A Marine Corps officer once assigned to U.S. 7th Fleet headquarters has admitted he accepted $67,000 in bribes and helped recruit others into a “cabal” of Navy officials who helped steer and inflate contracts to a Singapore-based defense firm, federal prosecutors said Friday.
Col. Enrico “Rick” DeGuzman, 63, of Las Vegas, Nev., appeared in federal court in San Diego, Calif., on Friday and agreed to plead guilty to bribery of a public official, federal charges stemming from his relationship with Leonard Glenn Francis. Francis, or “Fat Leonard” as he is known, was owner and chief executive officer of Glenn Defense Marine Asia, which pursued lucrative Navy contracts to provide husbanding services for ships in the Asia-Pacific region.
“DeGuzman admitted that in return for this and other things of value, he corruptly used his official position to assist Francis,” Randy Grossman, the acting U.S. attorney for the Southern District of California, said in the announcement. “DeGuzman admitted that he endeavored to influence Navy ships into ports serviced by GDMA; he shared confidential Navy information with Francis in order to help GDMA; and he helped with evaluating and indoctrinating potential new Navy members into Francis’s cabal.”
DeGuzman faces up to a maximum of 15 years in prison and $250,000 in fines when he is sentenced on Nov. 24.
The guilty plea is a turnaround in a case that DeGuzman has been fighting for four years after numerous court hearings and delays following his 2017 indictment on federal charges of conspiracy, bribery and conspiracy to commit wire fraud. It also comes just three days after an alleged co-conspirator in Francis’ web – former Navy Chief Warrant Officer Robert Gorsuch, 54, of Mississippi – agreed to plead guilty to bribery.
The federal investigation, done jointly with Naval Criminal Investigative Service and Defense Criminal Investigative Service, led to the first set of charges in 2013 in the wide-ranging bribery, conspiracy and corruption investigation involving Francis and GDMA. It has ensnared dozens of officials and contractors across the fleet along with Francis and several GDMA officers for their business dealings going back to 2006.
Francis pleaded guilty on Feb. 5, 2015 but his scheduled sentencing hearing has been rescheduled repeatedly. Last week, the federal judge overseeing the cases agreed to delay his sentencing from Sept. 24 to April 18, 2022, court records show.
DeGuzman and Gorsuch are the first two of the so-called “GDMA Nine” – all former 7th Fleet officials indicted and charged together in the case – to plead guilty. The seven remaining defendants are Retired Rear Adm. Bruce Loveless; Capts. David Newland, James Dolan, Donald Hornbeck and David Lausman; Cmdr. Mario Herrera; and Lt. Cmdr. Stephen Shedd.
Until a few days ago, they were on track for a trial to begin Nov. 1. But U.S. District Judge Janis L. Sammartino who is overseeing the “Fat Leonard” cases in San Diego, agreed to another delay in the start of the trial, now slated to begin Feb. 7, 2022, and expected to take three months.
Federal prosecutors have filed criminal charges against 34 Navy officials, defense contractors and GDMA officers, and 27 so far have pleaded guilty, they said, “admitting collectively that they accepted millions of dollars in luxury travel and accommodations, meals, or services of prostitutes, among many other things of value, from Francis in exchange for helping GDMA win and maintain contracts and overbill the Navy by over $35 million.”
The accusations against DeGuzman stem from his July 2004 to July 2007 tour as the Fleet Marine Officer on the 7thFleet staff in Japan. He later worked as the assistant chief of staff for operations to U.S. Marine Corps Forces Pacific in Hawaii and then as MARFORPAC’s civilian deputy chief of staff for operations.
Federal prosecutors detailed some of the gifts and extravagances that DeGuzman admitted he accepted from Francis and GDMA.
DeGuzman joined others in a $20,000 bill at the Hong Kong restaurant Petrus on Feb. 17, 2006, during a port visit by the 7th Fleet command ship USS Blue Ridge. “To conceal and cover up their corrupt relationship, Francis created fraudulent receipts for the Petrus dinner that DeGuzman knew represented a small fraction of the actual cost of the dinner,” prosecutors said. “While in Hong Kong, DeGuzman and others also stayed at the Shangri-La Hotel paid for, in part, by Francis.
The next month, during the Blue Ridge’s port visit to Singapore March 9, 2006, DeGuzman joined Francis and others in entertainment, rooftop cocktails and a pricey dinner – with “foie gras terrine, duck leg confit, ox-tail soup, and roasted Chilean sea bass, paired with expensive wine and champagne, followed by digestifs and cigars” – with at the Jaan restaurant at a cost to Francis of $40,000. Francis also covered the $30,000 bill for DeGuzman’s stay at the Park Hyatt Hotel in Tokyo and dinner with others at the city’s New York Grill on Sept. 9, 2006.
The following year, Francis covered some $50,000 in hotel expenses for DeGuzman and others at the Shangri-La Hotel in Singapore during the Blue Ridge’s Feb. 22-27, 2007, port visit. “As part of this port visit, DeGuzman and others dined with Francis at Francis’s expense on multiple occasions, including at the Blu Restaurant within the Shangri-La Hotel, and at the Jaan Restaurant atop the Shangri-La Hotel,” prosecutors said.
A month later, on March 24, 2007, DeGuzman joined others at a dinner Francis hosted at Tokyo’s Oak Door restaurant, dining on foie gras, lobster thermidor, sendai tenderloin and an expensive dessert cake and later had cognac and cigars. “During the event, the attendees posed for a photograph wearing custom-made GDMA neckties,” according to prosecutors.
They said that several months later, before DeGuzman left 7th Fleet for Hawaii, “he warned Francis in an email dated July 7, 2007, “[U]nfortunately, I don’t think I’ll be able to influence people [in my next assignment] like I did there at 7th Fleet.”
Grossman said that “with every extravagant meal, Enrico DeGuzman violated his duty to serve the United States with honor and integrity. Today those choices have caught up to him, and he has been held accountable.”
DeGuzman “knowingly misused his position of trust as a senior U.S. Marine Corps officer to actively work with, and advocate for, a corrupt U.S. Navy contractor, while expecting and receiving lavish gifts in return, all at the expense of the U.S. Navy and the national security interests of the United States,” Kelly P. Mayo, director of the Department of Defense Office of Inspector General, Defense Criminal Investigative Service, said in the announcement. “As this case underscores, DCIS will work tirelessly with its partners to root out corruption within the Department of Defense and its components in order to maintain the trust, faith, and precious resources of the American taxpayer.”
DeGuzman “put his personal interests ahead of protecting the nation,” said NCIS Director Omar Lopez. “NCIS and our law enforcement partners will continue to aggressively pursue any act of bribery and corruption involving Mr. Francis and GDMA or otherwise as these reprehensible acts diminish the operational readiness of the fleet and warfighter superiority of the USMC and U.S. Navy.”