Affidavit in case vs. Leonard Francis and Jose Luis Sanchez

UNITED STATES DISTRICT COURT
J

SOUTHERN DISTRICT OF CALIFORNIA

6
7

UNITED STATES OF AMERICA,

8

Plaintiff,

9

Case No.:

v.

10
LEONARD GLENN FRANCIS (1),
l l and JOSE LUIS SANCHEZ (2),
12
Defendants.
13

COMPLAINT

402

Title 18, U.S.C., Sec. 371 - Conspiracy to
Commit Bribery

14

The undersigned complainant being duly sworn states:

15

Beginning no later than on or about January 2009, and continuing up to

16 September 2013, defendants LEONARD GLENN FRANCIS and JOSE LUIS
17 SANCHEZ, and others, did knowingly and unlawfully conspire to commit bribery, in
18 violation of Title 18, United States Code, Section 201 (b)(1 )(C), with such offense
19 begun or committed outside any particular district; all in violation of Title 18, U.S.
2 Code, Section 3 71.

°

21
22
23
24

The complainant states that this complaint is based on the attached statement of
facts, which is incorporated herein by referen~~.r·J

,

,,. /;

/~

t ~c,$~~~

?fumes McWhirter, Special Agent, DCIS

25 SWORN TO BEFORE ME AND SUBSCRIBED IN MY PRESENCE, THIS_!_ DAY
OF NOVEMBER, 2013
26
27
28

AFFIDAVIT IN SUPPORT OF CRIMINAL COMPLAINT

I, James McWhirter, being duly sworn, hereby depose and state as follows:
AFFIANT
1.

I am a Special Agent with the Department of Defense, Office oflnspector

General, Defense Criminal Investigative Service ("DCIS"), Long Beach Resident Agency. I
have been so employed since May 2009. Prior to my employment with DCIS, I was a special
agent with the U.S Postal Service Office oflnspector General for approximately two years and
prior to that a special agent with the U.S. Army Criminal Investigation Command for
approximately 10 years. In addition to my law enforcement experience, I was employed for
approximately 9 years as an auditor for the Defense Contract Audit Agency. I have received
specialized training in the investigation of various financial and white collar crimes and I have
personally conducted or assisted in the investigation of violations of U.S. law to include bribery,
kickbacks, public corruption, conspiracy, theft, money laundering, conflicts of interest, mail
fraud and anti-trust violations. I have prepared numerous affidavits to support the establishment
of probable cause for search and arrest warrants. I am familiar with the facts set forth below
based upon my own investigative findings and conversations with other participating law
enforcement agents.
INTRODUCTION

2.

In conjunction with the United States Department of Justice ("DOJ''), the Naval

Criminal Investigative Service ("NCIS"), the Defense Contract Audit Agency ("DCAA"), and
colleagues from DCIS, I have been investigating, among other allegations, fraud and bribery
allegations involving LEONARD GLENN FRANCIS ("FRANCIS") and his company, Glenn
Defense Marine (Asia) ("GDMA"), which acts as a general contractor to the United States Navy.

As part of this investigation, agents are examining whether FRANCIS and GDMA committed
fraudulent practices in the performance and billing of GDMA's contract to perform services to
the U.S. Navy; whether things of value were improperly given to various U.S. Navy and other
government personnel by FRANCIS and GDMA; and whether FRANCIS, GDMA, U.S. Navy
and other government personnel have obstructed justice.
3.

Based on the facts as set forth below in this affidavit, I respectfully submit that

there is probable cause to believe that FRANCIS, a Malaysian citizen who lives in Singapore,
and United States Navy Commander JOSE LUIS SANCHEZ ("SANCHEZ"), have conspired to
commit bribery, in violation of 18 U.S.C. § 371. Specifically, as set forth below, there is
probable cause to believe that to promote and protect GDMA's business, FRANCIS agreed with
SANCHEZ to make, and facilitate the making of the payment of things of value, including travel
expenses, entertainment, and prostitutes, to SANCHEZ in return for him violating his official
and lawful duties by transmitting classified information to a person not entitled to receive it, and
making unauthorized disclosures of proprietary, internal U.S. Navy information, and to influence
SANCHEZ in the performance of his official acts, including recommending where U.S. Navy
ships came to port and where government personnel should be assigned.
4.

