The U.S. Justice Department released
the below information:
Two former executives of a
foreign defense contractor pleaded guilty in federal court today for
participating in a conspiracy to submit bogus bids, claims and invoices to the
U.S. Navy in an effort to steal tens of millions of dollars as part of a years-long
corruption and fraud scheme.
Acting Assistant Attorney
General Kenneth A. Blanco of the Justice Department’s Criminal Division, Acting
U.S. Attorney Alana W. Robinson of the Southern District of California,
Director Dermot F. O’Reilly of the Defense Criminal Investigative Service (DCIS)
and Director Andrew L. Traver of the Naval Criminal Investigative Service
(NCIS) made the announcement.
Neil Peterson, 39, and Linda
Raja, 44, both Singaporean nationals, each pleaded guilty to one count of
conspiracy to defraud the United States with respect to claims. Both defendants
were arrested by authorities in Singapore at the request of the U.S. government
and were extradited on Oct. 28, 2016. Sentencing for Peterson and Raja is set
before the Honorable Janis L. Sammartino of the Southern District of California
on Aug. 11, 2017.
Peterson and Raja worked for
Singapore-based Glenn Defense Marine Asia (GDMA). Peterson served as the Vice
President for Global Operations, and Raja served as General Manager for
Singapore, Australia and the Pacific Isles. According to their pleas, Peterson
and Raja conspired with Leonard Glenn Francis, the owner of GDMA, to defraud
the U.S. Navy in order to financially benefit GDMA.
As part of their pleas,
Peterson and Raja admitted that they and other members of GDMA’s management
team created and submitted fraudulent bids. These bids were either entirely or
partially fictitious. This ensured that GDMA’s quote would be selected by the
U.S. Navy as the supposed lowest bidder. As a result, GDMA could control and
inflate the prices charged to the U.S. Navy without engaging in any competitive
bidding, as required.
Additionally, Peterson, Raja
admitted that they and others knowingly created fictitious port authorities
with fraudulently inflated tariff rates and approved the presentation of these
fraudulent documents to the U.S. Navy. As a result, GDMA charged inflated
prices to the U.S. Navy, rather than what GDMA actually paid to the port
authorities. For example, in October 2012, Peterson and other members of GDMA’s
core management team directed that false documents and inflated invoices be
presented to the U.S. Navy for the U.S.S. Bonhomme Richard’s visit to Kota
Kinabalu, Malaysia. The full amount billed to the U.S. Navy for this visit was
$1,232,858, of which approximately $877,413 was fraudulently inflated.
Peterson and Raja admitted
that the U.S. Navy suffered losses exceeding $34.8 million in total, as a
result of the scheme.
Twenty U.S. Navy officials
have been charged so far in the fraud and bribery investigation. Additionally,
to date, five GDMA executives have been charged and pleaded guilty: (1) Alex
Wisidagama, (2) Francis, (3) Edmund Aruffo, (4) Peterson and (5) Raja.
Wisidagama was sentenced on March 18, 2016, to 63 months in prison and was
ordered to pay $34.8 million in restitution to the U.S. Navy. Francis and
Aruffo await sentencing.
A criminal complaint is
merely an accusation, and the accused is presumed innocent unless proven guilty
in a court of law.
The DCIS, NCIS and the
Defense Contract Audit Agency are investigating this matter. Assistant Chief
Brian R. Young of the Criminal Division’s Fraud Section and Assistant U.S.
Attorneys Mark W. Pletcher and Patrick Hovakimian of the Southern District of
California are prosecuting the case. The Criminal Division’s Office of
International Affairs provided substantial assistance in this matter.
Anyone with information
relating to fraud or corruption should contact the NCIS anonymous tip line at
www.ncis.navy.mil or the DOD Hotline at www.dodig.mil/hotline, or call (800)
424-9098.
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