Flag Officer, Seven Others Charged in GDMA Scandal

Rear Adm. Bruce F. Loveless (official photo, USN)

Published Mar 16, 2017 11:46 AM by The Maritime Executive

In an indictment released Tuesday and first reported by the Washington Post, the Justice Department announced corruption charges against Rear Adm. Bruce F. Loveless and seven others in connection with the Seventh Fleet's long-running "Fat Leonard" bribery scandal. This latest indictment brings the total number of individuals charged to 27, and prosecutors say that over 100 others have come under investigation. 

The others charged in Tuesday's indictment include Captain David Lausman, Captain Donald Hornbeck, Captain David Newland, Captain James Dolan, Commander Stephen F. Shedd, Marine Corps Colonel Enrico de Guzman and Chief Warrant Officer Robert Gorsuch. 

The charging documents describe an array of goods that Loveless and others allegedly accepted in return for providing classified information to Glenn Defense Marine Asia (GDMA), a Singapore-based port services firm that depended upon U.S. Navy business. The alleged bribes included luxury goods and hotel stays, the majority of which were worth less than $25,000 dollars. In addition, five of the defendants are accused of participating in illicit acts paid for by GDMA, including a “raging multi-day party, with a rotating carousel of prostitutes" for officers of the Seventh Fleet flagship USS Blue Ridge. 

The Justice Department contends that all told, the bribery scheme helped GDMA to overcharge the Navy by approximately $35 million. When compared to the scope of the fraud, the value of the alleged bribery suggests that each defendent received less than one percent of GDMA's corrupt proceeds. 

Rear Adm. Loveless ran the Pacific Command’s Joint Intelligence Operations Center from 2009 to 2012, and went on to serve as the Navy's director of intelligence operations. In 2013, Navy leaders revoked his top-level security clearance and reassigned him when they learned that Loveless and his superior, head of Navy intelligence Vice Adm. Ted Branch, were being investigated in connection with the bribery scandal. 
Branch also lost his clearance, but he was allowed to remain the chief of naval intelligence for three years, despite being banned from accessing classified materials. Both Branch and Loveless retired in October 2016.