As defined by 18 U.S.C. § 3238, this offense was begun and committed on the

High Seas and otherwise out of the jurisdiction of any particular district, and thus, venue is
proper for this offense in the Southern District of California, as the District in which one or more
joint offenders, namely FRANCIS, will be arrested in connection with this offense.
5.

This affidavit is intended to demonstrate that there is probable cause to charge

FRANCIS and SANCHEZ and does not set forth all of my knowledge about this matter. The
2

facts set forth in this affidavit are based upon my training and experience as well as my, and
members of the investigations', personal observations; review of documents; interviews of
witnesses; and review of physical evidence obtained during the course of this investigation. The
documents obtained and reviewed include documents from the U.S. Navy submitted by or
pertaining to GDMA; emails and email account information from U.S.-based email service
providers, specifically including email accounts issued to FRANCIS, SANCHEZ, and other
persons associated with the matters under investigation; information from U.S.-based credit
reports, bank account and credit card information; internal GDMA documents and emails; and
telephone records.

BACKGROUND
6.

The U.S. Navy is a branch of the U.S. Department of Defense, whose mission is

to maintain, train, and equip combat-ready naval forces capable of winning wars, deterring
aggression, and maintaining freedom of the seas. The U.S. Navy Naval Supply Systems
Command ("NA VSUP") is a command within the U.S. Navy, which is responsible for the global
supply and delivery of goods and services to U.S. Navy personnel and warfighting assets. The
U.S. Navy Fleet Logistics Commands ("FLC") are subordinate commands of NAVSUP located
in various domestic and foreign locations and they provide logistics support for all naval
installations and vessels operating in each location's area ofresponsibility. In particular, the
NAVSUP FLCs are responsible for the soliciting, awarding, and overseeing contracts awarded to
entities for goods and services required by the U.S. Navy in each specific FLC's area of
responsibility. NAVSUP FLC in Yokosuka, Japan ("FLC Yokosuka") supports naval
installations and vessels operating in Japan, Hong Kong, South Korea, and Russia. FLC
3

Yokosuka also oversees the operations of a Detachment in Singapore ("FLC Singapore"), which
supports naval installations and vessels in foreign countries, including Singapore, Indonesia, the
Philippines, Thailand, Cambodia, Vietnam, Australia, and elsewhere.
7.

GDMA is a multi-national corporation with headquarters in Singapore and

operating locations in other countries, including Japan, Singapore, Thailand, Malaysia, Korea,
India, Hong Kong, Indonesia, Australia, Philippines, Sri Lanka, and the United States. GDMA is
owned and controlled by Leonard FRANCIS, who is the Chief Executive Officer/President of
GDMA, and who oversees the daily business and operations of the company. FRANCIS is
assisted by a core management team, consisting of persons known to the investigation and
identified here by initials: HP, Vice President Worldwide Contracts; NP, Vice President Global
Operations; and AW, General Manager Global Government Contracts. GDMA also employs
Country Managers for each of its operating locations in foreign countries.
8.

GDMA is a commercial and government contractor whose main business involves

the "husbanding" of marine vessels, and as such, GDMA is known as a "husbanding service
provider" ("HSP"). "Husbanding" involves the coordinating, scheduling, and direct and indirect
procurement of items and services required by ships and submarines when they arrive at port.
Examples of items and services required by ships and submarines when in port include tugboats,
fenders, port authority/custom fees, security, provisions (food), fuel, water, trash removal,
collection holding and transfer of liquid waste ("CHT"), transportation, and many others.
9.

Many of these items and services are supplied by lower tier subcontractors;

however, GDMA does own a vast array of assets, including tug boats; water, trash, and CHT

4

barges; docking equipment; small vessels for patrol (i.e. picket boats); passenger shuttles;
security barriers; and other miscellaneous equipment it uses to fulfill husbanding requirements.
10.

GDMA has been husbanding vessels for the U.S. Navy for over 25 years. In or

about June 2011, NAVSUP awarded GDMA three regional contracts to provide husbanding
services to U.S. ships and submarines at ports throughout Southeast Asia (Region 2), Australia
and the Pacific Isles (Region 3), and East Asia (Region 4). The Region 4 contract is managed by
FLC Yokosuka, and the Region 2 and Region 3 contracts are managed by FLC Singapore. These
contracts involve substantial sums of money. By way of example, the Region 2 contract was
structured as a first year base value of $25 million, which the U.S. Navy could opt to extend for
up to four additional years, for a total base value of $125 million. Within each region, certain
ports are more lucrative to GDMA than others. According to GDMA correspondence which I
have reviewed, FRANCIS and GDMA employees referred to these ports as "Pearl Ports."
11.

