Retired Navy commander pleads guilty to fraud

HONOLULU – A retired U.S. Navy commander in Hawaii charged in a growing corruption scandal pleaded guilty Tuesday to lying about his relationship with a Malaysian defence contractor known by the nickname “Fat Leonard.”

As part of a deal with federal prosecutors, David Kapaun entered the plea to a count of fraud and false statements in federal court in Honolulu involving his relationship with Leonard Francis, who prosecutors describe as “the centre of a colossal bribery and fraud scandal.”

Kapaun said in court that he omitted Francis from a security clearance update form because he knew “I did have a past association with him that was unfavourable.”

He also didn’t disclose receiving dinners, hotel stays and prostitutes from Francis, said his defence attorney, Victor Bakke.

Francis has acknowledged bribing Navy officials with cash, prostitutes and other gifts in exchange for classified information to help his company, Singapore-based Glenn Defence Marine Asia. The company provided services such as trash and sewage removal, food, water, security and fuel to U.S. Navy ships, according to prosecutors. He’s awaiting sentencing.

“He played a minor role in the overall scheme that was conducted by Fat Leonard,” Bakke said of Kapaun. “He’s remorseful. He realizes he should have used better judgment. But just like the number of other Naval officers that are involved in this case, he was seduced by this guy.”

Twenty-one current and former Navy officials have been charged so far in the scandal. Kapaun is the 11th to plead guilty.

The allegations prompted Kapaun to resign earlier this year from his civilian position as deputy chief of staff for U.S. Special Operations Command Pacific.

Kapaun could face up to five years in federal prison when he’s sentenced on Sept. 11. The terms of his plea agreement will require Kapaun to pay $50,000 restitution and a $25,000 fine, Bakke said.

Kapaun retired and was honourably discharged in 2008 after a 25-year Navy career, Bakke said.

“Even though he’s retired, they could pull him back to active duty and court-martial him if they wanted to,” Bakke said.