U.S. Navy petty officer pleads guilty in corruption scandal

SAN DIEGO Tue May 20, 2014 8:40pm EDT

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SAN DIEGO May 20 (Reuters) - A U.S. Navy petty officer charged in a wide-ranging corruption investigation of a Singapore-based defense contractor pleaded guilty on Tuesday to conspiracy to commit bribery in a case in federal court in California, prosecutors said.

Navy Petty Officer First Class Dan Layug admitted accepting gifts of cash, electronics and luxury hotel stays in exchange for providing information on Navy ship schedules to Glenn Defense Marine Asia, the company at the center of the scandal.

Layug, 27, was stationed in Japan and worked in ship logistics when he accepted the gifts, which included payments of $1,000 a month plus expensive gadgets including iPhones and a Wii game set.

"Every service member is entrusted with the enormous responsibility of protecting this country at all costs," U.S. Attorney Laura Duffy said in a statement. "Because of his greed, Daniel Layug fell woefully short of this high calling, and this guilty plea holds him accountable for a painful betrayal."

The company's CEO, Malaysian businessman Leonard Glenn Francis, is charged in the high-profile case with plying Navy officials with cash, concert tickets, prostitutes and other gifts to win business.

The complaints against Francis allege that he directed a scheme to defraud the Navy by bribing military officials to steer ships into harbors where his company would provide ship husbandry - a range of services from cleaning, restocking and refueling to shepherding Navy personnel during their port stay.

Francis, the complaints allege, would then inflate the charges for those services and demand kickbacks from his company's subcontractors.

U.S. Navy Commander Michael Misiewicz and Navy criminal investigations special agent John Beliveau were arrested last September in the case, at the same time as Francis, and charged with conspiracy to commit bribery.

Commander Jose Luis Sanchez was arrested and charged in November with accepting prostitutes, luxury travel and $100,000 in cash from Francis. Glenn Defense executive Alex Wisidagama, of Singapore, was also charged in the scandal. He and Beliveau have since pleaded guilty.

Two other high-level Navy officers - a vice admiral and a rear admiral - have been placed on leave, and a captain was removed from the command of an assault ship in connection with the investigation, but they have not been charged.

Layug faces a maximum sentence of five years in prison followed by three years of parole and a $250,000 fine, according to the plea agreement. His sentencing is set for Sept. 2 in federal court in San Diego. (Editing by Cynthia Johnston; Editing by Ken Wills)

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