JOSE LUIS SANCHEZ is a Commander in the U.S. Navy who has been stationed

at U.S. Central Command in Tampa, Florida, since about April 30, 2013. From about May 2012
until his April 2013 transfer, SANCHEZ served as the Executive Officer for the Commanding
Officer at FLC Yokosuka. In that position, SANCHEZ was involved in all the operational and
administrative efforts performed by personnel within FLC Yokosuka and FLC Singapore. From
about July 2010 until about May 2012, SANCHEZ was the Director of Operations for FLC
Singapore, where he was responsible for operational and administrative efforts regarding ship
movements and other operations. From about April 2008 to April 2010, SANCHEZ was the
Deputy Logistics Officer for the Commander of the U.S. Navy Seventh Fleet ("C7F") in
Yokosuka, Japan. The Seventh Fleet's area of operations encompasses more than 48 million
5

square miles, from the Kuril Islands in the north to the Antarctic in the south, and from the
International Date Line to the 68th meridian east, which runs down from the India-Pakistan
border. As Deputy Logistics Officer, SANCHEZ was responsible for assuring that all Seventh
Fleet ships received the supplies and services needed to maintain readiness. From about late
2006 to about April 2008, SANCHEZ was a contracting officer with the U.S. Navy Air
Command, responsible for procuring goods and services required for several U.S. Navy aviation
programs. SANCHEZ began his career as a Naval Officer in about 2002, as a Supply Officer
aboard U.S. Navy ships in the Seventh Fleet. In that capacity, SANCHEZ was responsible for
coordinating with husbanding service providers to assure that the ship scheduled and received all
. requested supplies and services while the ship visited a foreign port. At all times relevant to this
affidavit, SANCHEZ was a public official within the meaning of 18 U.S.C. § 201(a). It was a
violation of SANCHEZ's official and lawful duties to: (a) transmit information that the Navy
had classified as "Confidential" or "Secret" to any person not entitled to receive it; and (b) make
unauthorized disclosure of proprietary, internal U.S. Navy information.
12.

A person known to the investigation, identified here as "EA," is a U.S. citizen

currently living in San Diego, CA. EA served as an Officer in the U.S. Navy with his last
assignment in 2007 as the Force Protection Officer for the USS Blue Ridge, the flagship for C7F.
In 2009, EA was hired by GDMA to be the General Manager for Japan, where he worked until
January 2012. As the GDMA Japan General Manger, EA had responsibility over the GDMA
husbanding services in Japanese ports, including Tokyo, Hakata, and Osaka.

II
II
6

PROBABLE CAUSE TO BELIEVE THAT A CRIME HAS BEEN COMMITTED

13.

Starting when SANCHEZ was the Deputy Logistics Officer for the Commander

of the U.S. Navy Seventh Fleet in Yokosuka, Japan, until he transferred to Florida in April 2013,
FRANCIS gave SANCHEZ a total of over $100,000 in cash, as well as travel expenses and
prostitutes, in exchange for SANCHEZ providing FRANCIS with internal U.S. Navy
information, some of which was classified, and for official acts, as set forth below.
14.

FRANCIS is the subscriber for the email account

"Leonard.Glenn.Francis@gmail.com," and SANCHEZ is the subscriber for the accounts
"jose.sanchez@fe.navy.mil," jsanchez_90@hotmail.com, and navy94@cooltoad.com."
FRANCIS often used the initials "LK," an abbreviation for "Lion King," to sign his emails, and
SANCHEZ often signed his emails using the initial "J," an abbreviation for Jose. SANCHEZ
also addressed FRANCIS as "Lion King" and "Boss" in emails.
15.

SANCHEZ created a Facebook account in the name of Troy Smith which he used

almost exclusively to communicate with FRANCIS. As set forth below, SANCHEZ regularly
sent information that the Navy had classified, and proprietary, internal U.S. Navy information to
FRANCIS, usually by forwarding the information from SANCHEZ's government email to one
of his private email accounts or to Facebook, and from there sending the information on to
FRANCIS.
16.

