Assistant U.S. Attorneys Mark W. Pletcher (619) 546-9714 and Patrick Hovakimian (619) 546-9718

NEWS RELEASE SUMMARY – February 16, 2017

SAN DIEGO – U.S. Navy Commander Mario Herrera was charged in a complaint unsealed today with accepting prostitutes, luxury travel, elaborate dinners and $1,800 steaks from foreign defense contractor Leonard Glenn Francis in exchange for classified and internal U.S. Navy information.

Herrera, the 12th U.S. Navy official to be charged so far, was arrested in San Antonio, Texas this morning and is scheduled to make his initial appearance in federal court in the Western District of Texas. The United States will seek removal of Herrera to San Diego to face charges.

According to the complaint, Herrera received bribes in return for sending U.S. Navy ship schedules and other proprietary information to Francis, sometimes through U.S. Navy Commander Jose Luis Sanchez, who was among the first officers charged in the massive bribery and fraud case in 2013. Sanchez pleaded guilty to bribery charges in January 2015 and awaits sentencing.

Hererra, Sanchez and other U.S. Navy 7th Fleet officers who were committed to doing the bidding of Francis in exchange for prostitutes and other perks called themselves the “Band of Brothers” and the “Wolf Pack,” the complaint said. In one email, Sanchez asked Francis to send pictures of prostitutes, saying “the brothers are ready to indulge.” A few days later in another email, Sanchez thanked Francis for the prostitutes and hotel accommodations during a port stop in Manila, Philippines: “A warm thank you from the brotherhood…we thoroughly enjoyed ourselves and had a great time.”

The complaint also alleges that Herrera made recommendations within the Navy to benefit Francis’ company, Glenn Defense Marine Asia, including on several occasions manipulating the movement of U.S. Navy ships and diverting them to ports financially lucrative to Francis. GDMA is a multinational corporation and longtime government contractor based in Singapore, which provides hundreds of millions of dollars of “husbanding” services for the U.S. Navy in at least a dozen countries throughout the Pacific. Husbanding involves supplying food, water, fuel, tugboats and fenders, security, transportation, trash and liquid waste removal, and other goods and services to ships and submarines in foreign ports.

So far, a total of 17 named individual defendants have been charged in connection with the GDMA corruption and fraud investigation. Of those, 12 are current or former U.S. Navy officials, including Herrera, Sanchez, Admiral Robert Gilbeau, believed to be the first active-duty U.S. Navy flag officer charged in a federal criminal case; Captain (ret.) Michael Brooks; Captain Daniel Dusek; Commander Michael Misiewicz; Commander Bobby Pitts; Lt. Commander Gentry Debord; Lt. Commander Todd Malaki; Petty Officer First Class Daniel Layug; Naval Criminal Investigative Service Supervisory Special Agent John Beliveau; and Paul Simpkins, a former DoD civilian employee, who oversaw contracting in Singapore.

Gilbeau, Brooks, Dusek, Misiewicz, Sanchez, Debord, Malaki, Layug, Beliveau, and Simpkins have pleaded guilty. On Jan. 21, 2016, Layug was sentenced to 27 months in prison and a $15,000 fine; on Jan. 29, 2016, Malaki was sentenced to 40 months in prison and to pay $15,000 in restitution to the Navy and a $15,000 fine. On March 25, 2016, Dusek was sentenced to 46 months in prison and to pay $30,000 in restitution to the Navy and a $70,000 fine; and on April 29, 2016, Misiewicz was sentenced to 78 months in prison and to pay a fine of $100,000 and to pay $95,000 in restitution to the Navy. Beliveau was sentenced on October 14, 2016 to 12 years in prison and to pay $20 million in restitution; Simpkins was sentenced on December 2, 2016 to 72 months in prison; Gilbeau, Brooks, and Sanchez await sentencing.

Pitts was charged in May 2016 and his case is pending.

Also charged are five GDMA executives – Francis, Alex Wisidagama, Ed Aruffo, Neil Peterson and Linda Raja. Three have pleaded guilty; Wisidagama was sentenced on March 18, 2016 to 63 months and $34.8 million in restitution to the Navy. Francis and Aruffo await sentencing; Peterson and Raja were extradited from Singapore in September 2016 and their cases are pending.

The Defense Criminal Investigative Service, Naval Criminal Investigative Service, and the Defense Contract Audit Agency are investigating. Assistant U.S. Attorneys Mark W. Pletcher and Patrick Hovakimian of the Southern District of California and Assistant Chief Brian R. Young of the Criminal Division’s Fraud Section are prosecuting the case.

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.

DEFENDANT Case Number: 17mj0424

Lieutenant Commander Mario Herrera Age 48 Helotes, Texas

SUMMARY OF CHARGES

Conspiracy to Commit Bribery, in violation of 18 U.S.C. § 371

Maximum Penalty: 5 years in prison, a $250,000 fine,

INVESTIGATING AGENCIES

Defense Criminal Investigative Service

Naval Criminal Investigative Service

Defense Contract Audit Agency