Timeline: The ‘Fat Leonard’ Case

March 16, 2017 8:41 AM - Updated: March 16, 2017 1:54 PM

The scandal embroiling Leonard “Fat Leonard” Francis’s company, Glenn Marine Defense Asia and several high-ranking U.S. Navy officers outlined in the charges in the indictment that was unsealed on March 14, 2017 that unfolded over eight years. Here is a timeline of what the government alleges.

A Conspiracy Begins
February 2006
The government’s indictments allege that the group of officers who came to call themselves, among other nicknames, “the cool kids” and “the wolf pack,” began conspiring with Francis “on the high seas” around February 2006. Among the first conspirators were Capt. David Newland, who was chief of staff of the USS Blue Ridge in 2006; Col. Enrico Deguzman, Fleet Marine Officer for U.S. 7th Fleet in 2006, Capt. Donald Hornbeck, chief of staff for operations aboard the USS Kitty Hawk; Capt. James Dolan, assistant chief of staff for logistics for 7th Fleet; Capt. Bruce Loveless, assistant chief of staff for intelligence for 7th Fleet; Capt. David Lausman, executive officer aboard the USS Abraham Lincoln; and Chief Warrant Officer Robert Gorsuch, 7th Fleet flag administration officer.

A Night in Shangri-La
Feb. 17, 2006
One of the first recorded incidents alleged in the indictment was a port call of USS Blue Ridge in Hong Kong, where David Newland, Enrico Deguzman and Robert Gorsuch racked up a $20,435 tab at the Island Shangri-La resort. Francis paid the bill, then allegedly created a fake receipt for a much smaller amount to cover the group’s tracks.

Tit for Tat
March 8-9, 2006
Francis emailed his employee (and former Navy lieutenant commander on the USS Blue Ridge) Edmond Aruffo and Newland at non-Navy email addresses under fake names asking them to write “bravo zulu” memos complimenting his company. Newland wrote back, “can do easy!” and signed the requested memo on March 9.

On A Helipad in Singapore
March 9, 2006
USS Blue Ridge made a port call in Singapore, where “the cool kids” enjoyed cocktails on a roof helipad, then enjoy foie gras, Hennessy Private Reserve and Cohiba cigars at Francis’ expense at the Jaan Restaurant.

Turning a Few Ships
April 4, 2006
Francis emailed Hornbeck asking him to convince other Navy officials to send USS Abraham Lincoln to Laem Chabang, Thailand, where GDMA would be hired for dockside services. Francis sent follow-up emails to Newland asking him to convince officials to make sure the rest of the strike group accompanied the carrier to the same port. On April 26, Lincoln and all three escort ships all docked in Laem Chabang, and GDMA was awarded nearly $2 million in contracts to service them.

Lausman Enters Picture
May 2006
David Lausman became the assistant chief of staff for operations for the commander of Naval forces Japan.

…And a Few More
May 2-3, 2006
Newland sent emails to Francis advising him that an amphibious strike group and the Ronald Reagan Carrier Strike Group were also being directed to Laem Chabang.

Wetting Down, On the House
July 26, 2006
Hornbeck asked Francis to pick up the tab for his “wetting down” party after being promoted to captain. Francis agreed, and paid for Hornbeck and 75 guests at the Raffles hotel in Singapore.

A Room with a View
Oct. 27, 2006 – Feb. 5, 2007
Francis and Newland exchanged a series of emails about convincing other Navy officials to let USS Blue Ridge dock in Hong Kong, which would give GDMA another contract. Newland described his efforts to override a supply officer’s opposition to the docking location, and asked Francis to arrange for a hotel room at the Shangri-La with a harbor view for him and his wife. Blue Ridge ended up docking in Hong Kong for three days in February, during which Francis paid for a seven-course dinner for several 7th Fleet officers and their wives.

Shedd Joins ‘Cool Kids’
November 2006
Lt. Cmdr. Stephen Shedd becomes 7th Fleet’s South Asia Policy and Planning Officer. Part of his job was to identify ports where Navy ships could make calls.

Settling a Complaint
Jan. 8-22, 2007
After a GDMA competitor lodged a bid protest, Francis and Newland exchanged a series of emails in which Newland promised to pressure fiscal officers in Yokosuka to vacate the resulting contract suspension. The Government Accountability Office ended up ruling in GDMA’s favor and awarding them the contract.

