The hunt for Fat Leonard, the multimillionaire who scammed the Navy

Introducing Grid Health, our new weekly health and policy newsletter

The hunt for Fat Leonard, the multimillionaire who scammed the Navy, gave secrets to China and escaped custody

Update: Since this story published, Leonard Francis was reportedly taken into custody by Venezuelan authorities at Simón Bolívar International Airport. INTERPOL, which aided in Leonard’s apprehension, said he was trying to travel to Russia.

Two weeks ago, the convict at the center of one of the worst corruption scandals in Pentagon history slipped the confines of his house arrest — with the apparent help of moving trucks — and fled the country.

How he escaped, and where he went, remains a mystery. Tom Wright, a journalist who has reported extensively on Leonard’s massive scheme, believes the fugitive may have relied on his favorite criminal tools: coercion and bribery.

qoute

He either paid somebody off, or it’s the world’s most incompetent security firm.

Tom Wright, producer, journalist and host of the "Fat Leonard" podcast

For much of the 2000s, “Fat Leonard,” aka Leonard Francis, ran a firm that tended to the logistical needs of the Navy’s Seventh Fleet — like garbage service, refueling, tugboats and port services. The fleet, the U.S.’s largest forward deployed force, patrols the Pacific Ocean and is tasked with countering Chinese military advances in the region, a top priority of U.S. national defense strategy.

ADVERTISEMENT

A federal investigation revealed Francis also tended to the base desires of top Navy officials, bribing them with a “rotating carousel of prostitutes,” absurdly expensive parties, orgies, cigars and free travel. They did favors in return, notably by giving Francis information, often classified, on ship and submarine schedules and more. That information helped Francis overcharge the Navy by millions.

The reach of Francis’ scheme was vast. Navy officials changed U.S. ship schedules to help Francis’ business out — even for giant aircraft carriers. As the Naval Criminal Investigative Service (NCIS) investigated his operation, Fat Leonard had a mole — a senior NCIS official based in Quantico, Virginia — leaking him information about the probe.

There is also evidence that Francis filmed senior Navy officials having sex with prostitutes and that some of that footage may have made its way onto Chinese servers, along with some of the most sensitive U.S. military secrets regarding missile defense and operations.

Prosecutors eventually charged over 33 people in the scheme, including 17 Navy officials who pleaded guilty. The investigation scrutinized 60 admirals and 550 other Navy officials for potential wrongdoing connected to Francis.

Francis himself was arrested in 2013 in a sting operation and started cooperating with investigators. He pleaded guilty in 2015 to bribery charges and was awaiting sentencing. After a cancer diagnosis in 2018, Francis’ attorneys asked the court to put him under house arrest, with Francis covering the cost of the security service enforcing his home confinement. The judge and prosecutors reluctantly agreed.

ADVERTISEMENT

On Sept. 4, just three weeks before his long-delayed sentencing hearing, moving trucks came to Francis’ San Diego home. The convict apparently removed his ankle monitor bracelet. Then, he disappeared.

Tom Wright, a reporter who spent years covering the Asian continent for Dow Jones and the Wall Street Journal, claims he has tracked down Francis, the recently escaped 350-pound fugitive facing federal bribery charges, and has an idea where he may be headed.

Wright is an expert on Francis’ case. He produced an investigative podcast on the topic last year and is working on a forthcoming TV series based on the investigation through his journalism and production studio, Project Brazen.

Over the course of several interviews, Francis gave Wright clues as to where he might flee, his motivations, and the failures of the Navy and Department of Justice. Grid spoke with Wright to get the skinny on the escape of Fat Leonard. This interview has been edited for length and clarity.

Grid: Who do you think is to blame for Leonard’s successful escape? How could this have happened?

ADVERTISEMENT

Tom Wright: I think it’s as if the Keystone Kops were in charge of it. It’s such an embarrassment for everyone involved. There are a number of things that are unclear. One is — what were the circumstances of Leonard’s house arrest? I was able to smuggle in a microphone to him without any trouble. His plea deal didn’t specifically stop him from giving interviews, but I don’t imagine that it’s something that the U.S. authorities wanted him to be doing. It was clear to me that the checks on his house were very lax even at that time, early 2021.

Obviously the U-Haul trucks were able to turn up. It’s still unclear how the hell that was possible given that he’s under house arrest, right?

G: The hired security that Leonard was paying for — that wasn’t for the purpose of protecting him. It was to make sure he didn’t escape.

TW: Correct. You know, he’d been in jail from 2013 until 2017, and then he had kidney cancer. So he moved to house arrest, and the court order meant that he had to pay for that security now. The security is still supposed to guard him. He’s not supposed to be in charge of the security as far as I understand, he was supposed to pay for it.

The huge question we have about what happened on the Sunday when he escaped was: Where was that security? And who was that security? Which company was doing that security? The federal authorities won’t tell the San Diego media, who’ve asked the name of that company. It’s a big unknown about how he was able to get away so easily.


G: Given what we know about how easily corruptible the senior Navy officials were, and even a Navy law enforcement official, do you think Leonard could have bribed his way out of his house arrest?

TW: Well, he either paid somebody off, or it’s the world’s most incompetent security firm. It has to be one of those two things.

