A US Navy commander has been accused of passing secrets to a Malaysian businessman in exchange for bribes, including access to prostitutes and Lady Gaga tickets.
Navy commander Michael Vannak Khem Misiewicz allegedly passed confidential information on ship routes to Singapore-based company, Glenn Defence Marine Asia Ltd (GDMA).
GDMA chief Leonard Francis is accused of conspiring with Misiewicz to divert US aircraft carriers, destroyers and other vessels to Asian ports with lax oversight where Francis could inflate costs.
Francis' firm overcharged the Navy millions of dollars for fuel, food and other services it provided, and invented tariffs by using phony port authorities, prosecutors allege.
A criminal complaint says Francis used his connections to obtain the secrets by lining up prostitutes, Lady Gaga tickets and other bribes for the US commander.
US Navy handout photo of the USS Essex leaving a Malaysian port in 2011
Nicknamed "Fat Leonard", the gregarious businessman is well known by Navy commanders in the Pacific, where his company has serviced warships for 25 years.
Rear Admiral Terry McKnight, who does not know Francis personally, said the businessman is legendary in military circles in that part of the world.
"He's a larger-than-life figure," he said. "You talk to any captain on any ship that has sailed in the Pacific and they will know exactly who he is."
So far, authorities have arrested Misiewicz and Francis, as well as GDMA's general manager of global government contracts, Alex Wisidagama.
A senior Navy investigator, John Beliveau II, is also being held.
He is accused of keeping Francis abreast of the probe and advising him on how to respond in exchange for such things as luxury trips and prostitution services.
All have pleaded not guilty and defence attorneys have declined to comment ahead of a November 8 hearing.
Misiewicz, a native of Cambodia, made an emotional return in 2010
Meanwhile, the federal government has suspended its contracts with Francis' company.
Senior Navy officials said they believe that more people would likely be implicated in the scheme, but it was too early to tell how many or how high this will go in the naval ranks.
Navy spokesman Rear Admiral John Kirby said Navy Criminal Investigative Service agents initiated their probe in 2010.
That same year, Misiewicz caught the world's attention when he made an emotional return as a US Naval commander to his native Cambodia, where he had been rescued as a child from the violence and adopted by an American woman.
Meanwhile, Francis was recruiting him for his scheme, according to court documents.
Within months, Misiewicz was allegedly providing Francis movement schedules for the USS George Washington Carrier Strike Group and other ships.
Shortly after that, prosecutors claim the manager wrote to Francis: "We got him!!:)"
The company bilked the Navy out of $10m in just one year in Thailand alone, US Attorney Laura Duffy said.
The defendants face up to five years in prison if convicted of conspiracy to commit bribery.
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