.. \ --· FILE[~ 1 11 KAR dO AM 10= _lZ 2 s~}fJitNUC~S~~Tc\RJf JAl~~:J,,. 3 tA pi, OEPIJ" '- 9Y 5 6 7~~-.... ........ ·. ,1·-"'· 8 UNITED STATES DISTRICT COURT 9 SOUTHERN DISTRICT OF C~FORNIA ( January 2016 Grand Jury 10 11 UNITED STATES OF AMERICA, 12 13 14 15 16 17 18 19 20 21 22 Case No. 1 7 CR O6 2 3 JLS I.ND I f TM ENT v. Title 18~ U.S.C., Sec. 371 Conspiracy; Title 18, U.S.C., Sec. 20l(bf (2) (A) and (C) Bribery; Title 18, U.S.C., Sec. 100l(a)(2) - False Statements; Title 18, U.S.C., Sec. 1519 - Obstruction of Justice; Title 18, U.S.C., Secs. 1349, 1346, and 1343 Conspiracy To Commit Honest Services Wire Fraud; Title 18, U. S. C. , Sec . 9 81 (a) ( 1) ( c) , and Title 28, U.S.C., Sec. 2461(c) Criminal Forfeiture DAVID NEWLAND ( 1) , aka "Newly," ENRICO DEGUZMAN ( 2) , aka "Rick," DONALD HORNBECK ( 3) , aka "Bubbles," JAMES DOLAN ( 4 ) , aka "JD" I BRUCE LOVELESS (5), DAVID LAUSMAN (6), aka "Too Tall," STEPHEN SHEDD ( 7) , MARIO HERRERA (8), aka "Choke," aka "Choke OIC," ROBERT GORSUCH (9), 23 Defendants. 24 25 The grand jury charges that at all relevant times: 26 27 INTRODUCTORY ALLEGATIONS A. The u.-s. Navy's Seventh Fleet 28 MWP:PAHO:nlv:San Diego:3/9/17 1. 1 The U.S. Navy was a branch of the U.S. Department of Defense, 2 whose mission was to maintain, train, and equip combat-ready naval force 3 capable of winning wars, 4 of the seas. 5 fleet, 6 Sailors and Marines. 7 ships and subordinate commands, 8 Ocean throughout Southeast Asia, Pacific Islands, Australia, Russia, an 9 the Indian Ocean territories, as well ships and personnel from other U.S. with The U.S. 60-70 Fleets ships, 200-300 aircraft and approximately 40,000 The Seventh Fleet was responsible for U.S. Na enter the which operate in the Western Pacific Navy 11 ("AOR"). 12 Seventh Fleet and housed at-sea 13 officials. 2. and maintaining freedo Navy's Seventh Fleet was its largest numbere 10 14 that deterring aggression, Seventh Fleet's area of responsibilit The U.S.S. Blue Ridge was the command and control ship of th facilities The Seventh Fleet's motto was: for Seventh Fleet senio Ready Power for Peace. The Seventh Fleet was under the command of a Vice Admiral, 15 oversaw a staff of other senior U.S. Navy officers charged with runnin 16 the Seventh Fleet's operations. 17 Departments, each designated Nl through NB. 18 served aboard the U.S.S. Blue Ridge. This operational staff was arrayed int The Seventh Fleet's staf The Seventh Fleet was further divided into specialized tas 19 3. 20 forces, 21 commanded all transiting surface forces in the Seventh Fleet AOR, 22 Task Force 73 23 and other support vessels. 24 4. including Task Force 70 (CTF 73), (CTF 70), which, among other things, an comprised of the Seventh Fleet's supply ship The U.S. Navy Naval Supply Systems Command ( "NAVSUP") was 25 command within the U.S. Navy, which was responsible for the global suppl 26 and delivery of goods and services to U.S. Navy personnel and warfightin 27 assets. 28 Navy The U.S. Navy Fleet Logistics Centers ( "FLC") , formerly the U.S. Fleet and Indust·rial Supply Center 2 ( "FISC") , were subordinat 1 commands of NAVSUP located in various domestic and foreign locations. 2 FLCs provided logistics 3 operating in the FLC's AOR. 4 awarding, and overseeing contracts for goods and services, including shi 5 husbanding, required by the U.S. Navy in each FLC's AOR. 6 supported naval installations and vessels operating in Japan, Hong Kong, 7 South Korea, and Russia. 8 FLC Detachment in Singapore 9 installations and vessels operating in Singapore, Malaysia, 10 support for naval installations and vessels The FLCs were responsible for soliciting, FLC Yokosuk FLC Yokosuka also oversaw the operations of a ( "FLC Singapore") , which supported naval Indonesia, the Philippines, Thailand, Cambodia, Vietnam, Australia, and elsewhere. 11 B. The Defendants 12 5. Defendant DAVID NEWLAND, aka "Newly," was a Captain in the U. s. 13 Navy, who, 14 Ridge as the Chief of Staff 15 Fleet. 16 Seventh Fleet staff, and his responsibilities included the administratio 17 and oversight of all aspects of the Seventh Fleet, 18 control when the Seventh Fleet Commander was out of the region. 19 6. from July 2005 to July 2007, As Chief of Staff, ("COS") served aboard the U.S.S. Blu to the Commander of the Sevent NEWLAND was the senior officer among th including de fact Defendant ENRICO DEGUZMAN, aka "Rick," was a Colonel in th 20 United States Marine Corps, who, from July 2004 to July 2007, served o 21 the Seventh Fleet Staff as the Fleet Marine Officer. 22 DEGUZMAN was responsible for coordinating the missions of the Unite 23 States Marine Corps within the Seventh Fleet AOR. 24 January 1, 2011, DEGUZMAN served as the Assistant Chief of Staff ( "ACOS") 25 of Operations for U.S. Marine Corps Forces, Pacific, based at Camp H.M. 26 Smith, 27 DEGUZMAN served as the civilian Deputy Chief of Staff of Operations fo 28 U.S. Marine Corps Forces, Pacific. Hawaii. Immediately subsequent 3 to his In this role, From July 2007 t active duty service, .... 7. 1 Defendant DONALD HORNBECK, aka "Bubbles," was a Captain in th 2 U.S. Navy, who, from August 2005 to January 2007, served as.the Assistan 3 Chief of Staff for Operations at CTF70, 4 From February 2007 until January 2009, HORNBECK served as the N3, Deput 5 Chief of Staff for Operations for the Seventh Fleet. 6 was responsible for directing the operations of all combatant ships 7 the Seventh Fleet AOR. 8. 8 9 aboard the U.S.S. Kitty Hawk. As the N3, HORNBElC 1 Defendant JAMES DOLAN, aka "JD, " was a Captain in the U.S. Na who, from July 2007 through July 2009, served as the N4, Assistant Chie 10 of Staff for Logistics for the Seventh Fleet. 11 responsible for meeting the logistical needs of every ship within th 12 Seventh Fleet's AOR. 9. 13 In this role, DOLAN was Defendant BRUCE LOVELESS was a Captain in the U.S. Navy, who, 14 from July 2007 through July 2008, served as the N2, Assistant Chief o 15 Staff for Intelligence for the Seventh Fleet. 16 responsible for assessing and counteracting foreign intelligence threats 17 within the Seventh Fleet's AOR. 18 2007, 19 LOVELESS's last known address was in San Diego, CA, within the Souther 20 District of California. 21 22 23 LOVELESS was 10. the N2 As the N2, LOVELESS wa From in or about April 2005 to Jul for CTF70, Defendants HORNBECK, DOLAN, aboard the U.S. S. Kitty Hawk. and LOVELESS were referred to b members of the conspiracy collectively as the "0-6 Ensigns." 11. Defendant DAVID LAUSMAN, aka "Too Tall," was a Captain in th 24 U.S. Navy, who, from July 2004 through May 2006, was the Executive Office 25 of the U.S. S. Abraham Lincoln, 26 deployments to the Seventh Fleet's AOR. 27 2007, LAUSMAN served as the Assistant Chief of Staff for Operations fo 28 the Commander of Naval Forces Japan. an aircraft carrier that made multipl 4 From May 2006 through Januar From approximately March 2007 t -~ . 1 July 2008, LAUSMAN served as Commanding Officer of the U.S.S. Blue Ridge. 2 After receiving additional training on the operation of nuclear aircraft 3 carriers, from April 2009 through September 2012, LAUSMAN served as th 4 Commanding Officer of the U.S.S. George Washington, an aircraft carrie 5 that was forward deployed to the Western Pacific. 6 through May 2013, LAUSMAN worked assessing strategic communications fo 7 the United States Pacific Command in Hawaii. 12. 8 9 Navy, From September 2012 Defendant STEPHEN SHEDD was a Lieutenant Commander in the U.S. who, from November 2006 to October 2008, served as the Bevent 10 Fleet's South Asia Policy and Planning Officer, in which position he wa 11 responsible 12 consistent with U.S. Navy engagement priorities. From November 2008 t 13 May 2010, SHEDD served as a Personnel Distribution Officer for the U.S. 14 Navy, 15 to 16 Executive Officer and later the Commanding Officer of the U.S.S. Milius. identifying ports that U.S. Navy ships would visi stationed in Millington, TN, and thereafter, upon being promote Commander, 13. 17 for from March 2011 until May 2014, SHEDD served as th Defendant MARIO HERRERA, aka "Choke," aka "Choke OIC," was 18 Commander in the U.S. Navy, who, from March 2007 to November 2009, serve 19 as the Fleet Operations and Schedules Officer for the Seventh Fleet, an 20 for a period of time reported to HORNBECK. 21 responsible for scheduling the port visits for ships and submarines i 22 the 23 chachi09@cooltoad.com and in emails was 24 others, by the following nicknames: 25 ore 26 Anderson. " 27 28 Seventh Fleet's AOR. HERRERA In this role, HERRERA wa utilized the email addres referred to by Francis, an "Mario," "Chachi," "Choke," "Chok ("Officer In Charge") , " "Choker," "TA," "T .A. Anderson," and "Thomas 14. Defendant ROBERT GORSUCH was a Chief Warrant Officer in th U.S. Navy, who, from January 2005 to March 2008, served as the Sevent 5 .... 1 Fleet's Flag Administration Officer. 