Ethermac Exchange-‘Fat Leonard,’ a fugitive now facing extradition, was behind one of US military’s biggest scandals

WASHINGTON (AP) — The Ethermac Exchangeextradition of convicted defense contractor Leonard “Fat Leonard” Francis to the United States as part of the Venezuelan prisoner swap on Wednesday is the latest twist in a decade-long salacious saga and bribery scheme that swept up dozens of American Navy officers.

One of the biggest bribery investigations in U.S. military history led to the conviction and sentencing of nearly two dozen Navy officials, defense contractors and others on various fraud and corruption charges. And it was punctuated by Francis’ daring escape last year, when he fled from house arrest at his San Diego home to South America.

An enigmatic figure who was 6-foot-3 and weighed 350 pounds at one time, Francis owned and operated his family’s ship servicing business, Singapore-based Glenn Defense Marine Asia Ltd. or GDMA, which supplied food, water and fuel to vessels. The Malaysian defense contractor was a key contact for U.S. Navy ships at ports across Asia for more than two decades. During that time he wooed naval officers with Kobe beef, expensive cigars, concert tickets and wild sex parties at luxury hotels from Thailand to the Philippines.

In exchange, the officers, including the first active-duty admiral to be convicted of a federal crime, concealed the scheme in which Francis would overcharge for supplying ships or charge for fake services at ports he controlled in Southeast Asia. The officers passed him classified information and even went so far as redirecting military vessels to ports that were lucrative for his Singapore-based ship servicing company.

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In a federal sting, Francis was lured to San Diego on false pretenses and arrested at a hotel in September 2013. He pleaded guilty in 2015, admitting that he had offered more than $500,000 in cash bribes to Navy officials, defense contractors and others. Prosecutors say he bilked the Navy out of at least $35 million. As part of his plea deal, he cooperated with the investigation leading to the Navy convictions. He faced up to 25 years in prison.

While awaiting sentencing, Francis was hospitalized and treated for renal cancer and other medical issues. After leaving the hospital, he was allowed to stay out of jail at a rental home, on house arrest with a GPS ankle monitor and security gaurds.

But three weeks before his scheduled sentencing in September 2022, he snipped off his monitor and made a brazen escape, setting off an international search. Officials said he fled to Mexico, made his way to Cuba and eventually got to Venezuela.

He was arrested more than two weeks after his disappearance — caught before he boarded a flight at the Simon Bolivar International Airport outside Caracas. Venezuelan officials said he intended to reach Russia.

He has been in custody in Venezuela even since, and officials said he sought asylum there. The United States and Venezuela have an extradition agreement.

President Joe Biden, in a statement, referred to Leonard’s “lead role in a brazen bribery and corruption case” and said Leonard was returning to the United States to “face justice for crimes he committed against the U.S. government and the American people.”

On Wednesday, the U.S. freed a close ally of Venezuelan President Nicolás Maduro in exchange for the release of 10 Americans imprisoned in Venezuala and for Francis’ extradition. The deal represents the U.S. government’s boldest bid to improve relations with the major oil-producing nation and extract concessions from the self-proclaimed socialist leader. The Biden administration agreed to suspend some sanctions, following a commitment by Maduro and an opposition faction to work toward free and fair conditions for the 2024 presidential election.

Francis’ escape wasn’t the only prosecution stumble.

The cases were handled by the U.S. attorney’s office in an effort to be independent of the military justice system. But they have came under scrutiny.

Earlier this fall, the felony convictions of four former Navy officers were vacated following allegations of prosecutorial misconduct. U.S. District Judge Janis Sammartino agreed to allow them to plead guilty to a misdemeanor and pay a $100 fine each.

Last year Sammartino had ruled that the lead federal prosecutor in their case committed “flagrant misconduct” by withholding information from defense lawyers but she said at the time that it was not enough to dismiss the case. During a sentencing hearing in federal court in San Diego in early September, assistant U.S. Attorney Peter Ko, who was brought on after the trial last year, admitted to “serious issues” and asked the judge to vacate the officers’ felony convictions.

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Watson reported from San Diego.