A Stay in the MacArthur Suite
Feb. 8-10, 2007
To celebrate GDMA being awarded a husbanding contract in the Philippines, Francis hosted his co-conspirators in the Manila Hotel’s Macarthur Suite, where, according to the hotel’s website, General Douglas MacArthur stayed during his tenure as a military advisor to the Philippines between 1935 and 1941. According to the indictment, “historical memorabilia related to General Douglas MacArthur were used by the [party] participants in sexual acts.”

A Heck of a Month
Feb. 11-26, 2007
Over the course of less than a month, Francis paid for Newland, Deguzman and Gorsuch to stay at expensive hotels and eat at Michelin-starred restaurants in Cebu and Singapore, and paid sex workers to service several Navy officers, including Newland.

Lausman Out to Sea
March 2007
Lausman becomes commanding officer of USS Blue Ridge.

Herrera Looped In
March 2007
Cmdr. Mario Herrera became Fleet Operations and Schedules Officer for 7th Fleet under Hornbeck.

‘Damage Control the Glenn Marine Way’
A State Department official complained about an incident involving GDMA personnel during a USS Blue Ridge port visit in the Philippines. Deguzman forwarded the complaint to Francis and advised “some quick damage control the Glenn Marine way to minimize.” Deguzman wrote separately to US officials blaming Filipino personnel for the incident instead of the GDMA officials.

Ties that Bind
March 24, 2007
Francis treated Newland, Deguzman and Hornbeck to a dinner of foie gras, lobster and Sendai tenderloin at the Oak Door in Tokyo. The evening rounded out with cognac and cigars, and the officers posed for a photo afterwards with gifts from Francis: a set of custom-made GDMA ties.

Something Fishy
March 26-May 14, 2007
Francis enlisted Deguzman to try to recruit a fiscal officer — whose name is redacted from the indictment — into the corruption ring. Deguzman’s wife agreed to be Francis’ “PR manager,” and the group’s “shaping operations” included providing gifts of tuna.

The Competition
April 7-17, 2007
Deguzman passed Francis information about a competitor in the Philippines that had allegedly overcharged the Navy. Francis sent the information in turn to the NCIS in the Philippines.

Kudos for Hotels
May 29, 2007
Francis sent Deguzman a series of “bravo zulu” letters commending his company, which Deguzman promised to sign. In the same email Deguzman wrote, “Can I propose the Shangri-La or the Peninsula [Hotel]”

Dinner for Data
June 14-18, 2007
During a port visit of USS Blue Ridge in Sydney, Australia, Francis paid over $10,000 for Newland, Deguzman, Lausman and Gorsuch to stay in the Shangri-La Hotel there, and paid nearly another $10,000 for a lavish dinner at the hotel restaurant. During the dinner, Gorsuch gave Francis digital copies of classified upcoming port visits for a number of American Navy ships.

Cool Kids Get on Cooltoad
June 22, 2007
Gorsuch signed up for an email account under a pseudonym on cooltoad.com, then emailed the other co-conspirators that the military couldn’t monitor the account, and “best of all it can be accessed from the ship.”

New Recruit to ‘Fine Dining’
July 3, 2007
The “cool kids” emailed each other to discuss the handover of 7th Fleet to a new commander. Aruffo planned to have Newland and the new commander attend dinner together in Tokyo in an effort to bring him into the bribery scheme. Gorsuch wrote to Francis that the new commander seemed to be “a great guy, easy going, but will need to be eased into fine dining, etc.”

Info Continues to Flow
July 22-Sept. 1, 2007
Francis asked for help making sure the USS Kitty Hawk made a port call in Port Klang, for which GDMA received another contract worth about $2 million. The officers continued to pass new classified information on ship movements to Francis.

Francis’ Inside Men
Nov. 29-Dec. 16, 2007
Francis enlisted the Navy officers’ help seeking “cancellation payment” over a USS Kitty Hawk port call to Hong Kong that was canceled for diplomatic reasons, and to settle a billing dispute involving the USS Chicago and USS Connecticut.

Nice Watch
December 2007
Francis dropped $5,000 on dinner for Loveless, Shedd, and unnamed others in Sinagpore, and gave Shedd and his wife Ulysse Nardin watches worth $25,000

More Data, More Dinners
January 2008
Shedd emailed Francis classified documents and described planned US ship movements in messages. Over roughly the same time period, Francis paid for meals and hotels in Tokyo and sent officers cigars and fine wine.

‘Max Discretion’
Jan. 25-29, 2008
The “cool kids” seemed to be increasingly worried about being discovered. Shedd requested Francis book him a room at the Marriott in Wanchai because it was “not too opulent,” and agreed to “keep this dinner on the los side” in light of the need for “max discretion.” The bill for their meal at Petrus Restaurant on Jan. 29, which included truffle soup and caviar, came to $18,371.

