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First 7th Fleet Guilty Plea in Long-Running “Fat Leonard” Fraud Case

first 7th Fleet guilty plea in bribery case
Among the information passed to the contractor was details on the schedule of the USS Tarawa (US Navy file photo)

Published Sep 3, 2021 2:52 PM by The Maritime Executive

More than four years after the indictments were filed, the U.S. Department of Justice announced the first guilty plea by an officer in the Seventh Fleet in the Navy’s bribery and fraud scandal known as the “Fat Leonard” case. The largest fraud case in Navy history has resulted in federal charges against 34 Navy officials, defense contractors, and the Singapore-based Glen Defense Marine Asia owned by Leonard Francis, the defense contractor who plied them with luxury hotel stays, meals, entertainment, and prostitutes. So far, a total of 26 individuals have pleaded guilty.

The latest guilty plea came from retired Chief Warrant Officer Robert Gorsuch who on August 31 in federal court in the Southern District of California admitted to receiving more than $45,000 in bribes. Gorsuch served as the Seventh Fleet’s Flag Administration Officer from January 2005 to March 2008. In his position, Gorsuch provided administrative support to the Seventh Fleet Commander, department heads, and other senior officers of the Seventh Fleet staff. The incidents that he pled guilty to included parties in Manila, hotel stays in the Philippines, Malaysia, and Japan, and a dinner in Australia dating from 2007 and 2008.

“Mr. Gorsuch will be held fully accountable for accepting lavish gifts in exchange for, among other things, passing classified information to Mr. Francis and GDMA,” said NCIS Director Omar Lopez. Gorsuch, age 54, is facing a maximum penalty of fifteen years in prison and a fine of up to $250,000.

According to admissions in his plea agreement, Gorsuch sent Francis computer disks containing classified ship schedules for the Navy’s Seventh Fleet. Prosecutors documented emails between Gorsuch and Francis in 2007 and 2008 which among other details described the planned movements of the U.S.S. Tarawa and U.S.S. Hopper for December 17-21, 2007. Other emails showed Francis in 2008 requesting ship schedules and Gorsuch promising to reply with the information.
 
“Gorsuch essentially sold his honor for a few nights at the Shangri-La,” said Acting U.S. Attorney Randy Grossman. “Gorsuch sacrificed his integrity for so little and caused so much harm in the process. Today, Gorsuch has admitted his part in this scandal and will be held to account for his conduct.”

Investigators said the actions and information provided by Gorsuch and the other defendants helped Francis’ ship husbanding business win and maintain contracts with the U.S. Navy. They estimate that Francis’s company over billed the Navy by over $35 million.

Gorsuch was one of nine members of the U.S. Navy’s Seventh Fleet indicted in March 2017 for participating in a conspiracy with Francis. The remaining defendants, who are accused of trading military secrets and substantial influence for sex parties with prostitutes, extravagant dinners, and luxury travel, are scheduled for trial on November 1, 2021. They include U.S. Navy Rear Admiral Bruce Loveless; Captains David Newland, James Dolan, Donald Hornbeck, and David Lausman; Colonel Enrico DeGuzman; Lt. Commander Stephen Shedd; and Commander Mario Herrera.