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Press Release

U.S. Navy Admiral Plus Eight Officers Indicted as Part of Corrupt Team that Worked Together to Trade Navy Secrets for Sex Parties

For Immediate Release
U.S. Attorney's Office, Southern District of California

Assistant U.S. Attorneys Mark W. Pletcher (619) 546-9714 and Patrick Hovakimian (619) 546-9718




SAN DIEGO – Retired U.S. Navy Rear Admiral Bruce Loveless and David Newland, chief of staff to the Commander of the Navy’s Seventh Fleet, along with seven other high-ranking Navy officers are charged in a federal grand jury indictment with acting as a team of moles for a foreign defense contractor, trading military secrets and substantial influence for sex parties with prostitutes, extravagant dinners and luxury travel.


According to a federal grand jury indictment unsealed today, the Navy officers worked together to help Singapore-based defense contractor Leonard Glenn Francis and his company, Glenn Defense Marine Asia, pull off a colossal fraud that ultimately cost the Navy – and U.S. taxpayers – tens of millions of dollars.


Navy officers were arrested early this morning in California, Texas, Florida, Colorado and Virginia. The United States will seek their removal to face charges in San Diego. Admiral Loveless was taken into custody at his home in Coronado and was expected to make his first appearance in federal court in San Diego at 2 p.m. before U.S. Magistrate Judge Mitchell D. Dembin. The other defendants are Captains David Newland, James Dolan, Donald Hornbeck and David Lausman; Marine Corps Colonel Enrico DeGuzman; Commander Mario Herrera; Lt. Commander Stephen Shedd and Chief Warrant Officer Robert Gorsuch. DeGuzman is also scheduled to appear before Judge Dembin today at 2 p.m.


The defendants face various charges including bribery, conspiracy to commit bribery, honest services fraud and obstruction of justice and making false statements to federal investigators when confronted about their actions. Two defendants – Shedd and Herrera - are active duty; the others are recently retired.


The indictment is a veritable 78-page list of allegations in which Francis spent tens of thousands of dollars on bribing the defendants and the actions the officers took to reciprocate. Francis plied the officers with things like foie gras terrine, duck leg confit, ox-tail soup, $2,000 boxes of cigars and $2,000 bottles of rare cognac, plus wild sex parties in fancy hotels.


For their part, the defendants allegedly worked in concert to help Francis and GDMA win and keep defense contracts to provide port services to U.S. Navy ships; to redirect ships to ports controlled by Francis in Southeast Asia so he could overbill the Navy for supplies and services such as food, water, fuel, tugboats, and sewage removal; to sabotage competing defense contractors; to recruit new members for the conspiracy by spreading the “Glenn Gospel” to incoming Seventh Fleet leaders; and to keep the conspiracy secret by using fake names and foreign email service providers.


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


“This is a fleecing and betrayal of the United States Navy in epic proportions, and it was allegedly carried out by the Navy’s highest-ranking officers,” said Acting U.S. Attorney Alana W. Robinson. “The alleged conduct amounts to a staggering degree of corruption by the most prominent leaders of the Seventh Fleet – the largest fleet in the U.S. Navy - actively worked together as a team to trade secrets for sex, serving the interests of a greedy foreign defense contractor, and not those of their own country.”


“The defendants in this indictment were entrusted with the honor and responsibility of administering the operations of the U.S. Navy’s Seventh Fleet, which is tasked with protecting our nation by guarding an area of responsibility that spanned from Russia to Southeast Asia and the Indian Ocean,” said Acting Assistant Attorney General Kenneth A. Blanco. “With this honor and awesome responsibility came a duty to make decisions based on the best interests of the Navy and the 40,000 Sailors and Marines under their care who put their lives at risk every day to keep us secure and free. Unfortunately, however, these defendants are alleged to have sold their honor and responsibility in exchange for personal enrichment.”


“The allegations contained in today’s indictment expose flagrant corruption among several senior officers previously assigned to the U.S. Navy's Seventh Fleet. The charges and subsequent arrests are yet another deplorable example of those who place their own greed above their responsibility to serve this nation with honor‎,” said Dermot F. O'Reilly, Director, Defense Criminal Investigative Service.


“Naval Criminal Investigative Service, in concert with our partner agencies, remains resolved to follow the evidence wherever it leads, and to help hold accountable those who make personal gain a higher priority than professional responsibility,” Special Agent Andrew L. Traver, NCIS Director. “It's unconscionable that some individuals choose to enrich themselves at the expense of military security.”