From January 2009 through October 2009, SANCHEZ provided FRANCIS with

classified and/or U.S. Navy proprietary internal information about U.S. Navy ship schedules, and
husbanding issues that could affect GDMA, in violation of SANCHEZ's official and lawful
duties, as follows:

7

a. On January 15 and 16, 2009, SANCHEZ sent FRANCIS emails including
those entitled "UPDATES 1of3" and "UPDATES 3 of3." FRANCIS forwarded these to
GDMA Vice President NP, with their scanned attachments listing ship schedules and upcoming
port visits. The attachments to UPDATES 3of3 were marked "SECRET," referring to their
official classification by the Navy. UPDATES 1 of 3 included ship movements and schedules
for "replenishment at sea," marked and classified as "C//REL AUS" (meaning classified as
"Confidential," but releasable to Australia).
b. On January 17, 2009, SANCHEZ sent FRANCIS a scanned copy of a
schedule for Navy submarines marked "SECRET//NOFORN" (meaning classified as "Secret,"
not releasable to foreign nationals).
c. On September 14, 2009, SANCHEZ sent FRANCIS a message on Facebook
enclosing a copy of ship schedules, classified as "Confidential."
d. On September 16, 2009, SANCHEZ sent FRANCIS a message on Facebook
enclosing a copy of ship schedules, classified as "Confidential."
e. On October 6, 2009, SANCHEZ sent FRANCIS a message on Facebook
enclosing a copy of ship schedules, classified as "Confidential."
f. On October 16, 2009, SANCHEZ sent FRANCIS two Facebook messages
alerting him about U.S. Navy concerns about $111,000 in GDMA charges for force protection
for a U.S. Navy ship visit to Port Klang, Malaysia, one of the "Pearl Ports" for GDMA. The
second email from SANCHEZ concluded: "Will call tonight to discuss."
17.

Also on October 16, 2009, SANCHEZ and FRANCIS discussed the number of

rooms needed for the "wolf pack," consisting of SANCHEZ and other U.S. Navy personnel, for
a visit to Kuala Lumpur and Singapore evidently scheduled for later that month. SANCHEZ also
8

asked for pictures for "motivation." FRANCIS replied: "J, got it we will hook up after the
FLAG dinner, will arrange a nest for you guys and some birds [women]." On October 19, 2009,
SANCHEZ sent a Facebook message to FRANCIS saying "Yummy ... daddy like." In an
October 23, 2009 Facebook message, SANCHEZ asked FRANCIS "Where r we staying in KL
[Kuala Lumpur]? No pictures to get our spirits up?" Based on other emails and similar patterns
of conduct, I have reason to believe that FRANCIS was paying for rooms for U.S. Navy officers
including SANCHEZ at upscale hotels in Kuala Lumpur and Singapore, together with the
services of female escorts.
18.

From June 2010 through March 2011, SANCHEZ provided FRANCIS with

classified and/or U.S. Navy proprietary internal information about U.S. Navy ship schedules, and
husbanding issues that could affect GDMA, in violation of SANCHEZ's official and lawful
duties, as follows:
a. In a June 13, 2010, email, SANCHEZ provided FRANCIS with the dates and
locations of port visits by the USS Blue Ridge in July and August 2010. The USS Blue Ridge is
the Command and Control vessel for the Seventh Fleet, and accordingly where senior officers for
the Seventh Fleet reside when at sea.
b. In an email of September 4, 2010, SANCHEZ sent FRANCIS internal Navy
emails from the Director of FLC Yokosuka, discussing husbanding costs associated with a visit
by an aircraft carrier to Port Klang, Malaysia, and the Navy's efforts to lower the charges.
SANCHEZ also asked FRANCIS how they could meet in Singapore the following day.
c. In November 2010, emails show SANCHEZ sending FRANCIS internal Navy
emails discussing cost-containment strategies for an upcoming port visit to Manila. Internal
GDMA emails then show FRANCIS and his staff devising their counter-strategies. In other
9

