ship in the Asia-Pacific: USS Blue Ridge.

The Blue Ridge is the command headquarters for the United States’ seventh Fleet, which operates throughout the western Pacific and Indian Oceans.

The seventh Fleet covers an enormous portion of the world’s oceans. It is the most important ahead deployed fleet in the US Navy.

Mr Gillett was appointed the Australian Navy’s official liaison to the seventh Fleet.

When he boarded the Blue Ridge, he stepped into the highest tier of the US operation, dwelling alongside a few of the US Navy’s most senior officers, planning joint US/Australian operations.

When he boarded the Blue Ridge, Mr Gillett additionally walked straight right into a massive net of corruption. At the centre of that net was Leonard Francis.

Those in the online — different officers on the Blue Ridge — referred to as themselves names like ‘the familia’ and ‘the Wolfpack’. According to the indictment, inside two months of arriving, Alex Gillett was one of many pack.

ABC has confirmed that, except for Mr Gillett, one different former Australian officer is underneath investigation over his relationship with Francis.

ABC couldn’t attain him, however understands he has left the Navy.

The ADF declined to verify that the previous officer is beneath investigation — or whether or not he has but been interviewed by police.

Fat Leonard’s huge corruption community

Leonard Glenn Francis lived as much as his nickname — weighing in about 160 kilograms.

A Malaysian-born Singaporean, his GDMA ship husbanding firm operated throughout South-East Asia and was extraordinarily profitable.

GDMA billed the US Navy hundreds of thousands of dollars per yr. A single seven-day keep might internet GDMA $US2 million.


US seventh fleet Coverage Area

Leonard Francis’s GDMA managed ports all through the US seventh Fleet’s huge protection space

US seventh fleet Coverage Area

Leonard Francis’s GDMA managed ports all through the US seventh Fleet’s huge protection space

The firm additionally managed amenities at a lot of ports, together with Phuket and Laem Chabang in Thailand, together with Kota Kinabalu and Port Klang in Malaysia. When US ships berthed in these ports, GDMA obtained a charge for that too.

To make sure the US Navy selected GDMA to husband its fleet, and to make sure it selected GDMA ports to berth in, Leonard Francis bribed US naval personnel.

Emails filed in the US prosecutions present Francis paid bribes in money and variety.

He handled the officers to intercourse events with prostitutes at luxurious motels throughout Asia, top-shelf alcohol, gourmet meals and even purchasing journeys for the officers’ wives.

Washington Post reporter Craig Whitlock adopted the case intently from the beginning and led the US reporting on the scandal.

“Leonard Francis was literally almost every day trying to work out favours or gifts or bribes for US Navy officers — and some from Australia and other countries,” Whitlock stated.

“He would pay for US Navy officers typically to have these orgies in the fanciest lodges in some elements of South-East Asia.

“Sometimes they have been so dumb, they might e mail him or textual content him and say, ‘Thank you Leonard, that was a lot enjoyable’. They left this digital path admitting to what they did.”

In return, the officers despatched him categorized Navy ship schedules and, when Francis requested, even used their affect to make sure the vessels docked at ports the place GDMA managed the amenities.

Once in port, GDMA milked the Navy, overcharging, even faking invoices, for the job.

“Leonard Francis, this Malaysian citizen was, in essence, dictating the place the United State Navy [sent its] ships, simply to go well with him, so he might over-bill and gouge the US Navy,” Whitlock stated.

“That’s unimaginable that a overseas citizen would have that a lot affect over US naval operations in the Pacific.”

While Leonard Francis has since pleaded responsible and admitted defrauding the United States tens of tens of millions of dollars, it’s believed the size of his fraud is way larger. The bribes he gave to the naval officers are paltry in comparability.

It went on for years, probably many years, till 2013, when Francis was lured by US authorities to San Diego and arrested.

Since Francis’s arrest, there have been waves of indictments, every naming extra and extra US Navy officers, who allegedly took GDMA’s bribes and gave Francis the categorised info he needed, together with the indictment that units out the alleged conduct of Alex Gillett.

How an Australian received caught up in the conspiracy

The indictment first locations Mr Gillett with Francis and the co-conspirators at that Alsace Room banquet in late January 2008 in Hong Kong.

