SAN DIEGO — A U.S. magistrate judge issued a conditional ruling Thursday that would allow a Malaysian defense contractor accused in one of the biggest Navy bribery schemes in years to be released on $1 million bail.
Judge Jan Adler attached to his ruling a list of stringent restrictions, including that Leonard Francis not only be monitored by GPS but must rent a San Diego apartment with surveillance cameras and alarms on the windows, and hire an independent, 24-hour security guard who would alert authorities if he tried to flee.
Adler also stayed his decision pending a review from a U.S. district judge.
Francis, the CEO of Glenn Defense Marine Asia Ltd., is the central figure in a multimillion bribery case that has been rocking the Navy. He was arrested in San Diego on Sept. 16 on charges that he offered luxury travel, prostitution services and other bribes to Navy officers in exchange for confidential information, including ship routes, that prosecutors say he used to overbill the Navy for port services in Asia.
One Navy captain also diverted ships to ports with less oversight so Francis’ company could overcharge more easily or invent fake port fees, according to charging documents.
Three Naval officers have been charged in addition to Francis and his cousin, a company manager. All have pleaded not guilty. The Navy suspended access to classified material for two admirals, who are on temporarily leave while the probe continues.
The Navy announced Thursday that a San Diego captain has been suspended on unspecified allegations linked to the probe.
Prosecutors argued that Francis should remain in custody, given the gravity of the case. They said the Malaysian businessman is a wealthy world traveler who owns a fleet of vessels and can go wherever he wants. Prosecutors said Francis also has no strong ties to the United States, unlike the Navy officers who have been released on bonds.
“He has tremendous resources to buy whatever travel documents he needs south of the border,” Assistant U.S. Attorney Robert S. Huie told Adler, noting that San Diego is only 16 miles from Tijuana, Mexico.
Francis also has a criminal record, Huie said, pointing to his conviction for illegal arms possession in Malaysia when he was 24.
Defense attorney Pat Swan called Francis “a loving and doting parent” who has suffered undue hardship being away from his three children, ages 5, 6 and 7. His 70-year-old mother has taken over the care of the children in Singapore while Francis has been in custody, but she is in poor health, Swan said.
Swan told the judge that Francis knew he was under investigation and could be arrested when he chose to go to San Diego to meet with Navy officials, who invited him to give a presentation on his business as part of a sting operation. Francis was arrested at his hotel after arriving.
“Mr. Francis wants to face the charges,” Swan said.
It also would be tough for the tall man weighing more than 300 pounds (136 kilograms) and known in Navy circles as “Fat Leonard” to not be spotted, given the case’s widespread media coverage, Swan said.
Huie, the prosecutor, said Francis knew of the investigation because he had bribed a Navy investigator who has been arrested. He said Francis came to San Diego after investigator placed a fake document in his file saying the prosecution had declined the case.
Adler said in making his ruling that “I will not minimize the seriousness of this case,” but the law also requires him to release a defendant if he can fashion conditions that will reasonably ensure he will not flee, which he believes the restrictions do.
Adler granted a request by the prosecution to not put his ruling in effect until it has been reviewed and approved by a district judge. It was uncertain when that will happen.