Passing On Invoices
Feb. 17, 2008
Francis emailed Shedd to request proprietary invoice information from GDMA competitors in Vietnam, Cambodia, Honiara, Saipan, Palau, Tahiti, Comoros, Madagascar, Seychelles, Mauritius and Guam to help GDMA write upcoming solicitations.

One Night in Bangkok
May 2-3, 2008
Francis paid for Dolan, Hornbeck, Loveless and Shedd to stay one night at the Conrad Hotel in Bangkok, and paid for “numerous” sex workers to service them. In a subsequent email, Shedd emailed Francis that the officers “were all smiles on the drive home over their ‘one night in Bangkok,'” presumably a reference to the 1984 song by Murray Head.

Port Call in Singapore
May 6-9, 2008
During a USS Blue Ridge port call in Singapore, Francis bought dinner on at least two occasions for Dolan, Hornbeck, Lausman and Loveless, and paid sex workers to entertain them afterward. Hornbeck wrote to Francis the following day thanking him for hiring a sex worker Hornbeck referred to as “My new Mongolian Friend,” and Francis called “Hot Mongolian [B]arbeque Ribs.”

Family Vacation
May 4-14, 2008
Francis paid for family vacations for Shedd and Lausman in Singapore and Malaysia, including travel and hotels. The Shedd family’s stay alone cost about $30,000. During the vacation, Shedd emailed Francis more classified ship schedules and discussed plans to bring the new head of 7th Fleet into the scheme.

The Rager
May 22-25, 2008
During a USS Blue Ridge port visit in Manila, Francis hosted what prosecutors described as “a raging multi-day party, with a rotating carousel of prostitutes in attendance, during which the conspirators drank all of the Dom Perignon available at the Shangri-La [Hotel].” The hotel bill, not including sex workers, came to more than $50,000.

Port Call in Vladivostok
June 7-July 5, 2008
Lausman threatened to hold another officer who hired a GDMA competitor “personally responsible” for any problems with a port visit in Vladivostok, Russia. After Lausman and Dolan leaned on other Navy officials, GDMA was awarded a one-time contract to support the port visit instead.

‘Don’s Pet’
July 21-23, 2008
Francis, Shedd and Hornbeck shared over email and discussed nude pictures of sex workers that had been at the party in Manila. Shedd referred to the woman as “Don’s pet.”

International Effort
Aug. 20, 2008
An Australian officer referred to as “AG” in the indictment began emailing the group from another cooltoad.com account, providing more classified information about ship movements.

Leaked JAG Report
Sept. 18, 2008
Shedd emailed Francis an internal Navy JAG memo about improper payment of excessive port fees, and in the same email asked Francis about a “Boys night out.”

A New Toad
Sept. 23, 2008
Cmdr. Jose Luis Sanchez joined the conspiracy and began emailing Francis from a cooltoad.com account under the alias Troy Smith. Sanchez was 7th Fleet’s deputy logistics officer.

‘Big Trouble’
Oct. 15-16, 2008
After Shedd was transferred to Tennessee, he sent a panicked email to Francis saying, “I’ve got about 10 days before I’m in big trouble and I really, really appreciate your assistance,” then providing his account information for a wire transfer. In return he promised to “get you [Francis] whatever information you need.” In response, Francis demanded the plan for ship visits to the Pacific Islands for 2009, which he required to be delivered by the following day. The Australian officer sent Francis the requested information within hours.

On the Market
Oct. 19, 2008 – June 26, 2009
Deguzman and Francis communicated over the course of several months about opening up a position for Deguzman at GDMA after his retirement from the Marines. By mid-2009, plans seemed to be set for Deguzman to join GDMA in 2010 as their husbanding agent for the Navy.

Shedd Chopped Out
November, 2008
Francis wrote to Sanchez demanding ship schedules, complaining that “since Steve [Shedd] chopped out I have been kept blind on sceds and comms.” Francis and Sanchez wrote to each other throughout the month about an impending USS Blue Ridge port visit in Hong Kong, including sharing pictures of sex workers Francis agreed to hire.

Nov. 25-29, 2008
Francis, Dolan, Herrera, Sanchez and the Australian officer stayed at the Shangri-La in Kowloon at Francis’ expense. Francis also paid to transport sex workers from Manila to Kowloon for the men. The total cost for the party was around $55,000. Afterward, Sanchez described his activities to Kowloon in detail in emails to Francis, and referred to plans to for projects involving the Coast Guard, NATO and Canadian forces.

