Another guilty plea in Navy bribery case

Written by Nick Blenkey
Court imposed fines

In the latest development in the so-called “Fat Leonard” case, U.S. Navy Commander Stephen Shedd pleaded guilty in federal court Wednesday to bribery charges.

In his plea agreement, Shedd admitted that he and eight other indicted leaders of the U.S. Navy’s Seventh Fleet received more than $250,000 in meals, entertainment, travel and hotel expenses, gifts, cash and the services of prostitutes from foreign defense contractor Leonard Glenn Francis.

Shedd is one of nine members of the Seventh Fleet indicted by a federal grand jury in March 2017 for conspiring with and receiving bribes from Francis, the owner and CEO of Singapore-based Glenn Defense Marine Asia (GDMA), which provided services for U.S. Navy ships in port, including tugboats; fenders; security; food; fuel; water; trash and waste removal; and transportation.

Shedd is the third of the “Seventh Fleet Nine” to plead guilty, the first being retired Chief Warrant Officer (CWO) Robert Gorsuch and the second U.S. Marine Corps Colonel Enrico DeGuzman.

“LAVISH THINGS OF VALUE”

The trial of the remaining defendants is scheduled to begin on February 28, 2022. They are U.S. Navy Rear Adm. Bruce Loveless; Captains David Newland, James Dolan, David Lausman and Donald Hornbeck; and Commander Mario Herrera. They are accused of conspiring to trade military secrets and substantial influence for what the U.S. Attorney’s Office for the Southern District of California describes as “sex parties with prostitutes and luxurious dinners and travel, among other lavish things of value.”

The overarching fraud and bribery investigation has resulted in federal criminal charges against 34 U.S. Navy officials, defense contractors and the GDMA corporation. So far, 28 of those have pleaded guilty, admitting collectively that they accepted millions of dollars in luxury travel and accommodations, meals, lavish gifts, or services of prostitutes, among other things of value, from Francis in exchange for helping GDMA win and maintain contracts and overbill the Navy by over $35 million.

PLEA AGREEMENT

According to Shedd’s admissions as set forth in his plea agreement, the defendants informed Francis of planned U.S. Navy ship movements by providing Francis with classified U.S. Navy ship schedules and narrative summaries of those schedules. The defendants provided Francis with internal, proprietary U.S. Navy information.

The defendants took official acts and exerted pressure on, advocated before, and provided advice to other U.S. Navy officials, knowing and intending that such advocacy and advice would form the basis for such other officials’ decisions to pay GDMA’s claims, overlook inflated invoices, quash bid protests filed by GDMA’s competitors, suppress competition in contract awards, and resolve in GDMA’s favor other questions, matters, and controversies regarding GDMA’s husbanding business.

From November 2006 to October 2008, Shedd served as the Seventh Fleet’s South Asia Policy and Planning Officer, where he was, in part, responsible for identifying ports that U.S. Navy ships would visit. From November 2008 to May 2010, Shedd served as a Personnel Distribution Officer stationed in Millington, Tennessee, and thereafter, upon being promoted to Commander, from March 2011 until May 2014, Shedd served as the executive officer and later the commandingofficer of the USS Milius.

“The defendant has admitted he was one of the many whose allegiance was switched from the Navy to Leonard Francis,” said U.S. Attorney Randy Grossman. “This abdication of the defendant’s duties to the Navy and the United States comes with heavy consequences.”

Shedd is scheduled to be sentenced on July 21, 2022, before U.S. District Judge Janis Sammartino.

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