Nine arrested in Fat Leonard case include retired Admiral

Rear Admiral Bruce Loveless Rear Admiral Bruce Loveless

MARCH 14, 2017 — In the latest development in the so-called Fat Leonard Affair, retired U.S. Navy Rear Admiral Bruce Loveless and eight others have been charged in a federal indictment with accepting luxury travel, elaborate dinners and services of prostitutes from Leonard Glenn Francis, the former Chief Executive Officer (CEO) of Glenn Defense Marine Asia (GDMA), in exchange for classified and internal U.S. Navy information.

Today, Admiral Loveless was one of nine defendants arrested on various charges including bribery, conspiracy to commit bribery, honest services fraud, obstruction of justice and making false statements to federal investigators when confronted about their actions.

Back in November 2013, the Navy suspended Admiral Loveless's access to classified material. He was then the Navy's Director of Intelligence Operations. The decision to suspend his classified access was made based upon the nature of allegations made in connection with the NCIS investigation into GDMA, said a Navy statement at the time (see earlier story).

The defendants were arrested early this morning in California, Texas, Pennsylvania, Florida, Colorado and Virginia. The United States will seek to move all of these cases to federal court in San Diego, California.

Admiral Loveless was taken into custody at his home in Coronado and was expected to make his first appearance in federal court this afternoon.

Four of the defendants are retired Navy captains: David Newland, 60, of San Antonio, Texas, James Dolan, 58, of Gettysburg, Pennsylvania, David Lausman, 62, of The Villages, Florida, and Donald Hornbeck, 56, a resident of the United Kingdom.

The other defendants arrested today included Colonel Enrico Deguzman, 48, of Honolulu, Hawaii, (6) retired Chief Warrant Officer Robert Gorsuch, 48, of Virginia Beach, Virginia, (8) active duty Lieutenant Commander Stephen Shedd, 48, of Colorado Springs, Colorado and active duty Commander Mario Herrera, 48, of Helotes, Texas.

Including today's defendants, a total of 25 named individuals have been charged in connection with the corruption and fraud investigation into GDMA. Of those charged, 20 are current or former U.S. Navy officials and five are GDMA executives. To date, 13 have pleaded guilty while several other cases are pending.

According to the indictment, the Navy officers allegedly participated in a bribery scheme with Leonard Glenn Francis, in which the officers accepted travel and entertainment expenses, the services of prostitutes and lavish gifts in exchange for helping to steep lucrative contracts to Francis and GDMA and to sabotage competing defense contractors. The defendants allegedly violated many of their sworn official naval duties, including duties related to the handling of classified information and duties related to the identification and reporting of foreign intelligence threats. According to the indictment, the defendants allegedly worked in concert to recruit new members for the conspiracy, and to keep the conspiracy secret by using fake names and foreign email service providers. According to the indictment, the bribery scheme allegedly cost the Navy – and U.S. taxpayers – tens of millions of dollars.

Read the indictment HERE



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