The U.S. Justice Department
released the below information:
Two former executives of
foreign defense contractor Glenn Defense Marine Asia (GDMA) were sentenced
today for conspiring to submit bogus claims and invoices to the U.S. Navy in an
effort to win contracts and overcharge the U.S. Navy by 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 Andrew L. Traver of the Naval Criminal Investigative Service (NCIS) and
Director Dermot F. O’Reilly of the Defense Criminal Investigative Service
(DCIS) made the announcement.
Neil Peterson, 39, and Linda
Raja, 44, both of Singapore, were sentenced to 70 and 46 months, respectively,
by U.S. District Judge Janis L. Sammartino
of the Southern District of California.
Both worked as chief deputies for GDMA, which was owned by Leonard Glenn
Francis. Peterson served as the vice
president for global operations for GDMA and Raja served as GDMA’s general
manager for Singapore, Australia and the Pacific Isles.
Both defendants were arrested
by authorities in Singapore at the request of the U.S. government and were
extradited on Oct. 28, 2016. They each
pleaded guilty in May 2017 to one count of conspiracy to defraud the United States
with respect to claims.
According to admissions made
as part of Peterson’s and Raja’s plea agreements, they and other members of
GDMA’s management team created and submitted fraudulent bids that were either
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. In this manner, 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, as
required, they admitted.
Peterson and Raja admitted
that they and other members of the GDMA management team knowingly created and
approved fictitious port authorities with fraudulently inflated port 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 GDMA
actually paid to the bona fide port authorities.
For example, Peterson and
Raja admitted that for the visit of the U.S.S. Bonhomme Richard to Kota
Kinabalu, Malaysia, in or about October 2012, under the direction of Peterson
and other members of GDMA's core management team, false documents and inflated
invoices were presented to the U.S. Navy.
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.
Peterson and Raja admitted
that losses to the U.S. Navy exceeded $34,800,000 as a result of this scheme.
So far, 17 of 27 defendants
charged in the U.S. Navy bribery and fraud scandal have pleaded guilty. All defendants are presumed innocent unless
and until convicted beyond a reasonable doubt in a court of law.
The DCIS, NCIS and the
Defense Contract Audit Agency are investigating. 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 and are
prosecuting the case. The Criminal
Division’s Office of International Affairs provided substantial assistance in
this matter.
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