emails, FRANCIS asked SANCHEZ to keep sending him updates, particularly on the status of
the extension of the tour of duty for the Director of FLC Yokosuka, and the latest ship schedules
for replenishment at sea. In response, SANCHEZ promised to provide further details. He also
forwarded to FRANCIS an email that the Director, FLC Y okosuka had sent to the State
Department asking for State Department assistance with the port authority in Manila for an
upcoming ship visit which was not covered by GDMA's contract.
d. On February 5, 2011, in an email chain between SANCHEZ and FRANCIS,
SANCHEZ sent FRANCIS a recent ship scheduling change, and also provided him with detailed
comments and talking points for FRANCIS to raise in an upcoming meeting with an Admiral
about port visits costs and the U.S. Navy's cost savings initiatives.
e. On February 12, 2011, SANCHEZ sent FRANCIS an email advising him that
SANCHEZ would be available to meet FRANCIS in person in Japan, and sending him "the
king's update." Attached to this email was an internal email from the Commander of FLC
Yokosuka to an Admiral, and other senior officers, in which the Commander detailed activities
and concerns for the preceding week and the upcoming week. Several issues involved costs
under husbanding contracts, including port tariffs, items which the Navy emails referred to as
"gold plated" items, fuel, and details of the then-pending husbanding contract. According to
records I have reviewed, GDMA was subsequently awarded that contract.
f. In early March 2011, an issue arose with regard to the impending visit of the
USS Blue Ridge to Port Klang, Malaysia. The Navy understood that the ship could not dock
unless it promised up front to pay the port tariff charges which GDMA asserted were due to Port
Klang Cruise Terminal, the port authority. According to other documents obtained in the
investigation, FRANCIS is the majority stockholder in Glenn Marine Group, which owns Port
10

Klang Cruise Terminal. In March 2011, SANCHEZ provided FRANCIS with emails containing
internal Navy discussions, including legal opinions, among FLC Yokosuka and FLC Singapore
personnel on what actions to take on the port tariffs issue. In an email to FRANCIS, SANCHEZ
also provided advice on how to handle the situation with FLC.
19.

At this time, between March 3 and 11, 2011, FRANCIS was emailing with a

woman in Indonesia whom he used to provide female escorts. This email asked the woman to
set up "girls" to come to Singapore on March 14-16, 2011, for SANCHEZ, another Navy
Commander, and two other men. One of the emails described one of the "girls" as "Alda 167
cm [height], 36b [bra size], very young n still study, 17 yr." However, according to an email
FRANCIS sent to the woman on March 10, 2011: "All Cancel sorry Japan Tsunami so Jose and
friends not coming."
20.

On March 21, 2011, SAN CHEZ deposited $13, 000 in cash into his account at

Navy Federal Credit Union. Our investigation has not been able to locate a legitimate source for
this cash.
21.

Later that month, on or about March 29, 2011, FRANCIS sent SAN CHEZ an

email containing a picture of one of the girls identified in Paragraph 19 of this affidavit, along
with the statement, "I miss you BABE:)." SANCHEZ replied to FRANCIS the same day, "Nice
pictures ...... Brings back good memories:)."
22.

Between March 30, 2011 and May 26, 2011, SANCHEZ provided FRANCIS

with classified and U.S. Navy proprietary internal information about U.S. Navy ship schedules,
and husbanding issues that could affect GDMA, in violation of SANCHEZ's official and lawful
duties, as follows:

11

a. On April 11, 2011 SANCHEZ sent an email to FRANCIS that contained the
identities of U.S. Navy ships and scheduled port visits for each ship during the months of April,
May, and June, 2011, saying "apologize for the delay" and offering "more to follow as I see
updates." At the time, this information was classified as "Confidential." On April 12, 2011,
FRANCIS sent an email to SANCHEZ, thanking him for the updates, asking for additional
Commander summaries, and seeking inside information from two named FLC Yokosuka
contracting officials who were then involved in the award of a regional husbanding contract
(later awarded to GDMA).
b. On May 21, 2011 SANCHEZ sent an email to FRANCIS that contained
internal FLC Yokosuka email correspondence and a document identifying the costs that a
competing husbanding contractor charged the U.S. Navy for husbanding services associated with
a ship's visit to Manila, Philippines.
c.

On May 23, 2011 SANCHEZ sent four emails to FRANCIS that contained 22

pages showing the identities of U.S. Navy ships by type and each ship's scheduled port visits
during the months of June, July, and August, 2011. At the time, these materials were classified
as "Confidential." One of these attachments included information about ships of the United
Kingdom, Netherlands, and France. On the same day, FRANCIS sent an email response to
SANCHEZ: "Thanks, got it all. .. "
23.