2 administrative support to the Seventh Fleet Commander and other senio 3 officers on the Seventh Fleet staff. In this role, GORSUCH provide 4 C. The U.S. Navy Conspirators 5 15. Edmond Aruffo, charged elsewhere, served for over 20 years i 6 the U.S. 7 January 2005 to July 2007, Aruffo served aboard the U.S.S. Blue Ridge, 8 variously 9 Assistant to the Seventh Fleet Chief of Staff, Navy, as retiring in July 2007 as a Lieutenant Commander. the Seventh Fleet's Protocol Officer, the Fro Executiv and the Seventh Fleet' 10 Force Protection Officer. 11 for GDMA as the Country Manager for GDMA Japan, 12 responsible for managing the daily operations of the GDMA facility i 13 Yoko"suka, Japan. 14 16. Jose Sanchez, In or about April 2009, Aruffo went to wor in which role he was charged elsewhere, was a Commander in the U.S. 15 Navy, who, from April 2008 to April 2010, served as the Seventh Fleet' 16 Assistant N4, 17 reported to DOLAN, was responsible for assuring that all Seventh Flee 18 ships received the supplies and services needed to maintain readiness. 19 From July 2010 to May 2012, 20 FLC Yokosuka, where he was responsible for meeting the logistical need 21 of ships in the region. 22 the Executive Officer for FLC Yokosuka, where he oversaw operational an 23 administrative matters within FLC Yokosuka and FLC Singapore. 24 utilized 25 referred to by the following nicknames: "J," "Lion King, Jr.," and "Tro 26 Smith." 27 28 17. the Deputy Logistics Officer. email role, Sanchez, wh Sanchez was the Director of Operations fo From May 2012 to April 2013, Sanchez served as address, Daniel Dusek, In this navy94@cooltoad.com and . in Sanchez emails was charged elsewhere, was a Commander in the U.S. Navy serving from on or about January 11, 2009 to on or about February 24, 6 . . ~ 1 2011, as the Deputy Director of Operations for the Seventh Fleet, aboar 2 the U.S. S. Blue Ridge. 3 March 15, 2012, Dusek was assigned as the Executive Officer of the U.S.S. 4 Essex. 5 Dusek served as the Executive Officer of the U.S.S. Bonhomme Richard, a 6 which time, Dusek was promoted to Captain and the Commanding Officer, 7 where he served until October 2, 2013, when he was relieved of command. 9 2011 to on or abou From on or about April 23, 2012 to on or about June 29, 18. 8 From on or about May 12, 2012, AG was a member of the Royal Australian Navy, who from Novembe 2007 to January 2010 was seconded to the U.S. Navy as the Royal Australia 10 Navy Liaison Officer to the Seventh Fleet. 11 served aboard the U.S.S. Blue Ridge alongside his U.S. Navy counterparts, 12 planning joint operations and exercises between the United States an 13 Australia. 19. 14 As the Liaison Officer, A Michael Brooks, charged elsewhere, was a Captain in the U.S. 15 Navy, who, from June 2006 to July 2008, served as the United States Naval 16 Attache ("NATT") in Manila, Philippines. 17 as the U.S. Navy representative of the Secretary of Defense, the Chairma 18 of the Joint Chiefs of Staff, and the United Forces of the United States 19 in Manila, as well as the U.S. Navy military advisor to the United State 20 Ambassador. Defendants In this position, Brooks serve 21 20. 22 LAUSMAN, 23 and Brooks were "public officials" within the definition of Title 18, 24 United States Code, Section 201(a) (1). SHEDD, NEWLAND, HERRERA, DEGUZMAN, and GORSUCH, DOLAN, HORNBECK, LOVELESS, and conspirators Sanchez, Duse 25 D. Official Duties 26 21. Defendants, as officers in the U.S. Navy, had and were assigne 27 various official duties, 28 the including, but not limited to those found i United States Navy Regulations; 7 Department of Defense Directiv , .. • 1 ( "DoDD") 5500. 07 2 Regulations), 3 (Standards of Ethical Conduct for Employees of the Executive Branch), 4 and 5 C.F.R. 5 Employees 6 (Principles of Ethical Conduct). of (Standards of Conduct), and supplements Part 3601 22. 8 Navy include 9 their authority extends, including 5 C.F.R. Part 2625 (Supplemental Standards of Ethical Conduct fo the Department 7 thereto, DoDD 5500. 07-R (Joint Ethics of Defense); and Executive Order 12674 Among many others, the official duties of Officers in the U.S. (1) acquainting themselves with, enforcing the laws, obeying and, regulations, so and 10 relating to the Department of the Navy; 11 discharging the duties of their offices to the best of their ability i 12 conformance 13 profession of the oath of office (Article 1130); (3) requiring themselves 14 to show a good example of virtue, honor, patriotism, and subordination; 15 to be vigilant in inspecting the conduct of all persons who are place 16 under their command; 17 immoral practices, and to correct, according to the laws and regulation 18 of the U.S. 19 necessary and proper measures, under the laws, regulations and custom 20 of the naval services, to promote and safeguard the morale, the physical 21 well-being and the general welfare of the officers and enlisted person 22 under their command or charge (Article 1131); 23 possible to superior authority all offenses under the Uniform Code of 24 Military Justice 25 1137); 26 Defense and Secretary of the Navy regarding the Standards of Conduct 27 Government (5) with Navy, existing orders and (2) faithfully and truthfull regulations and their to guard against and suppress all dissolute an al 1 persons who are gui 1 ty of them; ( "UCMJ") (4) and take al 1 reporting as soon a which come under their observation (Articl complying with all directives issued by the Secretary o Ethics (Article 1110); and 28 8 (6) reporting in writing an I • 1 fraudulent, 2 (Article 1115). 3 23. collusion, or improper conduct by a U.S. Navy contracto To perform their duties, the defendants all held "Secret" o 4 "Top Secret" clearances as a prerequisite to handling various types o 5 classified information. 6 duties of U.S. Navy Officers in the handling of classified information, 7 including 8 individuals having access to classified information must promptly repor 9 to their security office: any unauthorized disclosure to any person o 10 classified information or of other information, disclosure of which i 11 prohibited by Statute, Executive Order, 12 disregard 13 (C2.2.1.7); 14 omission or commission that indicate poor judgment, unreliability, 15 untrustworthiness (C2.2.l.9); any vulnerability to coercion, influence, 16 or pressure that may cause conduct contrary to the national interes 17 (C2.2.1.11); and any acts of sexual misconduct or perversion indicativ 18 of moral turpitude, 19 society (C2.2.l.17). Co-workers shoulder an equal official duty to report 20 when "they become aware of information with potentially serious securit 21 significance regarding someone with access to classified information" i 22 a sensitive position (C9.l.5). 23 24. DoDD of Additional regulations prescribe the official 5200.02r, public which law, requires Statute, among other or Regulation Executive duties tha (C2.2.l.5); th Order, or Regulatio any criminal or dishonest conduct (C2.2.1.8); any acts o o poor judgment or lack of regard for the laws o DoDD 5240.06 prescribes the official duties of Department of 24 Defense personnel, 25 counterintelligence 26 personnel 27 indicators, 28 threats must and against including awareness report and DOD, as defendants enumerated potential its herein, reporting. certain behaviors the the particular, contacts, foreign personnel, 9 In related DO activities, intelligence information, t entit materiel, I . . 1 facilities, and activities or against U.S. national security. 2 reporting obligations inure to the following activities, among others: 3 any improper handling or disclosure of classified information; attempt 4 to 5 blackmail or extortion; attempts to entice DOD personnel into situations 6 that could place the~ in a compromising position; and attempts to plac 7 DOD personnel under obligation through special treatment, favors, gifts, 8 or money. 9 10 entice co-workers into criminal situations that Mandato could E. The Glenn Defense Marine Asia (QGDMA") Conspirators 25. Glenn Defense Marine Asia ( "GDMA") was a lead t corporatio 11 headquartered in Singapore, with operating locations in Japan, Thailand, 12 Malaysia, Korea, Hong Kong, Indonesia, Australia, Philippines, and th 13 United States. 14 vessels, a service it had provided across the Seventh Fleet's AOR unde 15 various contracts with the U.S. Navy for over 25 years. 16 involves 17 procurement of items and services required by ships and submarines whe 18 those vessels arrive at port. 19 included, 20 fees; security; food; fuel; water; trash removal; collection, holding, 21 and transfer of liquid waste ( "CHT") ; and transportation. 26. 