Lavished Certain businessmen aren’t strangers to luxury.
In a world where international relations are set to the background of expensive dinners,
lavish vacations and the most exclusive wines, it doesn’t come
as a surprise someone might’ve used it as an opportunity to scam people out of money.
And that’s exactly what Fat Leonard did– and to none other than the US Navy.
With bribes that included exclusive gifts like Cuban cigars, $30,000 hotel
bills and fancy cognac, Leonard was able to secure port contracts with the Navy,
turning himself into the go-to man when it came to port activities in Southeast Asia.
Fat Leonard would overbill his services to the Navy with the consent of some of the
institution’s top officials, thus making a ton of money to use as bribe again.
Leonard Francis Infamously known as “Fat Leonard”, Leonard Francis
was raised in Penang, Malaysia, where he lived a very financially comfortable life since childhood.
Although he was part of a wealthy family, the drama inside his house was far from nurturing: his
mom, aware of his father’s constant infidelities, turned him into her personal informant to prevent
his father from bringing other women home. She also abandoned him and took his siblings with her.
Francis’ family had inherited his grandfather's maritime logistics firm, which he founded in
1946 and had successful business in some of the busiest ports in Southeast Asia.
Early Troubles Notoriously obese
from a young age, Francis faced legal troubles as a young adult. At 21, he was arrested after
Malaysian police found a series of guns in his property– a terrible infraction in the country.
Added to this, he was the owner of an infamous bar where sketchy individuals were the usual patrons.
Although he was able to escape the first sentence –he would’ve had to go to prison and receive a
whipping– his charges were later appealed by the court and he was sentenced to 18 months in jail.
He took this as a push forward and decided to fully immerse
himself in his family’s maritime logistics firm.
He didn’t know much about it, but made sure to hire a string of retired Navy officers
and former officials from the navies of Malaysia and the Philippines to teach him about the trade.
He then ventured outside Malaysia and opened his headquarters in Singapore. At this time,
his company was serving ports all over Asia. He was able to secure contracts with the US
Navy and also internationally with navies from Mexico, Netherlands and India. At one point,
his company had more than 50 vessels and introduced a special protection
service with trained military men from Nepal to ward off pirates from their client’s ships.
Glenn Defense Over the years,
Francis was able to create a lucrative and direct connection with the US Navy. At one point, he was
the main supplier of fuel and other goods for their vessels. He used his expertise and access
to goods to get a lot of Navy informants so he could steer business his way for around 25 years.
By pitching their services for a notoriously low fee,
Glenn Defense made sure they were an attractive bet for the Navy. Using its internal contacts,
the company would then start billing them with new invoices for fake services and thus
increasing the amount of money the Navy had to pay– the essence of its overcharging scheme.
Many rivals, including DaeKee Global, a South Korean company, had complained about
the low bids. In their case, Glenn Defense had pitched their services for almost a third of
the price DaeKee was going for. A clear indicator of something weird happening.
But this wouldn’t stop Francis from continuing his streak of flirts with the Navy. On one occasion,
his company became the prime donor of the Navy League of the United States,
a nonprofit related to the institution. At one of
their events, Glenn Defense donated two matching Rolex watches worth $30,000.
Hospitality Francis lived up
to his reputation as a rich man. Whenever his cars would be seen in the streets in Singapore,
people would look closely. He was also known for going extra on his holiday decorations for his
70,000 square-foot home. It was reported that he once spent $75,000 on the creation of a
Christmas light showcase at his home that drew the attention of hundreds.
Francis went all out when receiving Naval officers. He would personally greet them as
the ship arrived at the pier and made sure the arrangements for the shopping trips, concerts
and events were all taken care of – even going as far as arranging a limo and personal driver.
Banquets, parties and everything else was part of the roster. The officers
would enjoy meals ranging from expensive Kobe beef to Cuban cigars and whiskey.
Francis would also call in his “elite” team of Thai pole dancers for adult entertainment.
The officers would thank him extensively through personalized Bravo Zulus– notes
using the navy slang for “well done”. In them,
they would explain how his hospitality was something they’d remember for a long time.
Francis felt proud whenever he received a note like this. He would display the
notes in the company’s brochures as a way of getting further endorsements.
High Bills Francis’s tactics
were based around overbilling the Navy for his services, with the consent of the higher
ranking officers whom he had seduced with expensive goods and trips. But this didn’t
come without its fair share of lower ranking officials who would question the bills.
David Schaus, a junior officer in charge of accounts, was once faced with a bill for 100,000
gallons of fuel that were allegedly pumped into one of their vessels. This was an impossible
amount since the vessel only required 12,000. When he personally called Francis to question
him about it, Francis got mad and insulted him. His supervisors at the Navy told him to leave it.