On May 26, 2011, while SANCHEZ and his family were in Hong Kong,

SANCHEZ sent an email to FRANCIS stating, "Just in case you don't have it, my Blackberry
number is 08013857325. No one showed up this morning, so we are headed out to lunch.
Thanks again sir." Within an hour, SANCHEZ sent another email to FRANCIS stating, "Belay
my last sir...just received a call and he is on his way." SANCHEZ then sent FRANCIS two other
12

emails, one stating "THANKS AGAIN SIR" and the second stating "Thanks again sir. . .I'm
completely humbled by everything ... your man just left. Time to enjoy the great food of Hong
Kong ... wish you were here .... " In the last email in the string, FRANCIS responded SANCHEZ:
"My pleasure, brudda." We have developed evidence that FRANCIS used couriers to provide
cash and things of value to Navy officials, however, we do not know what SANCHEZ received
that prompted these expressions of gratitude.
24.

On July 21, 2011, FRANCIS sent an email again to the woman in Indonesia,

asking her to arrange girls for SANCHEZ in Singapore and Jakarta: "Hi Sayg on the 23rd Jose is
in Singapore for 5 days then to Jkt 27th to 30th. Can you arrange [name] and some girls for him
in Jakarta and Singapore .... " On July 21, 2011, the woman responded to FRANCIS, asking
how many girls for how many days in each location, and for how many people.
25.

Between August 26 and 28, 2011, FRANCIS communicated through email to the

email address of an escort whom FRANCIS hired for SANCHEZ (referred to here as "JA''). On
August 26, 2011, FRANCIS sent an email to JA stating, "Hey Love Jose is in Manila at the
DIAMOND Hotel go and see him he needs some love asap room - Diamond hotel - phone
number 632-[xxx-xxxx] -room number 2402 - Blackberry# 81-[xxxxxxxxxx]." JA responded
to FRANCIS, "Papi, I'm here jose's fon is not an[]swering. I'm here [h]aving dri[n]ks at the
lobby. Call him:: ((maybe his sleeping?" Later that day, JA emailed FRANCIS, "I'm with h[i]m
already heehhe." On August 28, 2011, FRANCIS emailed JA again asking, "Hey so did you see
Jose on the 2nd day?" The next day, JA responded to FRANCIS: "Goodmoming papi. Hi. First
day I saw him 2nd day i I waited in fron[t] of the hotel for 2hrs and no jose ((("
26.

Between September 28 and December 2011, SANCHEZ provided FRANCIS with

classified and/or U.S. Navy proprietary internal information about U.S. Navy ship schedules, and
13

husbanding issues that could affect GDMA, in violation of SANCHEZ's official and lawful
duties, as follows:
a. On September 28, 2011, SANCHEZ sent an email to FRANCIS that contained
internal discussions among U.S. Navy personnel about the high cost for tug boat services that
GDMA charged U.S. Navy ships visiting Sepangar and Singapore, and steps the U.S. Navy
could take to reduce these costs.
b. On October 1, 2011, SANCHEZ sent an email to FRANCIS that contained an
internal FLC Yokosuka email and a Microsoft PowerPoint briefing about port tariff costs at Port
Klang, and a perceived conflict of interest between GDMA and the Port Klang Cruise Terminal,
which is controlled by FRANCIS.
c. On October 20, 2011, in reference to a port visit in Laem Chabang, Thailand,
FRANCIS sent an email to SANCHEZ asking him to "swing it our way" concerning an issue
about the U.S. Navy's use of "sea cards" to buy fuel. The U.S. Navy can use "sea cards" to
purchase fuel for its ships at a price negotiated by the Defense Logistics Agency for Energy, as
opposed to procuring fuel at usually higher prices from the husbanding contractor, or the local
economy. On October 21, 2011, SANCHEZ replied, "Ask and you shall receive ... we worked
this out this morning.... " In October 2011, the USS Mustin did in fact conduct a port visit to
Laem Chabang. During the port visit, the USS Mustin bought fuel from GDMA, not "sea cards."
As a result, the USS Mustin paid over $1M for fuel, more than twice what the fuel would have
cost through use of the "sea card."
d.

On October 20, 2011, FRANCIS also asked SANCHEZ to find out ifFLC

management had met about GDMA's force protection invoices for Thailand. FRANCIS
followed that direction and reported back to FRANCIS.
14

e.