22 the GDMA's main business involved the "husbanding" of marin coordinating, among others, Leonard Glenn scheduling, and "Ship husbanding" direct tugboats; fenders; Francis, charged port authority or custom elsewhere, President and CEO of GDMA. ·a Malaysia, was the owner, 24 the 25 Leonard@glennmarinegroup.com 26 following nicknames: "Lion King," "LK," and "Boss." 27 residence was within the Southern District of California. addresses indirec Examples of these items and service 23 email and citizen of Francis utilize Leonard.Glenn.Francis@gmail.com and in emails 28 10 was referred to by the Francis' s last kno a ... 1 2 27. the Vice President of Global Operations for GDMA. 3 4 Neil Peterson, charged elsewhere, a citizen of Malaysia, was 28. Alex Wisidagama, charged elsewhere, a citizen of Singapore, was the General Manager for Global Government Contracts for GDMA. 29. 5 Beginning at least as early as 2004 and continuing to in o 6 about September 2013, Francis, Peterson, Wisidagama, Aruffo, and other 7 participated in a scheme to defraud the U.S. Navy by over-billing o 8 GDMA's husbanding contracts. 9 losses of tens of millions of dollars. 10 11 30. Francis and Wisidagama, among others, were arrested on or abou September 17, 2013, in San Diego, California. 12 COUNT 1 - Conspiracy (18 U.S.C. § 371) 13 14 The scheme caused the U.S. Navy to sustai 31. Paragraphs 1 through 30 of this Indictment are re-alleged an incorporated by reference. 15 32. Beginning in or about jurisdiction of February 2006 on the high seas an 16 outside the 17 through at least February 2014, defendants DAVID NEWLAND, aka "Newly," 18 ENRICO DEGUZMAN, aka "Rick," DONALD HORNBECK, aka "Bubbles," JAMES DOLAN, 19 aka "JD," BRUCE LOVELESS, DAVID LAUSMAN, aka "Too Tall," STEVEN SHEDD, 20 MARIO 21 (collectively "the defendants") did knowingly and intentionally conspir 22 and agree with each other and with others, 23 AG, Brooks, Sanchez, and Dusek, to commit an offense against the Unite 24 States, namely bribery; that is, 25 agreed 26 performance of official acts and being induced to do and omit to do act 27 in violation of their official duties, 28 defendants to be so influenced and induced, HERRERA, that, in aka any particular district, "Choke, return for aka the Choke OIC," and and continuin ROBERT GORSUC including Francis, Aruffo, (1) the defendants and others knowingl defendants 11 being influenced in th and aiding and abetting othe (a) Francis and others woul • • 1 directly and indirectly, corruptly give, offer, and promise things of 2 value to the defendants, collectively and individually, including meals, 3 entertainment, travel and hotel expenses, gifts, cash, and the service 4 of prostitutes, and (b) 5 would directly and indirectly, corruptly demand, seek, receive, accept, the defendants, collectively and individually, 6 and agree to receive and accept these things of value personally and fo 7 other persons; 8 furtherance of this conspiracy, in violation of Title 18, United State g Code, 10 and (2) the defendants and others took overt acts i Section 201 (b) (2) (A) and (C), and Title 18, United States Code, Section 2. 11 OBJECTS OF THE CONSPIRACY 33. 12 It was an object of the conspiracy for the defendants to . 13 their official positions and individual and combined influence in 14 U.S. Navy to perform official acts; to exert pressure on other official 15 to perform official 16 officials, knowing and intending that such advocacy and advice would fo 17 the basis for their official acts; all to advance GDMA's interests, a 18 questions, matters, and controversies regarding GDMA's ship husbandin 19 business were brought to the defendants' attention. 20 and others would offer and give a stream of benefits to or on behalf of 21 the 22 entertainment, travel and hotel expenses, gifts, cash, and the service 23 of prostitutes. 24 defendants, 34. acts; including, and to among advocate other before things and advise In return, Francis of value, meals, It was a further object of the conspiracy for the defendants 25 to do and omit to do acts in violation of their individual and collectiv 26 official duties, 27 stream of benefits to or on behalf of the defendants, and in return, Francis and others offered and gave 28 12 including meals, .. 1 entertainment, travel and hotel expenses, gifts, cash, and the services 2 of prostitutes. 3 MANNERS AND MEANS OF THE CONSPIRACY 35. 4 In furtherance of this . conspiracy, and to accomplish it 5 objects, various conspirators at various times used the following manners 6 and means, among others: a. 7 Francis offered and gave a stream of benefits to and o 8 behalf of the defendants, 9 hotel expenses, gifts, cash, and the services of prostitutes. b. 10 including meals, entertainment, Defendants sought, received, and accepted these things o 11 value 12 expenses, gifts, cash, and the services of prostitutes. 13 from Francis, C. travel an including meals, Defendants entertainment, further sought travel and hotel from Francis employment wit 14 GDMA after their retirement from the U.S. Navy, though no defendant wa 15 ultimately hired by GDMA. 16 d. In return for this stream of benefits from Francis, 17 defendants agreed to perform official acts; to exert pressure on othe 18 officials to perform official acts; and to advocate before and advis 19 other officials, 20 would form the basis 21 interests as questions, 22 husbanding business were brought to defendants' attention. 23 e. knowing and intending that such advocacy and advic for their official acts; matters, Defendants all to advance GDMA' and controversies regarding its shi informed Francis of planned U. s. Navy shi 24 movements by providing Francis with classified U.S. Navy ship schedules 25 and narrative summaries of those schedules. 26 f. 27 U.S. Navy information. Defendants provided Francis 28 13 with internal, proprietar .. g. 1 Defendants took official acts and exerted pressure on, 2 advocated before, and provided advice to other U.S. Navy officials, 3 knowing and intending that such advocacy and advice would form the basi 4 for such other officials' decisions to direct ships to ports that wer s more lucrative for Francis and GDMA. h. 6 Defendants took official acts and exerted pressure on, 7 advocated before, 8 knowing and intending that such advocacy and advice would form the basi 9 for such other officials' decisions on which husbanding services and i 10 and provided advice to other U.S. Navy officials, what amounts to purchase from GDMA. . 11 i. Defendants authored and signed and arranged for other U.S . 12 Navy officers to author and sign letters and communications praisin 13 GDMA's performance of husbanding services. . 14 J. Defendants took official acts and exerted pressure on, 15 advocated before, 16 knowing and intending that such advocacy and advice would form the basi 17 for 18 inflated 19 suppress competition in contract awards, 20 other questions, matters, and controversies regarding GDMA's husbandin 21 business. such other officials' invoices, k. 22 and provided advice In quash return decisions to other U.S. to bid protests for this pay GDMA' s filed by Navy officials, claims, GDMA's over loo competitors, and resolve in GDMA's favo stream of benefits from Francis, 23 defendants were also induced to do and omit to do acts in violation of 24 their 25 failing to report others' 26 contractor, a prohibited source; failing to guard against and suppress 27 and correct dissolute and 28 safeguard the morale, physical well-being, and general welfare of othe official duties, including, among many others, . . receiving receipt of .things of value from a immoral 14 practices; failing an defens to promote an . ., 1 U.S. Navy Officers; engaging in and failing to report violations of th 2 UCMJ; and failing to report fraudulent and improper conduct by a U.S. 3 Navy contractor. In 1. 4 return for this stream of benefits from Francis, s defendants were also induced to do and omit to do acts in violation of 6 their official duties with respect to classified information, including, 7 engaging in and failing to report acts of omission or commission tha 8 indicate poor judgment, unreliability, or untrustworthiness; failing t 9 report vulnerability to coercion, influence, or pressure that may caus 10 conduct contrary to the national interests, and engaging in and failin 11 to report others' acts of sexual misconduct or perversion indicative of 12 moral turpitude, poor j udgrnent or lack of regard for the laws of society. m. 13 In return for this stream of benefits from Francis, 14 defendants were also induced to do and omit to do acts in violation of 15 their official 16 including engaging in and failing to report others' 17 and disclosure of classified information; 18 report attempts to entice co-workers into criminal situations that coul 19 lead 20 attempts to entice DOD personnel into situations that could place the 21 in a compromising position; and failing to report attempts to place DO 22 personnel under obligation through special treatment, favors, gifts, o 23 money. to blackmail n. 24 duties or with respect extortion; Defendants to foreign threats, . improper engaging in and failing t engaging identified, intelligence in and vetted, failing to and carefully recruite 25 members to the conspiracy for their perceived discretion as well as thei 26 ability to perform official acts and exert pressure on, advocate before, 27 and 28 controversies provide advice to other regarding GDMA' s officials on questions, ship husbanding business, 15 matters, an knowing an 1 intending that such advocacy and advice would form the basis for sue 2 other officials' decisions. 