Federal prosecutors in San Diego filed an unusual briefing late Tuesday that opened the door for potential relief for those who have already been convicted and sentenced in connection with the U.S. Navy’s “Fat Leonard” corruption scandal. That relief could come in different forms, such as the reduction of charges, potentially even for defendants who have already served multi-year prison .
It was not immediately clear Wednesday how many of the three dozen or so defendants charged over the past decade in connection with the worst bribery and corruption scandal in Navy history could be eligible for such relief, or how many would seek it out. But the mere possibility stunned those close to the case, which has crumbled considerably since significant cracks first started to appear during the lone trial in 2022.
“After all these years, the dominoes are continuing to fall,” said Thomas O’Brien, defense attorney for retired Rear . Bruce Loveless, whose charges were dismissed after a jury deadlocked in its decision against him. “The case is unraveling against not just the officers who went to trial, but the individuals who didn’t go to trial.”
Tuesday’s filing by the U.S. Attorney’s Office was part of a t effort with defense attorneys to reduce charges for four military officers who have pleaded guilty to felonies but not yet been sentenced, and to entirely dismiss charges against a fifth such defendant. Prosecutors had previously completed a similar effort when they vacated the trial convictions of four Navy officers in favor of misdemeanor deals. But U.S. District Judge Janis Sammartino blocked the second such effort, ordering both the government and the defendants to submit arguments why she should accept such unique resolutions.
San Diego judge skeptical about reducing or dismissing more charges in ‘Fat Leonard’ prosecutionIn response to that order, First Assistant U.S. Attorney Peter Ko, the second-in-command in the federal prosecutor’s office, laid out the legal reasoning for seeking the reductions and the dismissal, citing the prosecutorial “issues” that his office has previously itted to in court.
“We acknowledge certain issues affected the prosecution of this case,” Ko wrote. A list of those issues included the finding by Sammartino that Assistant U.S. Attorney Mark Pletcher, one of the trial prosecutors, committed “flagrant misconduct” by withholding information from defense attorneys; the failure by prosecutors to disclose mistakes made by a federal agent involved in the investigation; and the “handling and treatment” of Leonard Glenn Francis, the Malaysian defense contractor nicknamed for his girth at the center of the case.
Quoting rulings in other cases that allow prosecutors discretion to dismiss cases, Ko wrote: “a prosecutor requesting dismissal ‘based on broad considerations of justice’ like this case is not only not contrary to public interest, ‘it is the duty of the United States Attorney.'”
Ko also noted that Sammartino had expressed concern about sentencing disparities if she allowed the five defendants to have their charges dismissed or reduced after she had sentenced a similarly situated defendant, former Navy Capt. Jesús Vasquez Cantú, to 30 months in prison.
“The United States is committed to ensuring all the defendants receive any redress that is owed them for the (prosecution) issues,” Ko wrote. “… Our review of other cases to determine if other defendants were affected by the issues above and merit relief is ongoing.”
What exactly potential relief could look like for someone like Cantú was still unclear Wednesday. Cantú’s attorney did not respond Wednesday to a request for comment whether he and his client would seek any sort of redress.
“I’m going to presume those who have pled guilty to felonies will petition to be allowed to withdraw their guilty pleas and plead to a misdemeanor instead,” O’Brien said. He added that the impact of a felony conviction in a person’s life is much more serious than a misdemeanor, and that lesser charges could also come with reductions in fines and restitution orders.
O’Brien’s client, Loveless, need not worry about seeking such relief, since prosecutors dismissed the case against him after the jury deadlocked. But O’Brien said that if he represented a client that had previously pleaded guilty, his first step now would be to reach out to the prosecutors and ask if they would stipulate to a reduction to a misdemeanor. If rebuffed in that effort, he said he would file a habeus petition.
For years, the “Fat Leonard” case seemed sturdy as prosecutors racked up prosecutions against dozens of Navy officers. The government alleged that from at least 2006 to 2014, Francis showered the officers with bribes of fancy meals, prostitutes, high-end hotel rooms and other perks. In exchange, the officers did Francis’ bidding, providing ship schedules for the Navy’s Seventh Fleet and steering Navy ships to ports around Southeast Asia where Francis and his company, Glenn Defense Marine Asia, could gouge the Navy on services.
Francis pleaded guilty early in the case, itting that he defrauded the Navy of at least $35 million, and subsequently cooperated with the prosecution for years. But as the case’s lone trial approached, cracks began to show. In late 2021, journalist Tom Wright released a podcast that Francis had secretly recorded while on house arrest — likely a factor in why Francis was not called as a witness during the proceedings.
The trial itself was interrupted by a three-day hearing to largely sort out the misconduct accusations against Pletcher. While the jurors eventually deadlocked on the charges against Loveless, they convicted former Capts. David Newland, James Dolan and David Lausman and former Cmdr. Mario Herrera of multiple felonies each.
A few months after the trial ended, and weeks before Francis was scheduled to be sentenced in September 2022, he absconded from the luxury San Diego home where he was living on house arrest. Francis ended up in Venezuela, where he was captured and jailed until late last year, when he was sent back to the U.S. as part of a prisoner swap.
While Francis was in Venezuelan custody, attorneys for the four convicted trial defendants accused prosecutors and investigating agents of more misconduct. Last September, rather than respond to those allegations, the U.S. Attorney’s Office itted to “serious issues” with the case and prosecution errors involving evidence. The government then vacated the trial convictions. Newland, Dolan, Lausman and Herrera instead pleaded guilty to misdemeanor charges that spared them from prison.
In December, coincidentally on the same day that Francis was returned to the U.S., prosecutors attempted to reduce or dismiss the charges against some of the men who had testified at the trial. Among them was former Navy Cmdr. Stephen Shedd.
“We do not think it is fair or just for this defendant who acknowledged his guilt and testified publicly against peers of similar or greater culpability to be penalized more harshly or the same,” Ko wrote at the time. “Considering how the (trial) cases ended, through no fault of Shedd’s, dismissal is the only realistic way to differentiate his effort to mitigate his wrongs.”
Prosecutors also proposed allowing former Navy Cmdr. Jose Luis Sanchez, retired Chief Warrant Officer Robert Gorsuch, former Capt. Donald Hornbeck and retired Marine Col. Enrico “Rick” DeGuzman to plead to lesser misdemeanors after previously pleading guilty to felonies.
But Sammartino nixed that plan, telling the attorneys for both sides that the “community deserves to understand what happened in this case” and that “justice requires more information before these matters can be resolved.”
A hearing is set for May 21 to determine if Sammartino will allow Shedd’s dismissal and the misdemeanor deals for Sanchez, Gorsuch, Hornbeck and DeGuzman.
