Two Former Executives of Foreign Defense Contractor Charged in Expanding Fraud and Corruption Probe
Assistant U.S. Attorneys Mark W. Pletcher (619) 546-9714 and Patrick Hovakimian (619) 546-9718
NEWS RELEASE SUMMARY – September 15, 2016
SAN DIEGO, CA – Two former executives of foreign defense contractor Glenn Defense Marine Asia have been charged with participating in a conspiracy to submit fraudulent information, price quotes, claims and invoices to the U.S. Navy in an effort to steal millions of dollars as part of a years-long corruption and fraud scheme.
Neil Peterson, 38, and Linda Raja, 43, both of Singapore, worked as chief deputies for foreign defense contractor Leonard Glenn Francis to fill the coffers of their company, Glenn Defense Marine Asia (GDMA), at the expense of the U.S. Navy. Peterson served as the Vice President for Global Operations for GDMA and Raja served as GDMA’s General Manager for Singapore, Australia, and the Pacific Isles. Both defendants have been arrested and are currently being held in custody in Singapore, awaiting extradition to the United States to answer charges relating to their participation in the massive scheme to defraud the U.S Navy.
The indictment, unsealed yesterday by order of U.S. District Judge Janis L. Sammartino in the Southern District of California, alleges that Peterson and Raja submitted false claims of well over $5 million to the U.S. Navy. According to the indictment, in addition to the submission of fraudulent claims and invoices, Peterson and Raja worked to perpetuate and cover up their fraud by consistently misrepresenting to the U.S. Navy the cost of providing services to its ships in Asia, even going so far as to submit false price quotes from non-existent companies, on letterhead created from graphics cut and pasted from the Internet.
Peterson and Raja are each charged with one count of conspiracy to defraud the United States with respect to claims; one count of conspiracy to commit wire fraud; and multiple counts of making false claims.
Including Peterson and Raja, a total of 16 named individual defendants have been charged in connection with the GDMA corruption and fraud investigation. Of those, 11 are current or former U.S. Navy officials, including Admiral Robert Gilbeau, believed to be the first active-duty U.S. Navy flag officer charged in a federal criminal case; Captain (ret.) Michael Brooks; Commander Bobby Pitts; Lt. Commander Gentry Debord; Captain Daniel Dusek; Commander Michael Misiewicz; Lt. Commander Todd Malaki; Commander Jose Luis Sanchez; Petty Officer First Class Daniel Layug; Naval Criminal Investigative Service Supervisory Special Agent John Beliveau; and Paul Simpkins, a former DoD civilian employee, who oversaw contracting in Singapore.
Gilbeau, Dusek, Misiewicz, Malaki, Beliveau, Sanchez, Layug, and Simpkins have pleaded guilty. On Jan. 21, 2016, Layug was sentenced to 27 months in prison and a $15,000 fine; on Jan. 29, 2016, Malaki was sentenced to 40 months in prison and ordered to pay $15,000 in restitution to the Navy and a $15,000 fine. On March 25, 2016, Dusek was sentenced to 46 months in prison and ordered to pay $30,000 in restitution to the Navy and a $70,000 fine; and on April 29, 2016, Misiewicz was sentenced to 78 months in prison and ordered to pay a fine of $100,000 and to pay $95,000 in restitution to the Navy. Gilbeau, Beliveau, Sanchez, and Simpkins await sentencing.
Brooks, Pitts and Debord were charged in May 2016 and their cases are pending.
Also charged are three additional GDMA executives – Francis, Alex Wisidagama and Ed Aruffo. All three have pleaded guilty; Wisidagama was sentenced on March 18, 2016 to 63 months and $34.8 million in restitution to the Navy. Francis and Aruffo await sentencing.
The Defense Criminal Investigative Service, Naval Criminal Investigative Service, and the Defense Contract Audit Agency are investigating. Assistant U.S. Attorneys Mark W. Pletcher and Patrick Hovakimian of the Southern District of California and Assistant Chief Brian R. Young of the Criminal Division’s Fraud Section are prosecuting the case. The Justice Department’s Office of International Affairs provided substantial assistance in this matter.
Anyone with information relating to fraud or corruption should contact the NCIS anonymous tip line at www.ncis.navy.mil or the DOD Hotline at www.dodig.mil/hotline, or call (800) 424-9098.
DEFENDANTS Case Number: 14-CR-3703-JLS
Neil Peterson 38 Singapore
Linda Raja 43 Singapore
SUMMARY OF CHARGES
Conspiracy to Defraud the United States with Respect to Claims, in violation of 18 U.S.C. § 286
Maximum Penalty: 10 years in prison, a $250,000 fine.
Conspiracy to Commit Wire Fraud, in violation of 18 U.S.C. § 1349
Maximum Penalty: 20 years in prison, a $250,000 fine.
False Claims, in violation of 18 U.S.C. § 287
Maximum Penalty: 5 years in prison, a $250,000 fine.
Defense Criminal Investigative Service
Naval Criminal Investigative Service
Defense Contract Audit Agency