4 Defendants o. 3 referred to themselves collectively, a various times in the conspiracy, by terms such as "the Cool Kids," "th s Band of Brothers," "the Brotherhood," "the Wolfpack," the "familia," an 6 "the Lion King's Harem," among others. Defendants sought to conceal their corrupt relationshi p. 7 a with Francis by communicating with Francis using private email accounts, 9 rather than their U.S. Navy accounts. Defendants further sought to conceal 10 q. 11 relationship 12 foreign-based 13 names, such as· Thomas A. Anderson and Troy Smith. with email by service Defendants r. 14 Francis establishing provider and their email accounts cooltoad.com, conspirators their using corrup with th fictitiou further sought t 15 conceal and cover up their corrupt relationship by, at times, creatin 16 fraudulent 17 Francis, though, in fact, defendants paid Francis nothing for the thin 18 of value or paid a mere token amount known to be a small fraction of th 19 worth of the thing ·of value. "receipts" s. 20 for things Defendants and of value provided to defendants their conspirators sought to b impede, 21 obstruct and influence any inquiry or investigation into the nature an 22 extent of their corrupt relationship by destroying evidence, 23 a computer hard drive taken from the U.S.S. George Washington, deletin 24 email accounts, and making false statements to Special Agents from th 25 Naval 26 Investigative Service ("DCIS"). 27 II 28 II Criminal Investigative Service 16 ( "NCIS") and Defense Criminal . I' OVERT ACTS 1 2 3 36. In furtherance of the conspiracy and to effect its objects, the following overt acts, among others, were committed: Al. 4 On or about February 16, the Seventh Fleet Judg 5 Advocate General 6 officers of the Seventh Fleet advising them as to the ethics regulation 7 pertinent 8 regulations specific to receiving gifts from a defense contractor, lik 9 GDMA, which was a prohibited source. to ("JAG") 2006, circulated an ethics message to all receiving gifts l·O ethics message to Francis, 11 relationship a secret. 12 A2. in foreign ports, including senio thos NEWLAND told Aruffo to forward thi so that Francis would know to keep thei The next day, on or about February 17, 2006, during th 13 U.S.S. Blue Ridge's port visit to Hong Kong, NEWLAND, DEGUZMAN, GORSUCH, 14 and others dined and drank at Francis's expense at the Petrus Restauran 15 in Hong Kong at a cost to Francis of $20,435 USD. 16 NEWLAND and DEGUZMAN also stayed in accommodations at the Shangri-L 17 Hotel paid for, 18 corrupt relationship, Francis created fraudulent receipts for the Petru 19 dinner in an amount that defendants knew was a small fraction of th 20 actual cost of the dinner. 21 A3. in part, by Francis. While in Hong Kong, To conceal and cover up thei On or about March 8, 2006, Francis sent Aruffo and NEWLAN 22 an email asking NEWLAND to arrange for the Seventh Fleet's Commandin 23 Vice Admiral 24 included exemplar letters from other Admirals as attachments. 25 responded on March 8, 2006: "[C]an do[,] easy!" 26 Commanding Vice Admiral signed the letter for Francis. 27 28 A4. to sign a "bravo zulu" letter praising GDMA. On March On or about March 9, 2006, during the U.S.S. Blue Ridge' port visit to Singapore, NEWLAND, DEGUZMAN, 17 GORSUCH, and others dine .. . 1 with Francis at the Jaan Restaurant in Singapore. 2 defendants NEWLAND, DEGUZMAN, GORSUCH, and others enjoyed cocktails o 3 the exclusive helipad on the roof. 4 enjoyed foi gras terrine, At dinner, duck leg confit, Prior to dinner, defendants and other ox-tail soup, and roaste s Chilean sea bass, paired with expensive wine and champagne, followed b 6 digestifs and cigars, 7 $600 per bottle) and Paradis Extra (approximately $2000 per boitl~}, an 8 Cohiba Cigars ($2000 per box}. AS. 9 namely, Hennessy Private Reserve (approximatel On or about' April 4, 2006, Francis sent HORNBECK -- wh 10 could exert influence at CTF70 over ships, like the U.S. S. Abraha 11 Lincoln, that were transiting through the Seventh Fleet AOR -- an email 12 asking HORNBECK to exert pressure on and provide advice to other U.S. 13 Navy officials to send the U.S. S. Abraham Lincoln to port in Laem Chabang, 14 Thailand. 15 San Diego and added: 16 don't hesitate to· ask." 17 A6. HORNBECK responded by asking Francis if GDMA was hiring i "[I] f there is anything I can do for you, pleas On or about April 6, 2006, Francis sent NEWLAND an emai 18 criticizing the U.S. Navy's decision to require several escort ships 19 assigned to the Abraham Lincoln Carrier Strike Group ( "ALSG") to dock a 20 anchor at Sattahip, Thailand, rather than directing them to dock piersid 21 in Laem Chabang: 22 has told me that the 23 pierside in [Laem Chabang]. 24 escorts may be going to Sattahip? 25 send them to anchor 26 destroyers all pier side in [Laem Chabang]? 27 with your staff if we can make the right decision and have them in [Lae 28 Chabang] . " "I am in HKong with the ALSG, [logistics request] the [aircraft carrier] will go out by Monday, tog That is great, however I was told that th Why are we making life difficult t in Sattahip when we 18 can berth the cruiser an [C]ould you kindly chec • • I A7. 1 NEWLAND replied that 2 providing advice to other U.S. 3 Francis' s request: 4 will be approved pierside. 5 of the escorts out [at anchor]. A8. 6 he was exerting pressure on an Navy officials in an effort to gran "[W] e just heard that [the U.S. S. Abraham Lincoln] Country team is pushing to spread the res We're not done yet!" On or about April 10, 2006, NEWLAND wrote Francis t 7 confirm that his efforts were successful and that the U.S. 8 allowing all the ships in the ALSG to dock pierside: "[J]ust got officia 9 word, everybody is approved into Laem Chabang. Congrats." Navy wa In fact, fro 10 April 19-26, 2006 the ALSG made a port visit to Laem Chabang, Thailand, 11 serviced by GDMA, during which the U.S.S. Abraham Lincoln and all thre 12 escort ships docked pierside at Laem Chabang, 13 U.S. Navy of $1,910,575. A9. 14 On April 29, 2006, at a total cost to th Francis wrote to NEWLAND: "[L] et' 15 start send[ing] more ships there [Laem Chabang] as we have all the pie 16 space to accommodate 2 [strike groups]. 17 [Thailand] . . . [J]ust keep sending them over to Laem Chabang." 18 email, 19 [AB, a FISC official]" in Yokosuka, Japan. 20 . Don't send ships to Phuke In thi Francis also asked NEWLAND to "put in a good word for me wit AlO. On or about May 2, 2006, NEWLAND emailed Francis to advis 21 that an amphibious group would be docking in Laem Chabang, not Sattahip, 22 Thailand, and commented: "[G] ood news." 23 All. On or about May 3, 2006, NEWLAND sent Francis an email 24 advising that the Ronald Reagan Carrier Strike Group would be docking a 25 Laem Chabang, Thailand later that summer. 26 A12. In an email dated on or about July 4, 2006, HORNBECK aske 27 Francis to throw a "wetting down" -- a raucous ceremony for newly promote 28 officers - - for HORNBECK, who had just been promoted to Captain, 19 an 75 other people. (The wetting-down celebration . 1 approximately 2 customarily paid for 3 invites his friends. 4 between his pay at his old rank and his pay at the new rank on the ba 5 tab for his guests.) 6 party, 7 Singapore. 8 9 and hosted by the newly promoted officer, 1 wh It is usual for the officer to spend the differenc In HORNBECK' s case, held on July 26, Francis paid for the entir 2006 at the Long Bar, in the Raffles Hotel, Al3. On or about August 12, 2006, Francis sent NEWLAND an emai asking, "[A]ny plans for the [U.S.S. Blue Ridge] to visit Indonesia i 10 the near future and a pierside visit to Phuket?" 11 NEWLAND responded on the same day: 12 still need to work some issues. 13 port call in Indonesia. "I'm hoping for pierside in Phuket, . " We are planning a I'll let you know the particulars later." Al4. In an email on August 16, 14 [Blue Ridge] 2006, Francis suggested t 15 HORNBECK that the U.S. Navy re-route the U.S.S. Lassen from Phuket, t 16 Laem Chabang, Thai 1 and. 17 "just pushed a 18 Chabang] with us [the U.S. S. Kitty Hawk] . " request HORNBECK responded later the same day that h for [the U.S. S. AlS. On or about September 9, 19 Lassen] 2006, to also go to NEWLAND, DEGUZMAN, [Lae an 20 others dined with Francis at Francis's expense at the New York Grilli 21 Tokyo, Japan, and stayed at Francis's expense at the Park Hyatt Hotel, 22 at total cost to Francis of approximately $30,000. Al6. On or about October 20, 23 2006, LAUSMAN notified Franci 24 that he would be on vacation at the Grand Hyatt, Hong Kong. 25 day, 26 GDMA' s expense because LAUSMAN was "standing by to assist with" ensurin 27 that the U.S.S. Kitty Hawk would dock pierside in Hong Kong. Francis instructed a GDMA employee to upgrade LAUSMAN' s 28 20 The nex room at . • •• 1 Al7. On or about October 27, 2006, Francis forwarded LAUS~.