The Federal courthouse building in downtown San Diego. (San Diego Union-Tribune/TNS)
(Tribune News Service) — Nearly 10 years to the day since federal prosecutors filed the first charges in what would come to be known as the "Fat Leonard" scandal and grow into the largest bribery and corruption case in U.S. Navy history, an assistant U.S. attorney on Wednesday admitted to "serious issues" with prosecutorial misconduct.
The remarkable admission came during a sentencing hearing for four former Navy officers who were convicted of several felonies during a trial last year. But those convictions were vacated Wednesday, and the defendants resolved their cases instead by pleading guilty to one misdemeanor each. They were given sentences that included no prison, probation or restitution — just a $100 fine.
U.S. District Judge Janis Sammartino said the misconduct by prosecutors from the U.S. Attorney's Office in San Diego "can only be described as outrageous."
She said defense attorneys for the four former officers have spent more than a year challenging their clients' convictions and uncovering misdeeds by prosecutors, and the U.S. Attorney's Office never responded.
"The only reasonable inference is that the allegations are true," Sammartino said.
Assistant U.S. Attorney Peter Ko, who was brought onto the case after last year's trial, said that while his office did not agree with every allegation of misconduct, it did acknowledge many of them were true. He did not specify which his office agreed with and which it did not.
"There were pretty obviously serious issues that affect our ability to go forward" defending the convictions or seeking a new trial, Ko told the judge.
The four officers — former Capts. David Newland, James Dolan and David Lausman and former Cmdr. Mario Herrera — were each convicted of several felonies last year following the only trial that resulted from the sprawling web of criminal cases connected to military contractor Leonard Glenn Francis and his company, Glenn Defense Marine Asia, or GDMA.
But in the 14 months since the trial ended, their attorneys argued that a "dizzying array of government misconduct" prevented the former officers from getting a fair trial. For more than a year the defendants sought either a new trial or a complete dismissal of the case.
On Wednesday, Ko asked Sammartino to vacate the trial convictions and accept a plea package. The judge signed off on the agreement. Each of the men was arraigned on misdemeanor charges. Each pleaded guilty and was sentenced to pay the fine.
Newland, 66, Dolan, 65, and Herrera, 55, pleaded guilty to one count each of disclosing information, while Lausman, 69, pleaded guilty to a charge of destruction of government property.
"This is not just a good thing for the defendants, this is a good thing for justice," Todd Burns, attorney for Dolan, told the judge. He described the misconduct by prosecutors as "jaw-dropping" and accused the former lead prosecutor in the case, Assistant U.S. Attorney Mark Pletcher, of lying to the judge.
"This agreement speaks to the seriousness of the misconduct" by prosecutors, Burns said. He told the judge that they lied repeatedly. "It's the impunity that's shocking."
He told the judge the prosecutors used their "tremendous power" to get witnesses to say what the prosecutors wanted to hear. "The prosecution team showed they were willing to do that," Burns said, calling the plea agreement "a bargain for the government" rather than his client and the other defendants.
The four officers had served in the Navy's 7th Fleet in the Eastern Pacific, an area where Francis — whose nickname "Fat Leonard" came from his girth — flattered and bribed Navy officers for at least a decade, then used his favored status to over-bill the Navy by tens of millions of dollars.
Since the day in September 2013 when armed federal agents burst in and arrested Francis inside his hotel room at the Marriott Marquis San Diego Marina, prosecutors have charged at least 32 people in connection with the scandal, and hundreds more have faced internal Navy discipline.
Beginning at least as early as 2006, Francis showered Navy officers with gifts of fancy meals, prostitutes, high-end hotel rooms and other perks. In return, they did his bidding, such as providing ship schedules for the 7th Fleet, or trying to steer Navy ships to ports around Southeast Asia that Francis and GDMA controlled. Once there, he gouged the Navy on services, including fuel, supplies, sewage disposal, security, shore transportation and more.
During the lone trial, which lasted from March to June of 2022, prosecutors presented the jury with evidence from emails, messages, invoices, receipts, other business records and cooperating witnesses seeking lighter sentences. Francis, who had already pleaded guilty and was long anticipated to testify for the government, did not end up taking the stand.
At the end of that trial and about three weeks of deliberation, the jury convicted Newland, Dolan, Lausman and Herrera of conspiracy to commit bribery, receiving bribes, and conspiracy to commit honest services wire fraud. Lausman was also convicted of obstruction of justice for destroying a computer hard drive with documents and emails. The jury deadlocked and reached no verdict on charges against a fifth defendant, retired Rear Adm. Bruce Loveless, and prosecutors later dropped those charges.
But what turned out to be the trial's key moment was not technically part of the jury proceedings. After defense attorneys accused the government of misconduct, Sammartino held an extraordinary three-day hearing, outside the presence of the jury, during which the lead prosecutor, Pletcher, had to take the stand.
Specifically, the defense attorneys accused Pletcher and the government of knowingly withholding information about a prostitute that was favorable to the defense. Pletcher, as well as federal investigators who had spoken with the prostitute, were asked to explain why they had not turned over evidence from the woman to the defense attorneys.
Weeks after the jury handed down its verdicts, Sammartino ruled that Pletcher committed "flagrant misconduct" by holding back the information but decided it was not enough to throw out the case.
In the months that followed, the defense attorneys continued fighting the convictions and levying new accusations of misconduct against the prosecutors.
The situation grew even more complicated last September, a little over two months after the verdict, when Francis fled from house arrest in San Diego. He was captured in Venezuela, where he remains.
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