From November 10 to 12, 2011, FRANCIS received from SANCHEZ

internal Navy communications about CHT charges and service, asked for SANCHEZ to help
GDMA, and received advice from SANCHEZ. For GDMA, continuous CHT is much more
lucrative than scheduled CHT pickup. On November 10, 2011, FRANCIS emailed SANCHEZ
about a "Smart ass SSO [ship supply officer on the USS Curtis Wilbur]" causing problems
regarding CHT service, and asking "when are you going to weigh in and fix this nonsense." The
following day, SANCHEZ sent an email to FRANCIS, advising him specifically on how to
address CHT issues with the Navy after two recent mishaps, and to demonstrate the need for
continuous CHT service.
f.

On November 14, 2011, SANCHEZ emailed FRANCIS about the Director of

FLC Yokosuka, SANCHEZ's supervisor, trying to verify recent GDMA invoices for Thai picket
boats. SANCHEZ reported that the Director had said that if she could not obtain verification
from the company that supposedly provided the picket boats, she intended to have NCIS
investigate possible fraud. "Just wanted to give you a head's up on another potential
investigation." In fact, these were incidental charges for which GDMA was supplying phony
invoices and overbilling the Navy.
g. On December 3, 2011, SANCHEZ emailed FRANCIS that an agent in
Yokosuka had updated a Navy Commander to the effect that the agent was making progress on
the open investigation in Japan. He concluded: "ls there anything else you need? When are you
actually going to be in town?"
h. On December 3, 2011 FRANCIS replied to SANCHEZ stating, "With NCIS
there are two investigations one is Mehle [GDMA's Country Manager for Japan] and his mess in
Japan which we could defend a disgruntled sub con[tractor] who is stirring shit and same for
15

Thailand the RTN [Royal Thai Navy] Fraud case which both are hard to prpve and charge. I have
inside Intel from NCIS and read all the reports. I will show you a copy of a Classified Command
File on me from NCIS ha ha."
27.

Between March and May 2012, SANCHEZ provided FRANCIS with classified

and/or U.S. Navy proprietary internal information about U.S. Navy ship schedules, and
husbanding issues that could affect GDMA, in violation of SANCHEZ's official and lawful
duties, as follows:
a. On March 29, 2012, SANCHEZ sent FRANCIS an internal Navy email chain
in which FLC Yokosuka (including SANCHEZ) discussed how best to handle the CHT charges
for ships, and exchanged drafts of language for ships to use in their requests to GDMA for CHT
handling. SANCHEZ introduced his email to "LK" with: "Here is the expected language that
we plan on telling ships to submit in their LOGREQs." A LOGREQ is used to order
husbanding services. SANCHEZ forwarded this string of emails three times before FRANCIS
confirmed receipt.
b. On April 29, 2012, SANCHEZ forwarded to FRANCIS internal Navy
information about the upcoming solicitation of a husbanding contract for Southeast Asia, telling
FRANCIS: "LK, This is good, you guys can probably make a better profit here .... "
28.

On May 8, 2012, FRANCIS sent SANCHEZ an email containing a hotel

reservation confirmation at the Shangri-La Hotel in Singapore for the period May 14 to 19, 2012.
On May 9, 2012, SANCHEZ emailed FRANCIS his reply, stating, "Sir, Thank you very much .. .I
am always humbled by your generosity." On May 9, 2012 FRANCIS sent SANCHEZ an email
stating, "Cheers Bro, Flight details for pick up." According to the reservation, the room at the

16

Shangri La Hotel was guaranteed with an American Express card ending in X-5002. FRANCIS
has an American Express card ending in X-5002.
29.

Between July 9, 2012 and July 11, 2012, FRANCIS and SANCHEZ exchanged

emails regarding airline reservations for immediate travel to the United States. The emails show
that SANCHEZ had delayed getting these tickets, and now the prices were very high.
SANCHEZ asked FRANCIS ("Boss") for help, and FRANCIS arranged and paid for this travel,
totaling over $13,000. FRANCIS then sent SANCHEZ an email containing an airline flight
confirmation for SANCHEZ and his daughter, and stating, "Bro I will issue the following tickets
we are too late for this evenings flight confirm asap." On July 11, 2012, SANCHEZ sent
FRANCIS an email stating, "[F]light is fine, sorry for the delay."
30.