~--·· 2 additional information about the U.S.S. Kitty Hawk berthing pierside 3 Hong Kong. 4 stay in Kowloon 5 going to be in Kowloon. " 6 In the email, Francis also asked LAUSMAN if he wanted (as opposed to Hong Kong) "because all the ships ar Al8. On or about October 27, 2006, Francis forwarded NEW 7 confirmation that a pierside berthing was available for the U.S.S. Kitt 8 Hawk in Hong Kong, but that Francis needed an official request from th 9 U.S. Navy to berth the ship pierside. NEWLAND responded the same day: 10 "Copy, will work from here." 11 berth pierside in Hong Kong, though LAUSMAN did receive from GDMA a hote 12 room upgrade at the Grand Hyatt. 13 Ultimately the U.S.S. Kitty Hawk did no A19. On or about December 19, 2006, NEWLAND forwarded Franci 14 an internal U.S. Navy email in which a supply officer for the U.S. Na 15 in Hong Kong was advocating against allowing the U.S.S. Blue Ridge t 16 dock pierside in Hong Kong. 17 officer] 18 NEWLAND expressly asked where to direct his advocacy: "Who do I need t 19 talk to get pierside in Hong Kong?" NEWLAND observed: "[L] ooks like [the suppl is going to be difficult again." A20. On or about January 2, 20 2007, Later in the email string, DEGUZMAN emailed Francis, 21 noting that he "just spoke to [NEWLAND] re [Hong Kong] . 22 will speak to the right people once he gets a few more info tidbits. 23 passed all the info you told me re the terminal." A21. On or about January 4, 24 I think that h 2007, NEWLAND wrote an email t 25 Francis advising that he told the Naval Attache in Hong Kong that a Vic 26 Admiral preferred to have the U.S.S. Blue Ridge dock pierside in Hon 27 Kong: 28 wants to be pierside in HK somewhere .... " "I've written [the Attache], 21 I [and]. told him [the Vice Admiral] •• 1 A22. The next day, Francis suggested to NEWLAND that the U.S. 2 Navy dock the U.S.S. Rentz pierside in Hong Kong "as a test case befor 3 the Blue Ridge arrives." 4 me know if OLA [Naval Attache Hong Kong] interferes." 5 NEWLAND sought a hotel room from Francis, noting that he and his wif 6 "would love to stay at the 7 [U.S.S. Blue Ridge] winds up." 8 9 NEWLAND concurred, and invited Francis to "le A23. On or about [Shangri-La Hotel] January In the same email, closest to wherever th 8 and 10, 2007, Francis emaile NEWLAND to ask for NEWLAND' s help in resolving a bid protest lodged b 10 a GDMA 11 Philippines. 12 up in [the Philippines]. 13 know [DEGUZMAN] has some ambitious plans that depend on you." 14 competitor regarding GDMA' s husbanding contract in th NEWLAND responded: "I'll ask [AB, a FISC official] what' We need you in charge for our visit. As yo A24. On or about January 10, 2007, Francis instructed a GD 15 employee: 16 La for COS [Chief of Staff] and wife, David . . . Newland a Harbor [V]ie 17 Suite, " to which the employee responded: "HV [Harbor View] suites cost 18 an arm and a neck!" 19 "Kindly make reservations for 3 Rooms at the Island Shangri- A25. As a result of the in or about January 2007, bid protest the U.S. lodged by GDMA' 20 competitor, Navy suspended GDMA' 21 contract to provide husbanding services to all U.S. Navy vessels in the 22 Philippines and began the process 23 services in the Philippines on an ad hoc basis. On or about January 12, 24 2007, 25 NEWLAND attempt to advocate before and advise AB, a FISC official, 26 lift the contract suspension that resulted from the bid protest lodge 27 by to award contracts Francis emailed NEWLAND, with a copy to Aruffo, GDMA' s competitor: "Additional 28 22 pressure from 7th for husbandin to request that Fleet to t FIS .J 1 Yokosuka's [Commanding 2 extremely helpful." Officer] to vacate the suspension would b A26. On or about January 22, 2007, Francis emailed NEWLAND t 3 4 advise that "FISC is considering to award the upcoming 3 [Philippine] 5 port visits to [GDMA' s competitor] . " 6 is AFU 7 Philippi~es] and we all know it. We're doing all we can but it's up t 8 FISC who we have no control over. We'll keep pushing but this stinks of g internal politics." [all fucked up] . NEWLAND responded: "Leonard, Thi We need GDMA in the RP Later that day, [Republic of NEWLAND emailed Francis to say: 10 "Just got word that a decision has been made. 11 in 12 "Leonard, Aloha; 13 we'll continue to do business w/ you. 14 paper. Congratulations and TERIMAH KASIH for all your efforts. [the 15 Philippines] . " In an email th the GDMA will have the contrac same just saw the GAO ruling re day, DEGUZMAN added: [the Philippines] ; gues I was all spun up until R/Rick". A27. On or about February 2, 2007, the Seventh Fleet JAG agai 16 circulated an ethics message to all senior officers of the Seventh Fleet, 17 including NEWLAND, DEGUZMAN, SHEDD, and others advising them as to th 18 ethics 19 including those regulations forbidding receiving gifts from a def ens regulations pertinent to receiving gifts in foreign ports, 2 o contractor, 1 ike GDMA. 21 A28. Incident to a port visit by the U.S.S. Blue Ridge in Hon 22 Kong on or about 23 arranged for a seven-course dinner at Gaddi's in The Peninsula Hotel fo 24 a small group of Seventh Fleet -senior officers and their wives, for whic 25 Francis paid the bill and provided the wine, though neither Francis no 26 any other GDMA employee attended. 27 28 February 2-5, A29. In Hong Kong, 2007, at NEWLAND's request, Franci Francis also provided NEWLAND and other with lavish hotel rooms and other things of value. 23 A30. Incident to a port visit by the U.S.S. Blue Ridge and t 1 2 celebrate GDMA's award of the husbanding contract for the Philippines, 3 on or about February 8-10, 2007, Francis hosted and paid for a lavis 4 party and the services of prostitutes in the MacArthur Suite of th 5 Manila Hotel, 6 historical memorabilia related to General Douglas MacArthur were used b 7 the participants in sexual acts. among others. During the party, A31. During the port visit by the U.S.S. Blue Ridge in Cebu, 8 9 attended by NEWLAND, Philippines on or about February 11-14, 2007, NEWLAND and others staye 10 at the Shangri-La Hotel Cebu at Francis's expense. Francis also pai 11 for prostitutes for several U.S. Navy Officers, including a prostitut 12 delivered by Aruffo to NEWLAND' s hotel room. On February 14, 13 NEWLAND sent Francis an email in which he acknowledged: 14 your hospitality in Cebu." 2007, "Thank you fo 15 A32. On or about February 14, 2007, referencing the U.S.S. Blu 16 Ridge's upcoming port visit to Singapore, NEWLAND sent an email to Aruff 17 noting his proposed itinerary: "We want to do Sunday brunch at Raffle 18 Hotel around 1000 or 1100. 19 great. Some kind of show or tour on Friday would b Save Monday just for the two of us [NEWLAND and his wife]. The 2 o shopping, shopping, shopping." 21 A33. During the U.S.S. Blue Ridge's port visit to Singapor 22 from about February 22-27, 2007, Francis paid for the hotel expenses fo 23 NEWLAND, DEGUZMAN, GORSUCH, Aruffo, and others at the Shangri-La Hotel, 24 Singapore at a total cost to Francis of approximately $50,000. 25 A34. On or about February 23, 2007, during the U.S. S. Blu 26 Ridge's port visit to Singapore, NEWLAND, DEGUZMAN, Aruffo, and others 27 dined with Francis at Francis's expense at the Blu Restaurant within th 28 Shangri-La Hotel, Singapore. 24 .... 1 A35. On or about February 24, 2007 during the U.S. S. Blu 2 Ridge's port visit to Singapore, NEWLAND, DEGUZMAN, HORNBECK, GORSUCH, 3 Aruffo, and others attended a cocktail reception hosted by Francis o 4 the helipad of the Jaan Restaurant atop the Shangri-La Hotel, followe 5 by an extravagant dinner and live entertainment. 6 7 8 A36. On or about February 26, 2007, Francis hosted and pai for dinner at Nadaman's in Singapore for NEWLAND, Aruffo and others. A37. On or about March 1, 2007, DEGUZMAN forwarded to Franci 9 an internal U.S. Government email in which a State Department official 10 complained about an incident involving GDMA personnel during the U.S.S. 11 Blue Ridge port visit to General Santos City, Philippines. 12 of the email, 13 control the Glenn Marine way to minimize." In a separate email of March 1, 14 DEGUZMAN advocated to many U.S. 15 blame instead with local Filipino personnel. 16 DEGUZMAN advised Francis: In the bod "Recommend some quick damag officials in defense of GDMA, layin A38. Starting the same day, from on or about March 1-5, 2007, 17 incident to a 18 Malaysia, Francis paid for lavish hotel rooms at the Shangri-La Kual 19 Lumpur for NEWLAND, DEGUZMAN, GORSUCH, Aruffo, and others. 