Here’s a sampling of bribes alleged in the indictment:


-During the U.S.S. Blue Ridge’s port visit to Sydney Australia on June 17, 2007, Francis hosted and paid for a dinner event at the Altitude Restaurant within the Shangri-La Hotel. Some of the defendants dined on saute of scallops, foie gras, and beef loin for a cost of $11,898. During dinner, defendant Gorsuch handed Francis two floppy disks containing classified port visit information for many U.S. Navy ships, according to the indictment.


-In March 2007, Francis hosted and paid for a multi-course dinner for several of the defendants at the Oak Door in Tokyo, Japan. The menu included foie gras, Lobster Thermidor, Sendai Tenderloin, and for dessert, Liberte Sauvage, the winning cake of the 10th Coupe du Monde de la Patisserie 2007, followed by cognac and cigars. Each course was paired with fine champagne or wine. Attendees posed for photographs wearing custom-made GDMA neckties that Francis had given them as gifts.


-During one port visit in Singapore on March 9, 2006, Francis seduced the leaders of the Seventh Fleet with foie gras terrine, duck leg confit, ox-tail soup, roasted Chilean sea bass, paired with expensive wine and champagne, followed by digestifs and cigars. The extravagance included $600-a-bottle Hennessy Private Reserve, $2,000-a-bottle Paradis Extra and $2,000-a-box Cohiba Cigars.


According to the indictment, the group of officers referred to themselves using various terms, such as “the Cool Kids,” “the Band of Brothers,” “the Brotherhood,” “the Wolfpack,” “the familia,” and “the Lion King’s Harem.” The officers tried to conceal their corrupt relationships by using fictitious names to create email addresses using foreign-based email services.


This is the first time multiple officers are charged as working all together in a multi-layered conspiracy, pooling their individual and collective resources and influence on behalf of Francis.


In addition to performing various official acts in return for Francis’s booty, these officers are also accused of violating many of the sworn official duties required of them as Navy officers, including duties related to the handling of classified information and duties related to the identification and reporting of foreign intelligence threats.


The U.S. Navy’s Seventh Fleet represents a vital piece of the United States military’s projection of power as well as American foreign policy and national security. The largest numbered fleet in the U.S. Navy, the Seventh Fleet comprises 60-70 ships, 200-300 aircraft and approximately 40,000 Sailors and Marines. The Seventh Fleet is responsible for U.S. Navy ships and subordinate commands which operate in the Western Pacific Ocean throughout Southeast Asia, Pacific Islands, Australia, and Russia as well as the Indian Ocean territories, as well ships and personnel from other U.S. Navy Fleets that enter the Seventh Fleet’s area of responsibility. The U.S.S. Blue Ridge is the command-and-control ship of the Seventh Fleet and housed at-sea facilities for Seventh Fleet senior officials.


The Seventh Fleet’s motto: Ready Power for Peace.


In addition to the nine defendants charged today, the 11 Navy officials charged so far in the fraud and bribery investigation are: Admiral Robert Gilbeau; Captain Michael Brooks; Captain Daniel Dusek; Commander Jose Luis Sanchez; Commander Michael Misiewicz; Commander Bobby Pitts; Lt. Commander Gentry Debord; Lt. Commander Todd Malaki; 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, Brooks, Dusek, Misiewicz, Sanchez, Debord, Malaki, Layug, Beliveau, 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 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 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 to pay a fine of $100,000 and to pay $95,000 in restitution to the Navy. Beliveau was sentenced on October 14, 2016 to 12 years in prison and to pay $20 million in restitution; Simpkins was sentenced on December 2, 2016 to 72 months in prison; Gilbeau, Brooks, and Sanchez await sentencing. Pitts was charged in May 2016 and his case is pending.


Also charged are five GDMA executives – Francis, Alex Wisidagama, Edmund Aruffo, Neil Peterson and Linda Raja. Three have pleaded guilty; Wisidagama was sentenced on March 18, 2016 to 63 months in prison and $34.8 million in restitution to the U.S. Navy. Francis and Aruffo await sentencing. Peterson and Raja were extradited to the United States from Singapore in September 2016 and their cases remain pending.


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.


Anyone with information relating to fraud or corruption should contact the NCIS anonymous tip line at or the DOD Hotline at, or call (800) 424-9098.


