Neil Peterson and Linda Raja, former executives with Glenn Defense Marine Asia (GDMA), have pled guilty to charges of “conspiracy to defraud the United States with respect to claims” in connection with the Leonard "Fat Leonard" Glenn Francis scandal. Over a dozen suspects have admitted involvement in the long-running corruption scheme, which cost the U.S. Navy about $35 million in over-billed or fraudulently billed port services charges.
During the period covered by the indictment, Peterson was GDMA's vice president for global operations and Raja was the firm's general manager for Australia, Singapore and the Pacific Isles. They were arrested in Singapore last October and extradited at the request of American prosecutors.
According to the Department of Justice, the defendants admitted to creating and submitting fraudulent bids to ensure that GDMA would be selected as the Navy’s lowest bidder for a variety of in-port services. This allowed GDMA to avoid competitive bidding and to inflate its prices for incidental charges. In a more daring form of fraud, Peterson and Raja created fictitious port authorities in order to charge the Navy inflated port tariff rates, then passed on the real (lower) rate to the legitimate authorities.
The original indictment further alleged that Peterson and Raja “would submit fraudulent representations related to the acquisition of fuel . . . including fraudulent representations about the unavailability in certain countries of the type of fuel required by U.S. Navy vessels.”
So far, prosecutors have charged twenty Navy officials in connection with the scandal, including Rear Adm. Robert J. Gilbeau, the first ever active duty flag officer to face criminal charges in a federal court, and Rear Adm. Bruce F. Loveless. Five GDMA executives have pled guilty, including Francis himself. The Department of Justice says that over 100 other persons of interest have come under scrutiny in the sweeping investigation – including more flag officers.