20 port visit by the U.S. S. Blue Ridge to Kuala Lumpur, A39. On or about March 6, 2007, Francis sent DEGUZMAN an email 21 complaining about the Military Sealift Command using a GDMA competito 22 as a husbanding agent. 23 Seventh Fleet Officer] 24 have to play nice w/[a competitor in the Philippines]." 25 DEGUZMAN responded: " [ C] opy. Like I said, [ is going to try to fix it later but for now A40. On or about March 13, 2007, NEWLAND advised Francis of 26 the U.S.S. Dubuque's upcoming port visits to India. 27 Aruffo emailed Francis to plan a dinner in Tokyo. 28 that NEWLAND had requested ,fine wine. 25 Later that same day, Aruffo advised Franci 1 A41. On or about March 24, 2007, NEWLAND, DEGUZMAN, HORNBECK, 2 and Aruffo attended a multi-course dinner hosted by Francis at the Oa 3 Door in Tokyo, Japan, during which was served, at Francis's expense, foi 4 gras, Lobster Thermidor, and Sendai Tenderloin, and for dessert, "Libert 5 Sauvage," the winning cake of the 10th Coupe du Monde de la Patisseri 6 2007, followed by cognac and cigars. 7 champagne or wine. 8 wearing custom-made GDMA neckties that Francis had given them as gifts. Each course was paired with fin During the event, the attendees posed for photograph 9 A42. On or about March 26, 2007, DEGUZMAN sent Francis an emai 10 thanking him for his "hospitality, kindness and the gifts" and advisin 11 that DEGUZMAN and his family would be traveling to the Philippines th 12 next month. 13 you in [the Philippines]. 14 would like you and [your wife] to join me. 15 dates for Manila and Cebu and I will take care of the arrangements." 16 Later in the email, 17 himself to a FISC official whose office was tasked with administerin 18 GDMA' s husbanding contracts: "On another note I need to warm up ·to [AB, 19 a FISC official] to move on and build a solid working relationship . . 20 21 II Francis responded: "I am looking forward to meeting up wit As discussed I will be at the Shangri-La an Please provide your arriva Francis enlisted DEGUZMAN' s help in ingratiatin Francis mused to DEGUZMAN: "I hope [your wife] can be my PR Manage and get us [Francis and AB] together during the next visit to Tokyo." 22 A43. DEGUZMAN responded via email the same [in the Philippines]; however, day: "We 23 initially booked rooms 24 likes the Shangri La and if we could get a corporate rate, we would lik 25 to stay at the Shangri La in Manila and/or Cebu." ... "I think [my wife] 26 could arrange something w/ [AB' s wife] . 27 things." (Emphasis in the original) . 28 26 [my wife] hav reall She's very good at 'arranging' 1 A44. In a further effort to recruit AB, the FISC official, int 2 the conspiracy, DEGUZMAN, his wife, Aruffo, Francis and others develope 3 and implemented a "shaping op [eration] . " 4 wrote to Aruffo: "Ed san, Domo [thank you] for the tuna. 5 tuna to 6 Francis, adding, "Beginning our 'shaping' OP, dropped off a chunk of tun 7 that I bought in General Santos [City] for [DEGUZMAN's wife] to drop of 8 with [AB's wife]." 9 [AB' s wife] for 'shaping. '" A45. On April 5-7, On March 30, 2007, DEGUZ~.~~~Got the othe Aruffo forwarded the message t 2007 DEGUZMAN and his wife stayed at th 10 Makati Shangri-La, traveling from there to Cebu, Philippines, where the 11 stayed from April 8-11, 2007 at the Shangri-La Mactan Resort and Spa, 12 all ultimately at Francis's expense. 13 A46. On or about April 7, 2007, DEGUZMAN emailed Francis t 14 advise that DEGUZMAN paid for his room: "FYI, I paid the Makati Shangri- 15 La (P$37,194) for the room here. 16 Marine did not get charged for it." 17 competitor in the Philippines] 18 gets to some interested folks." 19 oversight by the Staff of the Makati Shangri-La for charging your credi 20 card. 21 into your card account. " 22 fact, 23 subsequently paid for by Francis. 24 at the 25 for payment there." 26 [the GDMA competitor in the Philippines] 27 would be appreciated." I just wanted to make sure that Gle "The info you sent me re is very interesting. I'll make sure Francis responded, " [T] here was They have assured me that it will be reversed and credited bac reversed, and the The charges to DEGUZMAN' s credit card were, i hotel room at the Makati Shangri-La Francis assured DEGUZMAN, "The [M] actan Shangri-La is confirmed and you won't have Francis continued: "[A]nything you can 28 27 with the [i]ntel .' A47. On 1 or about April 17, 2007, DEGUZMAN confirmed wit 2 Francis that he had passed the information about the GDMA competitor i 3 the Philippines on to NCIS, noting, 4 alleged excessive charges against the Navy." "they know about it as well as th s A48. On or about April 19, 2007, Francis emailed DEGUZMAN: "0 6 another note it seems SUBGRU7 [Submarine Group 7] is considering sendin 7 one of their assets to Subic [Bay, Philippines]. 8 somewhere but Subic please." 9 w/an alternative, we can get SUBGRU to buy off on it." [B] ad Idea. Send i DEGUZMAN responded, "I think if we come u 10 A49. On or about April 22, 2007, DEGUZMAN again emailed Franci 11 to assure him: "Copy all your past email re FISC and Subic. We' 11 fin 12 alternatives until 'Leonard's World' is fixed." A50. In or about April 2007, 13 at HORNBECK' s request, Franci 14 arranged for one of HORNBECK's relatives to receive a culinary internshi 15 at 16 Lumpur, 17 2007, Francis paid the relative's living expenses at a total cost of a 18 least $13,000. 19 the Chalet Suisse Restaurant, Malaysia. within the Equatorial Hotel, During the internship, Kual from August 28-0ctober 23, A51. On or about May 9, 2007, DEGUZMAN emailed Francis, 20 SHEDD by way of introduction, and noting that SHEDD "wants to introduc 21 other new team members to you. I know they will learn a lot from you." 22 SHEDD replied all, referencing that Aruffo had also already informall 23 acquainted Francis with SHEDD. 24 A52. On or about May 14, 2007, DEGUZMAN' s wife spent th 25 morning with AB's (the FISC official's) wife. 26 referencing the "shaping op": "How was the brief @FISC?" 27 of [my wife's] shaping is working." Also on or about May 14, 2007, NEW~~L~~ 28 28 DEGUZMAN emailed Francis, ... "Guess all 1 emailed Francis: "We' re all dieing [sic] 2 [AB] went yesterday. to know how your meeting wit 11 3 A53. On or about May 18, 2007, DEGUZMAN forwarded Francis a 4 internal U.S. Navy email chain in which DEGUZMAN was advocating befor s and advising another Officer that he thought the U.S.S. Peleliu shoul 6 dock pierside during a port visit in Manila: "I' 11 have to coordinat 7 w/PEI and PN as well as our Husbanding Agent. I think it can be done a 8 the Presidential Pier. 9 during its port visit to Manila. 11 In fact, the U.S.S. Peleliu docked piersid 10 A54. On or about May 24, 2007, Francis sent NEWLAND an email 11 inquiring whether the U.S. Navy would be sending any ships to Thailand, 12 to which NEWLAND responded: "I think I got the boss to buy off on lettin 13 ships go to Phuket, [Thailand] . 11 ASS. On or about May 29, 2007, 14 Francis forwarded to DEGUZ~~~~- 15 several "bravo zulu 16 Navy officers, including LAUSMAN. 17 start 18 DEGUZMAN and others a hotel room during an upcoming port visit to Hon · 19 20 Kong: working on 11 letters prepared for the signature of senior U.S. the right DEGUZMAN responded: "Got them and will signatures." Francis replied, offerin "Copy all on the letters. ... Can I propose the Shangri-La or th Peninsula [Hotel] [in Hong Kong] . 11 A56. On or about June 5, 2007, DEGUZMAN sent Francis internal 21 22 U.S. 23 communication from his official U.S. Navy email account to his personal 24 email account and on to Francis. 25 Navy correspondence regarding the U.S. S. Peleliu, forwarding th A57. In reference to an upcoming port visit by the U.S.S. Blu 26 Ridge in Sydney, Australia, Francis emailed LAUSMAN confirming hote 27 reservations at the Shangri-La Hotel, organized by Aruffo, who Franci 28 29 • ,, 1 referred to as the conspiracy's "MWR [Morale, Welfare, and Recreation] 2 manager, Yokosuka, Det[achment] !" 3 A58. On or about June 12, 2007, in response to an email about 4 GDMA's capacity· to support a port visit by the U.S.S. Nimitz in Indi 5 and at what cost, Francis wrote an email to various U.S. Navy contractin 6 officers, blind copying NEWLAND and SHEDD. A59. On or about 7 June 14, 2007, Francis sent an email t a Brooks, a U.S. Navy Captain serving as the U.S. Naval Attache in Manila, 9 Philippines, advising Brooks to direct his comments in support of GD 10 related to the ongoing ship husbanding dispute in the Philippines 11 fellow conspirators NEWLAND and HORNBECK. 