Among the seventh Fleet officers eating with Mr Gillett was the person who allegedly ushered him into Fat Leonard’s band of bribe-takers: Commander Stephen Shedd.

Commander Shedd had emailed Fat Leonard earlier that month about Mr Gillett, saying: “I want to bring AG into the loop if that is alright with you. He will be a good alternate for me, even if he is Australian.”

Commander Shedd was allegedly already on the take from Francis.

The indictment alleges Commander Shedd attended a grand dinner at Sydney’s Altitude Restaurant in June 2007, when the Blue Ridge was visiting.

The value — $11,898 — was paid for by Francis.

Six months later, Commander Shedd was suggesting to Francis that Mr Gillett step into his footwear. Francis agreed.

Mr Gillett joined 5 US officers for a four-day keep on the JW Marriott Hotel in Hong Kong. Francis picked up the tab of over $US600 per head an evening, together with the invoice for the lavish $18,000 Alsace room dinner.

Throughout 2008, based on the indictment, Mr Gillett turned deeply ingrained in the conspiracy.

The conspirators arrange secret e-mail accounts the Navy could not see. The indictment says that, “Having been recruited to the conspiracy by Commander Shedd, AG had initiated a cooldtoad.com account at Commander Shedd’s direction”.

Mr Gillett’s was dingo11@cooltoad.com.

In August and October, the indictment lists situations of Mr Gillett emailing Francis US Navy Ship schedules. It claims Commander Shedd urged Mr Gillett to accede to Francis’s calls for.

Commander Shedd emailed Francis: “I just spoke to [Gillett]. He’s on it.” Mr Gillett despatched Francis the schedule eight hours later.

Prostitutes, lodges and haute delicacies

The full extent of Mr Gillett’s alleged spoils is unclear.

Aside from the lavish meal and lodging in Hong Kong in January 2008, the indictment says there was every week on the Shangri-La in Kota Kinabalu, Malaysia, in May 2008.

Later, in November, Mr Gillett and three fellow seventh Fleet officers additionally allegedly spent 4 nights again on the Shangri-La in Kowloon, when, true to type, Francis’s largesse did not cease on the lodge foyer.

They, “dined at the Petrus Restaurant, and were entertained by prostitutes specifically flown in from Manila” the indictment claims.

Francis paid the $US55,000 invoice.

Gillett turns into corruption goal

Mr Gillett has not but confronted any authorized penalties for his alleged actions.

The ABC has been advised by a number of sources that he has been questioned by Australian Federal Police (AFP) officers. Soon after, he resigned from the Australian Defence Force (ADF) and has lately discovered work as a defence contractor in Canberra.

When approached by the ABC, Alex Gillett stated: “Given the matter is subject to an ongoing police investigation, it is inappropriate for me to discuss this matter with you.”

That investigation is being carried out completely behind closed doorways.

Five years since Francis’s arrest, greater than 4 years because the ABC established the AFP first carried out interviews to help the US investigation, and nicely over a yr since Australian authorities have been placed on discover that the US had proof it believed pointed to Mr Gillett’s involvement in the corruption scandal, these authorities are but to disclose whether or not the previous sailor can be charged or face attainable extradition to the United States.

The ADF advised ABC: “As this matter is the subject of an ongoing investigation by the Australian Federal Police (AFP), it is not appropriate to provide further comment on any individual’s alleged involvement in this investigation. Any further enquiries relating to the investigation are a matter for the AFP.”

The AFP informed ABC it was, “working in conjunction with the Australian Department of Defence (DoD) and the [United States US Defense Criminal Investigative Service] DCIS to investigate any Australian involvement in the alleged corruption”.

“As this matter is ongoing, it is not appropriate to provide further comment,” it added.

Many of these dealing with felony fees in the US have pleaded responsible, admitting the in depth proof towards them, together with e mail and telephone trails about cash and a number of different advantages they acquired from Francis, put their guilt past all affordable doubt.

So too has Francis, the person who corrupted so many senior army officers.

Singapore, the place Francis was based mostly, sees extra Australian ships move by means of it than some other navy’s, save for the United States.

