A federal judge in San Diego on Tuesday blasted the U.S. Attorney’s Office for “gross misconduct” in prosecuting the “Fat Leonard” U.S. Navy corruption scandal, saying the continued collapse of the case is an “embarrassment for the government.
U.S. District Judge Janis Sammartino said during a hearing in her San Diego courtroom that “prosecutor misconduct has begun to unravel this case.” She called it an “extremely unfortunate” situation that was “the government’s fault.”
Sammartino made the comments during a hearing in which she agreed – reluctantly – to dismiss a previous guilty plea from the former Navy commander. Stephen Shedd and has denied all charges against him. She also dismissed the criminal pleas of three other former Navy officers and a retired Marine colonel and allowed the four men to each plead guilty to a single misdemeanor.
In a similar move last year, following the same government misconduct, the judge overturned the jury convictions of four Navy officers who had been found guilty at trial and allowed them to plead guilty to misdemeanor charges.
Sammartino made clear Tuesday that there was no new information to suggest that the five defendants in his courtroom did not accept the bribes or commit the acts to which they previously pleaded guilty. But she said the misconduct and its snowball effect made dismissing Shedd’s charges and allowing the four misdemeanor plea deals the best remaining option.
“While this is not a perfect resolution, there is merit in minimizing the disparities in this case,” the judge said. If their previous felony pleas had been left hanging, the officers who pleaded guilty would have faced harsher penalties than those who went to trial.
Sammartino also said the government’s continued lack of communication with the public and military community on issues related to the lawsuits was “troublesome.”
U.S. Attorney Tara McGrath, who was present in the courtroom, later declined to comment.
Tuesday’s hearing was the latest twist in what has become a dramatic outcome in the lawsuit against dozens of Navy officers who accepted bribes from Leonard Glenn Francis, aka “Fat Leonard.” the Malaysian entrepreneur at the center of the corruption scheme.
Leonard Glenn Francis, also known as “Fat Leonard”
(Courtesy of the US Marshals Service)
The government has alleged that between at least 2006 and 2014, Francis showered these officers and others with bribes in the form of fancy meals, prostitutes, high-end hotel rooms and other benefits. In exchange, the officers obeyed Francis’s orders, providing ship schedules for the Seventh Fleet and directing the ships to ports in Southeast Asia where Francis and his company, Glenn Defense Marine Asia, could swindle the Navy on the services.
Since Francis was arrested in 2013 during a sting operation at a San Diego hotel, prosecutors have racked up dozens of guilty pleas in the case. Francis pleaded guilty early on, admitting to defrauding the Navy of at least $35 million, and subsequently cooperated with the prosecution for years.
But as the case dragged on, it began to show cracks. Defense attorneys raised questions about evidence they believed prosecutors tried to hide — questions that led Sammartino to say that Assistant U.S. Attorney Mark Pletcher, the former lead prosecutor in the case, had committed a “flagrant mistake”. Defense lawyers also questioned the reliability of other documents in the case and the prosecution’s failure to disclose that a key investigator made false statements in a similar investigation. Defense lawyers also raised alarm over the preferential treatment Francis received while under house arrest before he absconded and fled the country in late 2022. He has since been returned to the United States as part of ‘an exchange of prisoners.
Sammartino cited those issues in a numbered list Tuesday to explain his decision to reject the guilty pleas of Shedd and the four others: former Navy Cmdr. José Luis Sánchez; retired Chief Warrant Officer Robert Gorsuch; former Navy Captain Donald Hornbeck; and retired Marine Corps Col. Enrico “Rick” DeGuzman.
Prosecutors had tried to resolve the cases the same way at a hearing in December, but Sammartino then rejected the plan, saying lawyers for both sides had failed to provide a legal argument for such measures. drastic. Prosecutors filed a brief last month laying out their legal reasoning.
Sammartino said Tuesday that the filing was “barely” sufficient and provided the “bare minimum” information needed for her to accept the proposed resolutions.
In that filing, First Assistant U.S. Attorney Peter Ko acknowledged that problems with the case could affect even more defendants than the nine who have already had their guilty pleas or convictions thrown out. Ko wrote that the government was “committed to ensuring that all defendants receive any relief they are owed for (prosecution) matters” and said prosecutors were reviewing other cases to determine whether other defendants deserved relief due to prosecution problems.
It’s still unclear exactly what that potential relief might look like, but several attorneys whose clients had already been convicted in the case were on hand Tuesday to observe the proceedings.
The four defendants who pleaded guilty to misdemeanors Tuesday had previously agreed, as part of their felony guilty pleas, to pay varying amounts of restitution totaling more than $285,000. As part of their new deals, they were each ordered to pay a $100 fine, but without any detention period or restitution requirements.
In previous plea deals, they admitted accepting expensive perks — fancy dinners, luxury hotel stays, prostitutes and gifts — in exchange for helping Francis. DeGuzman admitted to providing Francis with proprietary information, helping him evaluate other potential recruits and disparaging GDMA’s competitors. Gorsuch admitted passing classified information to Francis about the planned movements of two ships. Hornbeck admitted to using his influence to direct contracts with Francis. Sanchez admitted to providing Francis with confidential information such as ship schedules, supply needs and competing bids.
Shedd admitted to sending Francis classified information about planned ship movements and providing him with proprietary invoices from GDMA’s competitors so Francis could undermine their bids.
Prosecutors said Shedd warranted a complete dismissal of the case because he testified at trial. “We do not believe it is fair or just that this defendant who admitted guilt and testified publicly against peers of similar or greater culpability should be penalized more harshly or in the same manner,” Ko wrote in a filing l ‘last year. “Given the way the cases (lawsuit) ended, through no fault of Shedd, dismissal is the only realistic way to differentiate his efforts to mitigate his harm.”
One of the big questions now is whether Francis himself will be eligible for any relief as a result of the government’s misconduct — although his situation is very different from that of the other defendants. Not only did Francis flee the country shortly before his sentencing, but he is also part of the suspicious chain of custody surrounding some documents in the case. Francis also failed to testify at trial, as expected, and recorded a secret podcast while under house arrest.
Francis has remained imprisoned since December, when he was returned from Venezuela to the United States in a prisoner exchange. Prosecutors tried to move forward with his sentencing, but Sammartino delayed scheduling the sentencing to give Francis time to find a new lawyer. Several hearings to resolve his legal representation did not resolve the issue, but Sammartino ordered Francis to find a new lawyer by his next hearing on May 31.
California Daily Newspapers