DEFENDANTS                  Case Number: 17CR0623-JLS


Captain David Newland Age 60 San Antonio, Texas

Chief of Staff to the Commander of the Seventh Fleet


Colonel Enrico DeGuzman Age 58 Honolulu, Hawaii

Fleet Marine Office of the Seventh Fleet, responsible for coordinating the missions of the U.S. Marine Corps with the Seventh Fleet; and Assistant Chief of Staff of Operations for U.S. Marine Corps Forces, Pacific


Captain James Dolan Age 58 Gettysburg, Pennsylvania

Assistant Chief of Staff for Logistics for the Seventh Fleet, responsible for meeting the logistical needs of every ship within the Seventh Fleet’s area of responsibility


Captain Donald Hornbeck Age 56 United Kingdom

Deputy Chief of Staff for Operations for the Seventh Fleet, responsible for directing the operations of all combatant ships in the Seventh Fleet area of responsibility


Rear Admiral, Retired, Bruce Loveless Age 53 Coronado, CA

Previously a Captain and Assistant Chief of Staff for Intelligence for the Seventh Fleet, responsible for assessing and counteracting foreign intelligence threats within the Seventh Fleet’s area of responsibility


Captain David Lausman Age 62 The Villages, Florida

Executive Officer of the aircraft carrier U.S.S. Abraham Lincoln; Commanding Officer of U.S.S. Blue Ridge; Commanding Officer of U.S.S. George Washington


Lt. Commander Stephen Shedd Age 43 Colorado Springs, CO

Seventh Fleet’s South Asia Policy and Planning Officer, responsible for identifying ports that U.S. Navy ships would visit; and once promoted to Commander, served as Executive Officer and Commanding Officer of the U.S.S. Milius


Commander Mario Herrera Age 48 Helotes, Texas

Fleet Operations and Schedules Officer for the Seventh Fleet, responsible for scheduling the port visits for ships and submarines in the Seventh Fleet’s area of responsibility (Herrera was previously charged in February 2017 via complaint)


Chief Warrant Officer Robert Gorsuch Age 49 Virginia Beach, Virginia

Seventh Fleet’s Flag Administration Officer, responsible for providing administrative support to the Seventh Fleet Commander and other senior officers on the Seventh Fleet staff




Conspiracy to Commit Bribery, in violation of 18 U.S.C. § 371

Maximum Penalty: 5 years in prison, a $250,000 fine, or twice the gross pecuniary gain or twice the gross pecuniary loss, whichever is greater


Bribery, in violation of 18 U.S.C. § 201

Maximum Penalty: 15 years in prison, a $250,000 fine or twice the gross pecuniary gain or gross pecuniary loss from the offense, or three times the monetary equivalent of the thing of value, whichever is greater


False Statements, in violation of 18 U.S.C. § 1001

Maximum Penalty: 5 years in prison, a $250,000 fine


Obstruction of Justice, in violation of 18 U.S.C. § 1519

Maximum Penalty: 20 years in prison, a $250,000 fine


Conspiracy to Commit Honest Services Wire Fraud, in violation of 18 U.S.C. §§ 1349, 1346, 1343

Maximum Penalty: 20 years in prison, a $250,000 fine





Defense Criminal Investigative Service

Naval Criminal Investigative Service

Defense Contract Audit Agency


*The charges and allegations contained in an indictment or complaint are merely accusations, and the defendants are considered innocent unless and until proven guilty.










18 U.S.C. § 371

Conspiracy to Commit Bribery



18 U.S.C § 201(b)(2)(A) and (C)




18 U.S.C § 201(b)(2)(A) and (C)




18 U.S.C § 201(b)(2)(A) and (C)




18 U.S.C § 201(b)(2)(A) and (C)




18 U.S.C § 201(b)(2)(C)




18 U.S.C § 201(b)(2)(A) and (C)




18 U.S.C § 201(b)(2)(A) and (C)




18 U.S.C § 201(b)(2)(A) and (C)




18 U.S.C § 201(b)(2)(A) and (C)




18 U.S.C. § 1001(a)(2)

False Statements



18 U.S.C. § 1519




18 U.S.C. §§ 1349, 1346, and 1343

Conspiracy to Commit Honest Services Wire Fraud










Updated March 14, 2017

Public Corruption
Press Release Number: CAS17-0314-Loveless