U.S. Navy Petty Officer Charged In Bribery Investigation

BUSAN, Republic of Korea (March 17, 2010) Logistics Specialist 2nd Class Dan Layug, assigned to the U.S. 7th Fleet command ship USS Blue Ridge (LCC 19) and a member of the of the E-5 Leadership Organization, volunteers with a Republic of Korea navy sailor during a community service project at the Bluebird Home for the Aged. (U.S. Navy photo by Mass Communication Specialist 3rd Class Daniel Viramontes)

By Marty Graham

SAN DIEGO, April 17 (Reuters) – The fourth U.S. Navy official charged in the widening corruption investigation of a Singapore-based defense contractor made his first court appearance on Thursday, accused of accepting gifts of cash, electronics and luxury hotel stays.

Petty Officer First Class Dan Layug, 27, is charged with conspiracy to commit bribery, according to a complaint unsealed on Thursday. Tokyo-based Layug was arrested on Wednesday in San Diego, where he later appeared before a federal judge.

He is accused of accepting payments of $1,000 a month, plus expensive electronic gadgets and luxury hotel stays, in exchange for information he provided on Navy ships’ schedules to Glenn Defense Marine Asia, the company at the center of the scandal.

The company’s CEO, native Malaysian businessman Leonard Glenn Francis, is charged with plying Navy officials with cash, concert tickets, prostitutes and other gifts to win business.

U.S. Navy Commander Michael Misiewicz and Navy criminal investigations special agent John Beliveau were arrested on Sept. 16, 2013, at the same time as Francis, and charged with conspiracy to commit bribery.

Commander Jose Luis Sanchez was arrested and charged in November with accepting prostitutes, luxury travel and $100,000 in cash from Francis. Glenn Defense executive Alex Wisidagama, of Singapore, was also charged in the scandal. He and Beliveau have since pleaded guilty.

Two other high-level Navy officers – a vice admiral and a rear admiral – have been placed on leave, and a captain was removed from the command of an assault ship in connection with the investigation, but they have not been charged.

The complaints against Francis allege that he directed a scheme to defraud the Navy by bribing military officials to steer ships into harbors where his company would provide ship husbandry – a range of services from cleaning, restocking and refueling to shepherding Navy personnel during their port stay.

Francis, the complaints allege, would then inflate the charges for those services and demand kickbacks from his company’s subcontractors.

Court records indicate that Glenn Defense Marine Asia has been servicing Navy ships since at least 2009. In 2011, the company won a contract that officials estimate was worth at least $200 million.

U.S. Magistrate Judge Karen Crawford set Layug’s bond at $100,000 and ordered him to wear a GPS monitoring device to track his whereabouts.

If convicted, Layug faces up to five years in prison and a maximum fine of $250,000. (Editing by Steve Gorman and Paul Tait)

(c) 2014 Thomson Reuters, All Rights Reserved