Between July 9 and July 12, 2012, SANCHEZ provided FRANCIS with classified

and/or U.S. Navy proprietary internal information about U.S. Navy ship schedules, and
husbanding issues that could affect GDMA, in violation of SANCHEZ's official and lawful
duties, as follows:
a. On July 10, 2012, FRANCIS emailed his management group about another
issue regarding a ship's purchase of fuel through sea cards, saying: "We need th[e] Fuel Intel
from Yoko[Yokosuka]! Then we knowhow to reply! Ifwe reply now it will b on th radar!"
Later that day, SANCHEZ sent FRANCIS a draft of an internal U.S. Navy briefing by a U.S.
Navy Commander, intended for NAVSUP and FLC, on strategies to recoup debts owed by
contractors for overcharging on husbanding contracts. That briefing focused on CHI charges
and procedures, and the Online Pricing Application, which are issues that form part of this
investigation.

17

b. On July 10 or 11, 2012, SANCHEZ sent FRANCIS internal Navy emails
discussing allegations of fraud by GDMA being referred to the NCIS.
c. On July 12, 2012, SANCHEZ sent FRANCIS an email stating, "Looks like
contracts is requesting to extend everyone. We will hold a board once I get back off leave. I will
try my best and move people out. Currently at airport... thanks again sir." According to
documents I have reviewed and based on my training and experience, I understand that the email
concerned extending the tour of duty of five people, including the Director of FLC Yokosuka.
FRANCIS viewed these persons, including the Director, as unfavorable to GDMA. SANCHEZ
attached to this July 12, 2012, email the internal U.S. Navy extension requests submitted for
three of the employees in question, as well as an internal email chain discussing these extensions.
FRANCIS forwarded SANCHEZ's email to his top management, calling these extensions "BAD
NEWS," but noting: "Jose sits on the Board and will try to sway the decision." FRANCIS then
asked his GDMA Vice President HP, who had been a U.S. Navy officer, to provide his ideas on
"how can we influence behind the scene." HP responded later that day with several paragraphs
of suggestions and information, and suggesting that FRANCIS send the comments to
SANCHEZ, saying "Anything else is up to Jose."
31.

After the July plane tickets, SANCHEZ provided FRANCIS with classified

and/or U.S. Navy proprietary internal information about U.S. Navy ship schedules, and
husbanding issues that could affect GDMA, in violation of SANCHEZ's official and lawful
duties, as follows:
a. On August 2, 2012, SANCHEZ sent FRANCIS an email discussing
complaints against GDMA by the U.S. Consulate General in Japan regarding GDMA's lack of
coordination with the Hakata, Japan port authority.

18

b. Also on August 2, 2012, SANCHEZ sent several emails to FRANCIS
containing internal FLC emails, one of which contained the new FLC Commanding Officer's
agenda with respect to husbanding service contracts, and another of which included internal
instructions to U.S. Navy officials that ships should be more judicious in regards to the costs of
husbanding services.
32.

On January 28, 2013, SANCHEZ's wife deposited $10,000 in cash into their

account at the Navy Federal Credit Union. The origin of this cash is not kno~n to the
investigation.
33.

On February 3, 2013, SANCHEZ emailed FRANCIS his thoughts about a draft

letter FRANCIS planned to send to the U.S. Naval Attache in Malaysia, arguing against reducing
port visits to Malaysia by U.S. Navy ships due to high husbanding costs.

II
II
II
II
II
II
II
II
II
II
II
II
19

CONCLUSION

34.

Based on the foregoing, I respectfully submit that there is probable cause to

believe that, from at least January 2009 through February 2013, LEONARD GLENN FRANCIS
and United States Navy Commander JOSE LUIS SANCHEZ have engaged in a bribery
conspiracy in violation of 18 U.S.C. § 371, by agreeing that FRANCIS would make, and
facilitate the making of the payment of things of value, including travel expenses, entertainment,
and prostitutes, to SANCHEZ in return for him violating his official and lawful duties by
transmitting classified information to a person not entitled to receive it, and making unauthorized
disclosures of proprietary, internal U.S. Navy information, and to influence SANCHEZ in the
performance of his official duties, including recommending where U.S. Navy ships came to port
and where government personnel should be assigned. I therefore request that the Court issue
arrest warrants for FRANCIS and SANCHEZ. I further request that the complaint, affidavit, and
warrants be placed under seal until further Order of the Court.
Respectfully submitted,

.. _______, 2013.
Subscribed and sworn to before me on _ ___,,,,_.M~'~v.__I

The Honorable Bernard G. Skomal
UNITED STATES MAGISTRATE JUDGE

20