The Australian Navy’s ship actions in the area have been clearly a wealthy vein of potential income to Francis.

It raises the query of whether or not Francis might have bribed Australian officers to disclose categorised Australian army info.

Australian authorities silent on legal investigations

To date, Australian authorities have been nearly mute on whether or not and how the Leonard Francis scandal has concerned Australian officers.

The US Navy has been investigating its personal, and most of the stories it has produced in the course of that investigation have been launched to the ABC.

They present the US army has despatched officers to Australia to research GDMA.

In April 2012, 18 months earlier than the story erupted into public consciousness with the arrest of Francis, a US NCIS Reporting Agent visited Fremantle in Western Australia.

Four US Navy ships had arrived in port for an eight-day keep. GDMA had the contract to service the ships.

A redacted 28-page investigation report reveals the NCIS agent was investigating, “Glenn Defense Marine Australia and any other potential fraud issues identified”.

The agent spoke to Australian and US Navy personnel and interviewed an area water removing sub-contractor, Muck Suckers.

The report concluded the go to, “was a success and at a reasonable cost: estimated at $US2.1 million”.

That similar month, prompted by the USS Blue Ridge go to to Sydney in Oct 2011, an NCIS Special Agent interviewed unidentified Blue Ridge officers concerning the ship’s servicing by GDMA and different corporations in Australia.

One officer claimed he’d recognized a $60,000 value overcharge by one other Australian firm, a competitor of GDMA.

The different expressed misgivings about GDMA’s Japan workplace, and stated he believed the Navy had been overcharged for safety throughout visits to Brisbane and Cairns.

The US Navy informed the ABC its investigation has turned up extra info figuring out Australian personnel, nevertheless it won’t make that materials public till US enforcement proceedings have run their course.

On present indications, these proceedings are a great distance from completion.

While Australian authorities have confirmed attainable corruption of Australian personnel by Francis is beneath investigation, they won’t say what or whom they’re investigating.

Long earlier than Mr Gillett allegedly turned concerned with Francis, the ABC has been advised probably corrupt hyperlinks existed between Francis and different Royal Australian Navy personnel courting again 1 / 4 of a century.

A lot of sources have informed the ABC Francis’s duchessing of Australian Defence personnel in Asia-Pacific dates again to the early 1990s.

One former Navy officer stated he noticed suspicious relationships between the aspiring tycoon and the Navy officers chargeable for acquiring provides their ships.

For occasion, Francis would meet choose Australian personnel as an Australian Navy ship docked in port and whisk them away in flash automobiles. Some have named particular provide officers.

Another Navy supply spoke about attending dinners with Francis and Francis’s father in Malaysia, saying Francis’s father provided unspecified “extras” to Australian naval officers on the finish of 1 such meal.

The ADF declined to answer the ABC’s questions on whether or not different present or former Royal Australian Navy personnel are beneath investigation, however informed the ABC:

“Defence’s commercial arrangements with Glenn Defense Marine (Asia) PTE LTD were the subject of a number of internal reviews conducted in October 2013 and during April 2017. These reviews did not identify any irregularities requiring further examination.”

Defence confirmed it utilised the providers of GDMA over eight years, from 2005 to 2013.

While some contracts apparently between GDMA and Defence seem on the federal government website AusTender, the division insists these providers have been “rendered through (a) third party,” and that, “Defence did not contract Glenn Defence Marine Asia directly”.

Francis’s firm additionally had an Australian offshoot — Glenn Defense Marine (Australia).

Five years in the past, across the time Francis was arrested, the AFP approached the corporate. The officers said they have been making inquiries on behalf of US authorities.

In the course of researching this story, the ABC additionally tried to contact different former Navy officers whose positions would have made them weak to approaches from Francis. Those officers declined to remark or reply.

While the AFP wouldn’t touch upon its investigation, the ABC understands not all the officers we recognized have been questioned by police.

Topics:

navy,

defence-forces,

defence-and-national-security,

corruption,

law-crime-and-justice,

fraud-and-corporate-crime,

bribery,

security-intelligence,

government-and-politics,

australia,

united-states,

singapore,

malaysia,

hong-kong,

philippines,

canberra-2600

First posted

May 03, 2018 05:13:06



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