12 support 13 personnel, 14 Aruffo and DEGUZMAN later that same day. 15 of GDMA's position, as directed, which on June 16, A60. On or about June Brooks sent his comments had been 2007, 14-18, by GD which Francis forwarded t 2007, during the U.S. S. NEWLAND, DEGUZMAN, Blu 16 Ridge's port visit to Sydney, 17 GORSUCH, and others stayed at the Shangri-La Hotel in Sydney, Australi 18 at a total cost to Francis of over $10,000 USD. 19 Australia, ghost-written LAUSMAN, A61. On or about June 17, 2007, during the U.S.S. Blue Ridge' 20 port visit to Sydney, Australia, Francis hosted and paid for a farewell 21 and "changing of the guard" 22 within the Shangri-La Hotel. NEWLAND, DEGUZMAN, LAUSMAN, SHEDD, GORSUCH, 23 Aruffo, and others dined on saute of scallops, foi gras, and beef loin, 24 and 25 attendance at this event. 26 approximately $11,898 AUD. 27 disks containing classified port visit information for many 28 ships. signed an Altitude dinner event at the Altitude Restauran menu dated June 17, 2007 reflecting thei The total cost of this dinner at Altitude was During dinner, 30 GORSUCH handed Francis u. s. Na 1 A62. On or about June 18, 2007, a GDMA employee sent Franci 2 an email, attaching the classified U.S. 3 GORSUCH had provided the previous evening . A63. In or about June 2 007, 4 Navy ship schedules, whic to further conceal his 5 relationship with Francis, GORSUCH registered an account with the foreig 6 email service provider "cooltoad.com," which he used to communicate wit 7 Francis using a fictitious name . 8 email 9 Francis: "Bob here. account, On or about June 22, 2007, using th lyinginthedark@coo ltoad.com, GORSUCH sent an email t Just got turned on to this third party email websi t 10 that the military folks can't block or track; and best of all it can b 11 accessed from the ship. For your info - deliveries [of gifts] made wit 12 the exception of 1 box..." Referencing classified U.S. Navy ship schedules 13 that GORSUCH had provided, Francis replied: "Copy all and thanks for th 14 updates." 15 A64. On or about July 3, 2007, NEWLAND sent Francis an emai 16 stating, "[JC] just left for 2 weeks leave before he meets the ship i 17 Yoko[suka] and 18 yesterday. I leave the morning of 9 July. 19 him as your main POC until we figure out how [the incoming Seventh Flee 20 Chief of Staff] 21 visit by the U.S.S. Nimitz in Chennai, 22 Francis: "Let me know if you get any pushback on [port visit] cost issues, 23 [and] turns over with will respond. Jim DOLAN . [DEGUZMAN] just lef Don HORNBECK is back, so us Related to the recently completed por India, NEWLAND further invite I'll do what I can." A65 . On or about July 4, 24 2007, Francis confirmed NEWLAND' 25 flight information to Sydney and informed him that FISC wanted a discoun 26 for 27 incredulously, and in a subsequent email attached the biography of hi 28 successor as Chief of Staff for the Seventh Fleet. the services GDMA provided 31 in Chennai . NEWLAND replie 1 A66. On or about July 6, 2007, Francis verified that NEW 2 had received a hotel confirmation for his upcoming stay at 3 La Hotel in Sydney, Australia. 4 officials were complaining about the service that GDMA provided in Ne 5 Caledonia and Vanuatu. 6 kindness. 7 them make a big deal out of it . " 8 9 Francis advised NEWLAND that U.S. Na NEWLAND responded: "Thank you very much for you I heard about Vanuatu from N7. I understand. Will not le A67 . In reference to difficulties encountered during a par visit by the U.S.S . Stethem in Noumea, New Caledonia, SHEDD sent an email 10 setting forth the problems and copying many parties, 11 perceived as casting GDMA in an unfavorable light . 12 emailed NEWLAND to cover for GDMA: 13 copying al con [all concerned] 14 "I'll take SHEDD to the wood shed for that." 15 A68. On or about July 7, which Franci Francis, in turn, "We should be putting out fires no to make us look bad . " NEWLAND responded: 2007, DEGUZMAN emailed Francis: "I 16 know FISC owes you for the liberty ferry and everything else especiall 17 in India. 18 well ... unfortunately, I don't think I'll be able to influence people lik 19 I did there at 7th Fleet." I told [NEWLAND] it was you who funded the party in Manila a A69 . On or about July 7, 20 2007, Aruffo and Francis discusse 21 the turnover in the Seventh Fleet staff and the imminent departure o 22 several conspirators. 23 he'll spread the Glenn Gospel, hopefully we'll be up and running agai 24 in no time flat with the new crew. 25 think we should get the old COS [NEWLAND] 26 new COS . 27 [GORSUCH] / [Steve] SHEDD." 28 continued to discuss and vet the new members of the Seventh Fleet staf Aruffo wrote : "I talked to [NEWLAND] yesterday; If you make it to Tokyo next month, to socialize dinner with th Let me know what you're thinking, I'll talk to COS [NEWLAND] / Bo On or about July 8-9, 2007, Francis and Aruff 32 1 and how to effectively use the remaining members of the conspiracy t 2 thwart GDMA's adversaries. A70. On 3 or about July 8, 2007, sent cool toad. com account asking for biographical 4 GORSUCH' s 5 the new Seventh Fleet Chief of Staff . 6 certain new members of 7 replacement - - 8 Aruffo's replacement - 9 he wants to meet you too." staff, t information o [DEGUZMAN]" -- "N34 is a good guy - already talked with him an easy going, As for the new COS, GORSUCH explained he "i 11 etc. according to [NEWLAND] . " but will need to be eased into fine dining, A71. On or about July transfers 9, of 2007, Francis paid the Shangri-La hote 14 Sydney, Australia during NEWLAND's transition out of Seventh Fleet an 15 to his next assignment with the U.S. Navy. 2007, at the expenses A72. On or about July 22, NEWLAND for 13 16 airport email including DEGUZMAN' "believe he got a good turnover from a great guy, and an GORSUCH responded, the Seventh Fleet 10 12 Francis Hotel, Francis wrote to 17 urging him to exert pressure and otherwise advocate that the U.S. Na 18 not cancel the U.S.S. Kitty Hawk's planned visit to Port Klang, Malaysia: 19 "I respectfully solicit and would sincerely appreciate any support yo 20 can muster to make the [Kitty Hawk] visit a reality." 21 "All looks like it's coming together for the [Ki tty Hawk] visit." 22 about July 25, 2007, HORNBECK provided Francis his private email addres 23 hosted by msn.com. 24 Kitty Hawk conducted a port visit to Port Klang, 25 cost of $1,859,977 . HORNBECK responded, On o In fact, from August 28-September 1, 2007, the U.S.S. Malaysia, at a tota 26 A73. On or about August 20 , 2007, GORSUCH sent Francis an emai 27 addressed to "Boss" again vetting members of the Seventh Fleet staff fo 28 membership in the conspiracy: "I am getting with [S]teve SHEDD later an 33 1 will work on personality profiles ... 2 you an update shortly. 3 H [ORNBECK] . " We will come up with a plan and giv I have already spoken to Too Tall [LAUSMAN] an A74. On or about August 26, 4 2007, GORSUCH emailed Francis t 5 provide GORSUCH' s and SHEDD' s assessment of whether a particular U.S. 6 Navy officer was corruptible : 7 someone you can reach out to and have a dialogue with , but [S]teve SHED 8 isn't sure if he is someone who could keep his mouth shut about fin 9 dining. . "[The U.S. Navy officer] is certainl . still working on it." A75. On or about September 5 and 7, 2007, GORSUCH, using hi 10 11 cool toad. corn account, 12 communication between Franci s and HORNBECK and SHEDD in order that the 13 might provide updated , classified ship schedules to Francis on a rnor 14 timely basis than GORSUCH often could. 15 wil l help you out with whatever you need." 16 A76. sent Francis emails trying to establish di rec GORSUCH promised: On or about September 16-17, 2007, "Steve SHED Francis traveled t 17 Yokosuka, Japan , where he met and dined with HORNBECK, DOLAN, LAUSMAN, 18 LOVELESS, and others with the intent of vetting and incorporating certai 19 additional members o f the Seventh Fleet staff, including the new COS an 20 DEGUZMAN's replacement into the conspiracy. A77. 21 On or about October 25, 2007, GORSUCH, using hi 22 cooltoad.corn account, sent Francis an email recounting how, the previou 23 day in Yokosuka, Japan, he had provided Francis with two disks containin 24 the classified schedules of ships assigned to the U. S. Navy's Sevent 25 Fleet : "By the way, 26 with current C7F [Seventh Fleet] 27 investigate on the dates for the ships you requested and get back to yo 28 shortly." the two disks. the yellow one is the latest sked as briefed to the boss. 34 I will 1 A78. On or about November 18, 2007, SHEDD, using a cooltoad.co 2 account he had recently established, sent Francis an email describing i 3 narrative form the classified planned movements of the U.S.S. Tarawa an 4 U.S.S. Essex for December 2007. On or about November 21, 5 using his sent 6 narrative form the classified planned movements of the U.S . S. Port Royal 7 for December 2007. 8 g cooltoad.com account, Francis an email 2007, SHEDD, describing i A79. On or about November 29, 2007, Francis wrote an email t DOLAN and HORNBECK notifying them that GDMA was seeking from the U.S. 10 Navy a "cancellation settlement" payment relating to expenses that GD 11 purportedly sustained after the U.S.S. Kitty Hawk canceled a port visi 12 to Hong Kong due to diplomatic issues with China. 