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Two Former Executives Who Worked With Fat Leonard Sentenced To Prison

U.S. military service members stand on a deck in this undated photo.

Credit: U.S. Department of Defense

Above: U.S. military service members stand on a deck in this undated photo.

Two former executives for a foreign defense contractor were sentenced in San Diego Friday to prison terms in connection with a scheme through which the company received proprietary military information from Navy officials in exchange for cash, luxury hotel stays and the services of prostitutes.

RELATED: Navy Grappling With Ethical Issues Raised By Fat Leonard Case

Neil Peterson, 39, and Linda Raja, 44, were ordered to serve 70 and 46 months in custody, respectively, for conspiring to submit bogus claims and invoices in an effort to win contracts for Singapore-based Glenn Defense Marine Asia and overcharge the U.S. government by tens of millions of dollars.

In handing down the sentences, U.S. District Court Judge Janis Sammartino called the widespread fraud and bribery scheme "one of the most horrific situations" she had ever dealt with in her courtroom.

"These procurement fraud and bribery schemes are a cancer on the American public," Sammartino said.

Peterson and Raja were "creative, deceitful and audacious" in their machinations to manipulate the Navy and steal from American taxpayers, according to acting U.S. Attorney Alana Robinson.

"These sentences are a reminder that everyone who played a role in this massive fraud — whether public officials or defense contractors — will pay a high price," she said.

Peterson and Raja, both of Singapore, worked as chief deputies for foreign defense contractor Leonard Glenn "Fat Leonard" Francis.

Peterson served as vice president for global operations for GDMA, while Raja was GDMA's general manager for Singapore, Australia and the Pacific Isles.

They were arrested by Singapore authorities at the request of the U.S. government and extradited in October. They pleaded guilty to fraud charges three months ago.

According to the defendants' plea agreements, they and other members of GDMA's management team created and submitted fraudulent bids that were entirely fictitious, contained falsified prices supposedly from actual businesses or fraudulently stated that the business shown on the letterhead could not provide the items or services requested.

By those means, Peterson, Raja and other members of GDMA's core management team could ensure that GDMA's quote would be selected by the U.S. Navy as the supposed low bidder.

GDMA could thus control and inflate the prices charged to the U.S. Navy without any true competitive bidding, which is required.

Peterson and Raja admitted that they and other members of the company's management team knowingly created and approved fictitious port authorities with fraudulently inflated tariff rates and approved the presentation of such fraudulent documents to the U.S. Navy.

GDMA thus charged inflated prices to the U.S. Navy, rather than what it actually paid to the bona fide port authorities.

Seventeen of 27 defendants charged in the bribery and fraud scandal have pleaded guilty. Ten of those were Navy personnel, including Rear Adm. Robert Gilbeau, Cmdr. Jose Luis Sanchez, Lt. Cmdr. Todd Malaki, Capt. (Select) Michael Misiewicz, Capt. Daniel Dusek and John Beliveau, a special agent with the Naval Criminal Investigative Service.

Leonard pleaded guilty in January 2015 to bribery and conspiracy to defraud the United States and still awaits sentencing.

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