G: What is the role of the U.S. Marshals or the federal court system’s Pretrial Detention Services?

TW: I think there’s gonna be a lot of finger-pointing. I know that the NCIS and the Marshals’ service has put $20,000 each into this reward for Leonard’s capture, which is a puny amount — $40,000 together. I don’t understand.

G: How is the reward that small? He still owes the Navy $30 million. And he did arguably much more damage than that.

ADVERTISEMENT

TW: There was never a real attempt to properly account for what happened in this case. We know the phrase “different spanks for different ranks” means that the senior Navy admirals were not properly punished. And so why would they want to get Leonard back?

He’s already done nine years in detention in jail, and then house arrest, right? He was arrested in 2013. So you know he’s already done quite a lot of time for what is a white-collar crime, much more than anybody else. I think the only person who was given a bigger sentence was the corrupt NCIS officer who was given 12 years. So Leonard’s already done like the longest time of anybody [in the investigation].

Now the trials are over, so the Navy and the Department of Justice can draw a line under this. What’s the point for them of trying to get him back?

G: Do you believe he’s dying of cancer?

TW: There was a comment that Leonard made to me that we used in the podcast, in the last episode, where I asked him, “Are you dying of cancer?” And he says, “Well, I have, you know, no, I have to maintain my cancer. I want to stay here in home detention.” The defense counsel for these five Navy officers who were on trial back then pounced on that, to try to discredit Leonard as a witness, because he was the star witness for the government. They were saying, “Look, he’s not trustworthy,” and tried to impeach him.

ADVERTISEMENT

I think that was nonsense. In my opinion, he has cancer. He would often have a shaved head when I was talking to him. He showed that to me. There’s no question that he has cancer. But I guess the question is, was it in remission? Would he have been able to go back to jail?

Don’t forget, this guy cooperated with U.S. authorities for seven years. I think because he was such a cooperating witness for them, they wouldn’t have wanted to put him back in jail. He continued to cooperate even after he did our podcast, which obviously annoyed prosecutors.

That’s why I was so surprised that he went on the run. Why go on the run two weeks before being sentenced if you’ve been cooperating for seven years and you’ve been on home arrest since 2017? I guess he just thought that he was going to get more time in jail.

G: What is your opinion on the overall prosecution of the Navy officials?

TW: In general, I would say that the Navy covered up this case. The Department of Justice indicted people where they believed there was criminal behavior. The Navy was supposed to deal with the cases that were seen as less serious. But if you look — as we pointed out in episode nine of our podcast — some of the more junior officers did jail time, and senior admirals got a letter of censure and retired out of the Navy quietly, and went on to get jobs in Washington or defense contracting jobs.

ADVERTISEMENT

We profiled this one guy called David Kapaun who’s out of jail and looking to get a pardon. He’s furious because he’s read these censure letters [for senior officials] and trying to work out what’s the difference between what he did and what they did. That’s the scandal here.

G: Another big issue you raise on the podcast are national security concerns. You report that some very compromising video of senior Navy officials and sensitive Navy secrets ended up in China’s hands, through Leonard.

TW: When the NCIS started to finally investigate this — when they worked out that they’ve been compromised by the corrupt NCIS officer — a person who was involved in that investigation says that they were not worried about the corruption. You know, a bit of defense contracting corruption, $35 million or whatever it was? I mean it’s bad. It’s terrible. It’s a waste of the $700- or $800 billion that the government spends every year on defense. But that wasn’t a major issue. The major issue was that Leonard had moved his servers onto Chinese servers to avoid the NCIS at the end of the scam. My reporting shows that the Chinese got ahold of both sexual kompromat and important national security details about the positions of U.S. anti-ballistic missile defenses.

Don’t forget — Leonard was getting told the positions of ships and schedules for nuclear submarines, missile defense, all kinds of things.

G: So where do you think Fat Leonard is, where do you think he’s heading, and can you give us any clues about how you know?

ADVERTISEMENT

TW: We have information that he’s in Venezuela, and that information was good as of this past Saturday. We don’t know exactly where he’s headed, but what we’ve done is we’ve placed a bunch of things together. First of all, the U.S. Marshal service said that they thought he went over the Mexican border, that was their guess at the time because Tijuana is not far, and they don’t really check cars. So now that we know he’s in Venezuela two weeks later.

My guess would be that he’s heading south. The reason I say that is because we know, I know, based on conversations with him, that he has a girlfriend in São Paulo who he talked about quite a lot during our interviews. He talked about how she’s a Japanese-Brazilian woman and how she was waiting for him while he was in jail. So that was his current girlfriend — he has a lot of girlfriends — and how he had a house for her in São Paulo. It’s a guess, but its possible he’s heading there.

G: And is there anything you can tell us about how you know he is or was in Venezuela last Saturday, without exposing your sources?

TW: Nothing. But it’s 100 percent accurate.

Thanks to Lillian Barkley for copy editing this article.

  • Jason Paladino
    Jason Paladino

    Investigative Reporter

    Jason Paladino is an investigative reporter for Grid where he focuses on national security policy, U.S. foreign involvement and corruption.

TOPICS

CrimeAsia