Navy officer admits guilt in kickback case

A retired U.S. Navy officer pleaded guilty Thursday to federal charges of arranging kickbacks on behalf of an Asian defense contractor, marking an escalation of a long-running bribery scandal that has shaken the ranks of the Navy.

Edmond Aruffo, who retired as a lieutenant commander in 2007 after serving 20 years in the Navy, pleaded guilty to one count of conspiracy to defraud the U.S. government as part of a deal with federal prosecutors in San Diego.

After leaving the Navy, Aruffo worked for three years as an executive with Glenn Defense Marine Asia, a Singapore-based contractor that supplied and serviced Navy ships at ports across Asia until the bribery investigation became public in September.

Aruffo is the fourth person to plead guilty in the case, along with a Navy petty officer, a senior agent with the Naval Criminal Investigative Service and another executive with Glenn Defense Marine.

Three others are awaiting trial, including two Navy officers and the company’s president, Leonard Glenn Francis, a large and wealthy man known in Navy circles as “Fat Leonard.”

In addition, the Navy has said that two admirals and two captains are under investigation, although those individuals have not been charged with a crime.

According to a copy of the plea agreement filed Thursday in federal court in San Diego, Aruffo arranged an elaborate kickback scheme in Japan that defrauded the Navy of between $1 million and $2.5 million between July 2009 and September 2010.

During that time, Aruffo worked as the country manager in Japan for Glenn Defense Marine. The court papers state that he conspired with Japanese subcontractors to overbill the Navy for basic services virtually every time one of its ships docked in a Japanese port, naming 19 different vessels that did so.

Aruffo and Glenn Defense Marine used some of their ill-gotten gains to provide meals, drinks and gifts to Navy officers, according to the plea agreement, although the document did not divulge specific amounts.

“This corruption scandal continues to lead us in new directions, and we continue to marvel at the extent of it,” Laura Duffy, the U.S. attorney for the Southern District of California, said in a statement.

The kickback scheme in Japan is a new angle in the bribery scandal. Prosecutors have previously charged Francis and others in his company with overbilling the Navy for more than $20 million in scams that took place in Malaysia, Thailand and other locales.

Francis was a familiar face for decades among Navy admirals and commanders serving in the Pacific. Prosecutors have accused him and his employees of doling out cash, luxury travel and prostitutes to Navy officials in exchange for inside information that he used to win contracts and bilk the government.

Francis has pleaded not guilty. But Aruffo is the second person who worked for him to admit committing crimes and to cooperate with prosecutors.

Aruffo’s involvement in the case was not previously known, although prosecutors filed court records last fall that made reference to a retired Navy officer with the same initials who held the same position with Glenn Defense Marine.

Gary Bruckner, a San Diego attorney who is listed as Aruffo’s defense lawyer, did not respond to an email seeking comment. Federal officials said Aruffo was in federal custody and a judge set bond at $40,000. He is scheduled to be sentenced in October.

Aruffo formerly served as an officer on the USS Blue Ridge, the flagship of the 7th Fleet, which is responsible for Navy operations across most of Asia and the Pacific. Prosecutors have charged three other Navy officials who served on the Blue Ridge with accepting bribes from Francis.

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