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18-month sentence for ex-Navy commander in 'Fat Leonard' scandal

This July 4, 2001, file photo provided by the U.S. Department of Defense shows U.S. Navy Commander Dave Kapaun, right, with Republic of Singapore Navy Major Danny Tan, left, and Republic of Singapore Major H .C. Lim at a reception on board the U.S. Navy dock landing ship USS Rushmore during the seventh annual Cooperation Afloat Readiness and Training (CARAT) Exercise. Retired U.S. Navy Commander Kapaun,who pleaded guilty to lying about his relationship with a Malaysian defense contractor nicknamed "Fat Leonard" is facing sentencing.

KEVIN H. TIERNEY/U.S. DEPARTMENT OF DEFENSE VIA AP

By NELSON DARANCIANG | The Honolulu Star-Advertiser | Published: September 12, 2017

HONOLULU (Tribune News Service) — A retired Navy officer who later became a high-ranking civilian defense employee at Camp Smith told a federal judge Monday it was “hubris, selfishness and a sense of entitlement” that led him to take part in a massive Navy corruption scandal centered around Singaporean-based defense contractor Leonard Glenn “Fat Leonard” Francis.

David Kapaun apologized for his actions.

“I was put in a position of authority and trust. I failed my responsibility,” he said.

U.S. District Senior Judge Susan Oki Mollway sentenced Kapaun on Monday to 18 months in prison for lying on a security clearance application by failing to disclose his past association with Francis and the nature of that association. Mollway also fined Kapaun $25,000 and ordered him to pay $50,000 in restitution to the Navy and perform 200 hours of community service.

Kapaun, 58, pleaded guilty to the lying charge in June, in a deal with federal prosecutors in which he also agreed to the fine, restitution and community service.

He admitted to accepting bribes from Francis while he was a Navy officer in exchange for information that helped Francis win Navy defense contracts.

Despite that, Assistant U.S. Attorney Mark Pletcher told Mollway that of the 30 mostly former and active- duty Navy service members so far charged in the corruption scandal, Kapaun is one of two who was not charged with bribery. The other is a former Navy rear admiral who was on active duty when he pleaded guilty, was demoted to captain before being allowed to retire and was then sentenced to 18 months in prison.

Defense lawyer Victor Bakke said that when Navy criminal investigators approached Kapaun, he immediately cooperated.

Kapaun has six weeks to turn himself in to begin serving his year-and-a-half federal prison term.

A $35 million scheme

Bakke told Mollway that Kapaun gave him a $50,000 check to pay off the restitution immediately but will be paying the fine in installments, after he completes his prison term.

Pletcher said Kapaun took bribes from and assisted Leonard in 2002-2004, when he worked for the Commander, Logistics Group, Western Pacific, in Singapore. He said Leonard credited Kapaun with being instrumental in the transformation of his company, Glenn Defense Marine Asia, from a small player to the dominant Navy defense contractor in the Pacific.

Mollway noted that Kapaun admitted to giving advice, drafting and editing contract proposals and correspondence for Francis. Pletcher said Kapaun’s assistance was invaluable: “He spoke Navy.”

Kapaun was a surface warfare officer when he retired from the Navy in 2008, after 25 years of service. He started working as a civilian employee at Camp Smith in 2009.

He was deputy chief of staff of the Special Operations Command Pacific, headquartered at Camp Smith, when he resigned in January.

Prosecutors say Francis and his company defrauded the U.S. government of more than $35 million from 2004 to 2013 by plying Navy officers with dinners, hotel stays, entertainment and prostitutes for information about American warship movements and logistics. He then had the officers direct the ships to ports his company controlled, sign off on inflated charges for supplies and port services, and protect his company from scrutiny.

Federal investigators in 2013 lured Francis to San Diego, where they arrested and charged him with conspiracy to commit bribery. Francis pleaded guilty in 2015 to bribery, conspiracy to commit bribery and conspiracy to defraud the U.S. on behalf of himself and his company. He also agreed to forfeit $35 million.

Francis has not been sentenced, and his plea agreement remains under seal because he is believed to be helping the government identify and prosecute other defendants.

One other defendant is retired Navy Rear Adm. Bruce Loveless, who is awaiting trial in San Diego on conspiracy, bribery and wire fraud charges. Loveless commanded the U.S. Pacific Command’s Joint Intelligence Operations Center at Pearl Harbor from 2009 to 2012.

The former rear admiral who was demoted to captain is Robert Gilbeau.

©2017 The Honolulu Star-Advertiser
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