Personnel Report
Dec. 11, 2008-Jan. 15, 2010
Shedd began sending Francis monthly rosters of Navy flag officers, and continued to send them regularly into 2010. Francis would also ask Shedd to describe the personalities of officers nominated for high-level positions.

CARAT Controversy
Jan. 7-8, 2009
Sanchez, Dolan and Deguzman passed Francis internal information about plans to separate ship husbanding contracts for a Cooperation Afloat Readiness and Training exercise, which would exclude GDMA as a contractor. The officers promised to put pressure on other Navy officials to abandon the planned changes.

List of Demands
Feb. 19-22, 2009
During a USS Blue Ridge port visit to Manila, Francis paid for Dolan, Sanchez and Herrera’s hotel bill to the tune of $30,000, and footed the bill for their meals, drinks and sex workers. Sanchez emailed Francis with a list of the names of sex workers he and Dolan wanted Francis to hire.

More Info
March-June 2009
Sanchez continued to regularly send Francis classified ship movement plans.

Port Stays in Phuket
July 26-29, 2009
Sanchez and Herrera told Francis they would pressure other Navy officials to arrange port visits in Thailand for USS Abraham Lincoln and USS Reagan. Reagan visited Phuket, costing the Navy $1.5 million.

Port Klang
Aug. 28, 2009
Francis purchased the Port Klang Star Cruise Port and Terminal in Malaysia.

InfoSec Fail
Sept. 13, 2009
The cooltoad.com network became temporarily inaccessible on USS Blue Ridge, prompting the group to move their communications to Facebook and Hotmail.

Needs Work
Dec. 9, 2009
Newland emailed Francis asking for a job in Asia.

Two Vacations
July 19-Aug. 5, 2010
Francis loops in Capt. Daniel Dusek, at the time deputy director of operations for 7th Fleet, into the conspiracy, first paying for a hotel room for the captain and his family in Waikiki, Hawaii, and in August paying for a hotel room and a sex worker for Dusek in the Philippines. In return, Dusek agreed to convince other officers to direct the Abraham Lincoln Carrier Strike Group to the new GDMA property in Port Klang.

Bearing Gifts
Oct. 6-Dec. 9, 2010
GDMA sent Lausman a pair of “elephant bowls” from Thailand, an iPad and flowers for his wife and boxes of steaks.

Another Job-Hunter
Feb. 12, 2011
Hornbeck asked Francis for a job. Francis replied, however, that he couldn’t expand the company’s naval support arm because of the Navy’s cost-cutting measures, but agreed to keep Hornbeck in mind in the future.

In the Bag
Nov. 11-14, 2011
Francis gave Lausman’s wife a Versace purse he bought for more than $8,000. Lausman’s wife emailed Aruffo after receiving it and said some of the letters had fallen off. Aruffo advised her to have her husband give it to another GDMA employee to have it replaced. The GDMA employee wrote to Francis that Versace “sent their apologies.”

Shedd Back at Sea
Jan. 31, 2012
Shedd emailed Francis from a new cooltoad.com account letting him know the USS Milius, on which Shedd was now the executive, would have a port call in Port Klang.

Lausman Out
Aug. 11, 2012
Lausman departed command of USS George Washington at a ceremony in Yokosuka, Japan. Francis gave Lausman a parting gift of a $2,000 fountain pen.

Sept. 2013
Francis was arrested in a sting at a San Diego hotel.

Burn Bag
Sept. 16, 2013
In an interview with NCIS and DCIS agents, Lausman denied that GDMA ever paid for his hotel room, then destroyed a hard drive he had kept from USS George Washington that contained classified information.

Cleaning House
Sept. 17, 2013
Dusek deleted the contents of his email account to try to cover his role in the conspiracy.

Dusek Arrested
Oct. 2, 2013
Dusek was relieved of his command of USS Bonhomme Richard and arrested.

Fat Leonard pleas out
Jan. 2, 2015
Leonard Francis pleads guilty to all charges in a San Diego court, facing a possible prison sentence of 25 years. Dusek pled guilty on the same day.

Sanchez Sentenced
April 29, 2016
Sanchez was sentenced to 78 years in prison for sending Francis classified information.

Admiral Charged
June 6, 2016
Navy Rear Adm. Robert Gilbeau, who was a supply officer on several ships in 7th Fleet over the course of the conspiracy, was charged.

More Indictments
March 14, 2017
The latest round of indictments was unsealed with a filing in the US District Court Southern District of California, providing 72 pages of detail.

Cid Standifer

Cid Standifer is a freelance reporter, web designer and translator. She has written for Stars and Stripes, Military Times, Inside Washington Publishers and the Roswell Daily Record.

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