Defense Contractor Gets 63 Months in Prison in Navy Bribery Scandal

The USS Mustin arrives in Singapore for a scheduled port visit.  The contractor admitted to $1.6 million in fraudulent charges for one of the destroyer's port visits. The USS Mustin arrives in Singapore for a scheduled port visit. The contractor admitted to $1.6 million in fraudulent charges for one of the destroyer's port visits. David Flewellyn / U.S. Navy

The Justice Department’s continuing prosecution of the Singapore-based defense contractors who defrauded the Navy hit a key player with a prison sentence of 63 months and a restitution payment of $34.8 million, the department announced on Friday.

Alex Wisidagama, 42, of Singapore, the former global manager for government contracts of Glenn Defense Marine Asia, had pleaded guilty in 2014 for his part in a fraud scheme that over-billed the U.S. Navy by more than $34 million for ship husbanding services, fuel and other goods.

The scandal embarrassed the Navy both for the fraud and for the company’s bribery of Navy officials with luxury goods and prostitutes in return for classified information on ship and submarine schedules.

Wisidagama admitted that he and his cousin, GDMA CEO Leonard Glenn Francis, 51, of Malaysia, and co-conspirators six years ago created false invoices purporting to show that GDMA paid more to purchase fuel from third-party vendors than they actually spent, which allowed the company to build in secret markups into the prices at which it supplied the Navy with fuel. The contractor also inflated the cost of port tariff expenses that it passed on to GDMA, even though such practices were prohibited under their contract.

In October 2011, the contractor charged the Navy $2,739,351.49 to service the USS Mustin during a port visit to Thailand; $1,593,766.75 of the charges were fraudulent, Wisidagama admitted.

The announcement came from Assistant Attorney General Leslie Caldwell of the Justice Department’s Criminal Division, U.S. Attorney Laura Duffy of the Southern District of California, Special Agent in Charge Chris Hendrickson of the Defense Criminal Investigative Service’s Western Field Office and Director Andrew Traver of the Naval Criminal Investigative Service.

In the broader prosecution of the case highly embarrassing to the Navy, 10 individuals have been charged in connection with the scheme; of those, nine have pleaded guilty, Justice reported. The top GDMA executive, “Fat Leonard” Francis, changed his plea from not guilty to guilty, and is cooperating with investigators.

NCIS, DCIS and the Defense Contract Audit Agency are continuing the investigation.  

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