Two former high-ranking executives at a defense contracting company in Singapore will spend the next few years behind bars for overbilling the U.S. Navy roughly $35 million for servicing ships in Asia.
It’s known as the “Fat Leonard” scandal, because the company involved in the fraud is Glenn Marine Group, which is owned by Leonard Glenn “Fat Leonard” Francis.
The two executives are Linda Raja and Neil Peterson, both of whom lived in Singapore. Raja was sentenced to 46 months, or almost four years, while Peterson got 70 months, or almost six years.
They were arrested in Singapore in October of 2016. The two high-ranking executives pleaded guilty to one count each of conspiracy to defraud the United States via false claims.
How did the “Fat Leonard” scam work?
Here’s a breakdown of how the mega military contractor defrauded the government:
- Peterson, Raja and other managers at Glenn Marine Group wrote and sent in bids for military contracts that were totally false and listed “fake” prices from competitors.
- Their bids also wrongfully stated that other companies vying for the work were unable to complete all of the work or did not meet the requirements.
- When they did this, they helped to make their contract bids the most attractive and thus were chosen by the Navy as the lowest responsible bidder.
- The company was able to raise their prices for the work they did because they didn’t have any real competition due to their fraudulent bid practices.
- They also falsified documents related to port tariff rates and port authorities, which led to the company overcharging the Navy significantly.
- In one instance alone, the Navy was overbilled by almost $900,000.
Ultimately, 27 people have been charged in connection with the scandal, including high-ranking officers from the Navy and the Marines.
What were the other factors and considerations in the case?
Shanlon Wu, a Washington, D.C., based defense attorney and a partner at the law firm Wu, Grohovsky & Whipple, was one of Peterson’s lawyers.
Wu explained that Peterson was only 19 years old when he first started working for “Fat Leonard” and was led to believe it was an “honorable occupation.”
Peterson was remorseful at his sentencing and sorry for continuing to associate with a business that eventually committed crimes.
“He accepts responsibility for his conduct and looks forward to moving on with his life and being reunited with his family,” Wu said.
Shanlon Wu is a criminal defense attorney specializing in white collar crime and crimes on college and university campuses. Contact his office for more information.