Bribes Parties were
his go-to tactic to convince officers to give him money. This one time, during Christmas,
Francis threw a lavish celebration at a five-star hotel that included Dom Perignon, lobster and an
array of expensive meals. As per tradition, he also included some lady escorts dressed as
Santa’s little helpers– some of whom went to a private after party with a few senior officers.
The next day, Francis sent them a bill for $600,000 stating it
was for a “sewage service”. After some hesitation,
the officer in charge agreed to pay for it as a retribution for the party.
Moles To get his hands on internal
information from the Navy, Francis bribed some people working directly inside the institution.
For example, he contacted Sharon Kaur, a Navy worker from Singapore, who admitted to receiving
$100,000 in cash and luxury vacations in Dubai in exchange for internal contract information.
Francis also reached out to Paul Simpkins, a Navy contract supervisor, who helped him
rig Navy contracts in the Philippines and Thailand for an initial $50,000 that turned into
$450,000 after Simpkins asked for more.
Over time, Francis slowly penetrated the higher ranks of the Navy to the point
where commanding officials would be asking for plane tickets, prostitutes and other offerings
on a daily basis. It was his people skills that made him so successful and on demand.
Psychological Warfare Francis’ approach wasn’t
only financial– he used devious techniques to befriend the officers and know exactly
what their weak points were. He employed his charm to approach the men, get to know them,
and then give them what they needed based on their personalities: travel tickets, prostitutes
or money. Sometimes all of them. It was a sure way to secure information on his competitors.
Sometimes, Francis would use simple tech gadgets like cell phones or video game
consoles as bribes for the officers. Such was the case of Dan Layug, who provided
Glenn Defense with insider information about its competitors for around 3 years.
Francis and his team handed him a new phone, a tablet computer and hotel reservations all
over Asia until eventually they ended up giving him a $1000 a month allowance.
Investigation When investigators
began to take notice of Fat Leonard’s strategy, he didn’t budge– Francis deviced another way to
keep track of what was happening. He used his known tactics to turn NCIS agent John Beliveau
into his personal informant. Beliveau would supply him with material investigators had on the company
by going into the NCIS database. In exchange, as usual, Francis sent him some prostitutes and cash.
Even with an investigation under way, Glenn Defense was still able to score
three more contracts with the Navy for up to $200 million. The agreements meant they
were able to serve ports all over Asia, Australia and the larger Pacific area.
The Navy went as far as making him a semi-permanent feature at its events–
he was invited to change of command ceremonies in San Diego and Hawaii.
As this was going on, the Navy started taking measures to catch Francis. They
decided to draw up fake reports that indicated Glenn Defense’s case was closed and no further
investigation was needed. After learning this, Francis traveled to San Diego for a ceremony
and another business proposal meeting with the Navy. Once he finished his presentation,
he went back to his hotel, where he was arrested.
John Beliveau had a similar fate: he was arrested in Washington on the same day and pleaded guilty.
Court Finally faced in court, Francis pleaded
guilty to federal charges of bribery, conspiracy to commit bribery and conspiracy to defraud. Fat
Leonard confessed to having overcharged the Navy for the services provided in several ports all
over Asia and paid off officials with lavish gifts like expensive alcohol, hotel accomodations and
even handmade ship models. He went on to supply information about some of the officials that
worked for him as moles by handing him inside data from the Navy as well as his competitors.
Francis faced up to 25 years in prison and was ordered to pay up to $35 million
as restitution for the money he illegally took from the Navy. And while he confessed
and “took accountability” according to the court, he still named seven different Navy
officials who were part of his scam as a way to seem more cooperative.
On the Lam Just a mere three
weeks before he was to be sentenced, Francis was nowhere to be found. According to the media,
he took off his ankle bracelet and escaped. Many neighbors of the rental house he was
staying said they saw many cars with out-of-state plates and even an U-Haul van outside his home.
Fat Leonard had been granted a special medical furlough because of his health
with which he was able to live in a rental home in California
during the time of the trial with his three children and mother.
The Court had ordered Francis to be watched 24/7. On many occasions, the judge stated their
worries about the possibility of Francis playing a trick like this. He had multiple requests denied,
including one where he wanted to walk his kids to school. One time,
it was reported his home went without surveillance for three whole hours– Francis went to court to
apologize, stating the security guard in charge had taken a long lunch break.
San Diego Police received an anonymous call around 2pm that requested a check on Francis’ location.
Police stormed the property only to find it empty– no security guards were found and his
bracelet was cut off and found inside a cooler. Since Francis was located
a 40-minute drive from Tijuana, it was highly possible he had fled the country. US Marshals put
out a red notice requesting law agencies around the world for help in locating and arresting him.
Interpol finally caught him at a Caracas airport in Venezuela. Francis had flown to Venezuela
from Mexico, first making a stop in Cuba– it was reported he was about to board a flight to Russia.
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Let us know in the comment section what you’d rather do,
go to jail for 10 years or pay a million dollar fine!