Jury convicts four former Navy officers in 'Fat Leonard' bribery trial
The San Diego Union-Tribune June 30, 2022
(Tribune News Service) — A federal jury in San Diego convicted four of five former U.S. naval officers of conspiracy, bribery and fraud on Wednesday, capping a four-month long trial and a decade-long investigation of the worst corruption scandal in the history of the Navy.
After deliberating over parts of three weeks, jurors convicted former Capts. David Newland, James Dolan and David Lausman and former Cmdr. Mario Herrera of conspiracy to commit bribery, receiving bribes, and conspiracy to commit honest services wire fraud due to their entanglements with Singapore-based military contractor Leonard Glenn Francis.
Lausman was also convicted of obstruction of justice for destroying a computer hard drive with documents and emails from his time as the commanding officer of the aircraft carrier George Washington.
The jury deadlocked and reached no verdict on charges against a fifth defendant, former Rear Adm. Bruce Loveless.
The verdict ended a lengthy trial — the only one in the sprawling prosecution — that began with opening statements on March 2. The evidence jurors were shown featured reams of documents including emails and invoices, testimony from federal agents, and testimony from other Navy officials caught in the scandal who had pleaded guilty and agreed to give evidence against others in exchange for a potentially lighter sentence.
Prosecutors laid out what is now, after nearly a decade of "Fat Leonard" indictments and more than two-dozen guilty pleas, a familiar litany: Francis — nicknamed for his girth — showered gifts of fancy meals, prostitutes, high-end hotel rooms and other perks on Navy officers from 2006 through 2014.
In return, they did his bidding, such as providing ship schedules for the Navy's Seventh Fleet and trying to steer Navy ships to ports around Southeast Asia that Francis and his company, Glenn Defense Marin Asia, controlled. Once there, he gouged the Navy on services, including fuel, supplies, sewage disposal, security, shore transportation and more.
Francis admitted to defrauding at least $35 million from the U.S. Navy.
The trial included an extraordinary, three-day-long hearing mid-trial to get to the bottom of allegations that federal prosecutors had illegally withheld information from defense lawyers. It was one of several motions that defense attorneys filed during the course of the trial contending prosecutors had committed misconduct and a mistrial should be declared.
But U.S. District Court Judge Janis Sammartino has not issued any formal rulings on the motions filed by lawyers — unusual in any trial but especially so in such a high-profile case. The most recent was filed even while the jury deliberated, arguing that the government had not disclosed that a key case agent had made inaccurate statements in a sworn arrest warrant affidavit in a strikingly similar case a year ago.
That motion and the others are still pending, frustrating defense lawyers. "Our view is this case should never have gone to the jury," Joseph Mancano, the lawyer for Newland, said during a hearing June 22 outside the presence of the jury. And he criticized how federal prosecutors have handled the case.
"The layers of prosecutorial misconduct in this case are mind-boggling," he told the judge.
But, in response, government lawyers said that nothing the defense raised in the motions were enough to halt the case. "None of the issues — individually or collectively — arise to 'flagrant misbehavior' or have caused 'substantial prejudice' to the defendants," prosecutors wrote.
The arguments over the withheld information was not the biggest surprise in the trial. In a stunning move, the scandal's namesake, Francis, who pleaded guilty in 2015 and met hundreds of times with agents and prosecutors as part of his cooperation agreement, was not called to testify.
The government gave no explanation, and indeed it did not have to. But there was plenty of speculation. Some centered on a multi-part podcast Francis recorded that was released before trial. In hours of recordings he bragged about his influence and reach. At one point — in an excerpt defense attorneys played several times for the jury — he appeared to throw a cloud over the pending case.
"I can't say my story," Francis told an interviewer in his deep baritone voice, "because if I tell you my story, if I tell them my story, then the government hasn't got a case against all those other guys."
Another reason: Years ago Francis testified in a deposition for a court-martial of a Navy fighter pilot charged with accepting bribes. While the judge in the case did not accept a defense lawyer's argument that Francis perjured himself under cross-examination, he acquitted the pilot of the most serious charges against him, which relied on Francis's testimony.
Also not called to testify was a second key player, former Cmdr. Jose Sanchez, who has also pleaded guilty and, like Francis, is awaiting sentencing after helping prosecutors.
That meant the case against the five men relied heavily on emails, phone and billing records, and other documentary evidence. Other corrupt officers who pleaded guilty, such as Edmund Aruffo and Stephen Shedd, were called to testify, but defense lawyers in closing arguments urged jurors to consider the sizable hole made by Francis' absence as a sign of the weakness in the government's case.
Defense lawyers put on only a handful of witnesses, attacking the government case via cross-examinations. In closing arguments that stretched over several days, they assailed the government's reliance on cooperating witnesses angling for shorter sentences. They said the emails presented by prosecutors were presented out of context and insinuated wrongdoing by simply connecting the former officers to Francis or his company.
The highly unusual mid-trial hearing centered on information about one prostitute. Right as the trial got under way, federal agents had conversations with the woman, named Ynah, who was allegedly paid by Francis to have sex with defendant Lausman.
But the woman denied to agents she had sex and said she slept on the couch in the hotel room of an officer. She also admitted she lied to Francis about having sex, so she could get paid. Ynah declined requests to come to San Diego from the Philippines to testify.
No information on this conversation was given to defense lawyers, which they said violated longstanding legal obligations of prosecutors to turn over information that could help show a defendant was not guilty. Sammartino, the judge, halted testimony in the trial for a hearing in which the chief prosecutor on the case, Assistant U.S. Attorney Mark Pletcher, had to take the extraordinary step of testifying on the stand to defend his actions.
In the end Sammartino didn't sanction prosecutors.
The convicted defendants and their lawyers declined to comment after the verdicts were read to a nearly packed courtroom, filled with family and friends of the defendants on one side and a legion of federal agents and prosecutors on the other.
Thomas O'Brien, the lawyer for Loveless, asked Sammartino to acquit his client after the jury was dismissed, arguing the government had "thrown everything it can" against Loveless and was unable to convince the jury.
Pletcher objected to that, and Sammartino declined to make an immediate ruling.
The U.S. Attorney's Office issued a brief news release about the verdict late Wednesday but did not comment on its significance or say whether Loveless would be retried.
Outside of court, O'Brien said the government should not seek to retry his client. "After four months of trial and several weeks of deliberations the jury failed to convict Admiral Loveless on any counts," he said. "This case should be dismissed."
Sentencing for the four men was set for Oct. 11, but a series of post-trial motions from defense lawyers are expected to be filed before then.
The trial could very well mark the end of the sweeping Fat Leonard investigation. Since the indictment in this case was handed down in March 2017, the investigation has slowed down markedly. Four people were indicted after this case but they each pleaded guilty before trial.
Francis is set to be sentenced on July 14. Since 2018 he had been living in a kind of house arrest at a secret residential location while receiving treatment and care for medical problems, including renal cancer.
©2022 The San Diego Union-Tribune.
Distributed by Tribune Content Agency, LLC.