13 asked DOLAN to exert influence over FISC to pay the settlement: "FISC i 14 deferring resolution, 15 subcontractors 16 assistance for your side would be appreciated." 17 2007, 18 Front] : 19 principals a note to 'do the right contractual and legal' things withou 20 delay." 21 and GDMA needs that are DOLAN responded: I understand becoming to settle with our increasingly matters ABO. On or about December l, here, 2007, impatient. An BLUF and [Bottom Line U will send FIS Francis dined and partie 22 with LOVELESS, 23 approximately $5,000. 24 wife with Ulysse Nardin watches, worth $25,000. 25 [Hong Kong] On or about November "I' 11 help as required... contractual In the email, Franci SHEDD, and others in Singapore, at a cost to Francis o On this occasion, Francis provided SHEDD and hi A81. On or about December 16, 2007, Francis sent an email t 26 DOLAN and HORNBECK seeking their assistance in a billing dispute betwee 27 GDMA and the U . S.S. 28 resolving the U.S . S. Kitty Hawk cancellation settlement . Chicago and the U.S.S. 35 Connecticut as well as i DOLAN forwarde email to several officers responsible for making thos 1 Francis's 2 payments, 3 admonishment: 4 DOLAN forwarded his email to Francis, with the comment: s like this is unsat[isfactory]. 6 a shout." On or about December 18, 2007, DOLAN forwarded 7 internal, U.S . s continued with respect to Francis' s 9 pressure and advise other U. S . Navy personnel to close or reduce staffin (CSG-7 ), including the N3 of Submarine Group Seven "If these are accurate, let's get them paid soonest." "Late paymen If not resolved expeditiously, Navy communications about from CSG-7. 11 adversary: "Still working the [Hong Kong] piece with FISC." 13 14 On or about in Hong Kong, January 1, a 2008, traditional SHEDD, using his cooltoad.com account, sent Francis a document marked classified. A83. On or about January 15 cool toad. com account, 16 U.S. Navy ships for several months hence . 17 DO ongoing request that DOLAN at the Ship Support Office A82. ( "SSO" ) payment 10 12 with th 11, 2008, SHEDD, using hi sent Francis the narrative schedules of variou A84. On or about January 19- 21, 2008 , SHEDD , and others staye During the stay, Francis 18 for two nights at the Ritz Carlton in Tokyo. 19 hosted and paid for a "boys night out" dinner at the Azure Forty-Fiv 20 Restaurant, which SHEDD, GORSUCH, and others attended. 21 ABS. On or about January 24, 2008, SHEDD advised Francis that, 22 at Francis's behest, SHEDD had delivered cigars and fine wine to LAUS 23 and HORNBECK, and fine wine to LOVELESS and DOLAN. 24 A86. In the same email, SHEDD corresponded 25 hotel accommodations and dinner during the U.S.S. Blue Ridge's upcomin 26 port visit to Hong Kong. 27 to bring AG into the l oop if that is alright with you. 28 good alternate for me, even if he is Australian." As to AG, a new attendee, SHEDD wrote: "I 36 He will SHEDD added, "Also, 1 we'll need receipts for this one," and in closing, SHEDD pledged, "I hav 2 a number of port visit updates for you. 3 to quiet down this evening." 4 rooms, 5 it covered." I have to wait for the offic Francis replied: "More to follow on th no worries on the hotel vouchers from the travel agent [.] A87. On or about January 25, 6 cooltoad.com his 8 schedules. g schedule of the U . S . S. Fitzgerald to accommodate Francis. During ABB. this emailed 2008 at 12:25 a.m . , SHEDD, usin 7 10 account, exchange, Later on or about [G) o Francis SHEDD multiple confirmed January 25, classified a 2008, change SHEDD, emailed Francis about Francis' s shi to th using hi 11 cool toad. com account, 12 rooms at the JW Marriott in Hong Kong during the upcoming port visit b 13 the U.S. S. 14 Wanchai is a perfect hotel - not too opulent! 15 Francis responded, 16 LOVELESS, 17 at the Shangri-La to ensure that we are all not together at the sam 18 hotel. 19 are big time 'MF'". Blue Ridge: "DOLAN is now in for a room. providing hote ... JW Marriott i [Y) ou are a confirming rooms for DOLAN, HORNBECK, and commented: true master!" SHEDD, AG, an "Will worry about the payment later. I a Keep this dinner on the low side, the HK SSO [Ship Support Office) SHEDD responded: "Copy all .... Fully understand th 2 o need for max discretion." 21 A89. On or about January 28-February 1, 2008, DOLAN, HORNBECK, 22 LOVELESS, SHEDD, and AG stayed in Harbor View Club Floor rooms at the 23 Marriott in Hong Kong at a 24 for by Francis. 25 cover up their corrupt relationship, Francis distributed to the U . S. Na 26 Officer-attendees 27 inclusive) per room per night. rate of about $626 per room per night pai As requested by SHEDD, however, in order to conceal an fictitious receipts 28 37 reflecting a cost of $126 (ta 1 A90. On or about January 29, 2008, during the U.S.S. Blu 2 Ridge's port visit to Hong Kong, 3 event in the Alsace Room of the Petrus Restaurant, which DOLAN, HORNBECK, 4 LOVELESS, LAUSMAN, SHEDD, and AG attended. 5 eight course meal, 6 oscetra caviar, pan-seared duck liver with pear and sunchoke, Dover sole, 7 grilled Wagyu beef tenderloin Rossini, a selection of fine cheese's, an 8 baked Alaska for dessert. 9 wine. The total cost of the event - venue, 10 Francis hosted and paid for a dinne Dinner that evening was a featuring black truffle soup, rock lobster salad, Each course was paired with Champagne or fin entertainment, dinner , an wine - was approximately $18,371. 11 A91. On or about January 29, 2008, HORNBECK emailed Francis t 12 thank him for a night of entertainment and to solicit a job: "Just wante 13 to send a quick note to say thank you for including me in the get- 14 together last night. 15 music , and wine were wonderful ... As we briefly discussed, it looks lik 16 I'll be leaving the Navy around June 2009 . 17 in this job until retirement, or if I'll get orders back to the State 18 later this year. 19 office in San Diego in the near-future, I would very much be intereste 20 in being a part of that." 21 A92. Really enjoyed talking to you - and the food, Not sure whether I will sta In any event, if you are still considering opening a On or about February 12, 2008, SHEDD, using hi 22 cooltoad.com account, 23 for various U.S. Navy ships and submarines for up to six months hence, 24 including the proposed port visit 25 transiting through the Seventh Fleet AOR. 26 A93. emailed Francis the classified planned movements schedule of all aircraft On or about February 12, 27 LAUSMAN 28 accomplishments: author and send "May I a humbly bravo request 38 2008, zulu carrier Francis requested tha letter an official touting GDMA' s BZ message tha 1 includes a cc to the OLA [Hong Kong Naval Attache], 2 [Commander of Logistics Western Pacific] / FISC Yoko[suka] 3 and other key players to ensure everyone knows of your satisfaction wit 4 my company's support." 5 on or about February 19, 2008. 6 7 A94. On and Singapor LAUSMAN complied, sending the requested bz lette or cooltoad.com account, 7th [Fleet], CLW about February 12, 2008, SHEDD, using hi sent Francis an email describing five months o B schedules for various U.S. Navy ships and submarines. A95. 9 On or about February 17, 2008, Francis asked SHEDD t 10 provide him with proprietary invoice information for GDMA competitor 11 "from Vietnam , Cambodia, 12 Tahiti, Comoros, Madagascar, Seychelles, Mauritius, Guam for years 06 , 13 07 and OB. I need data inf o to plan for upcoming solicitations . " 14 rep l ied: "I' 11 work on the cost reports once I return from Hawaii ... Wha 15 are your thoughts about a get -toge ther?" 16 A96. On or Honiara and about [pl ort visits, February 29, 2008, in Saipan, SHEDD, Palau , using SHED hi 17 cooltoad .com account, 18 internal U.S. Navy document marked "draft pre-decisional" that describe 19 the 20 throughout the Seventh Fleet AOR for the next year. classified sent Francis an email to which was attached a planned movements of U.S. Navy aircraft carrier 21 A97. On or about March 6, 2008, using his cooltoad . com account, 22 SHEDD emailed Francis, attaching classified ship schedules for the u.s.s. 23 Blue Ridge and the U .S.S. Abraham Lincoln. 24 A98. On or about March 26, 2008, SHEDD, using his cooltoad.co 25 account, emailed Francis, attaching 26 identified the classified planned movements of the U.S.S. 27 the U.S.S. Patriot for the upcoming three months. 28 39 U.S . Navy transit maps tha Peleliu an A99. 1 On or about April 16, 2008, Francis emailed DOLAN an 2 HORNBECK requesting that DOLAN take official acts and exert pressure o 3 other 4 submarines were not paying GDMA's bills on time. U.S. Navy officials to remedy the problem that Seventh Flee These invoices wer s delayed due to suspected fraudulent charges by GDMA. DOLAN forwarde 6 Francis's email to two U.S. Navy submarine officers, with the admonition: 7 "The 8 payment scenario laid out in an e-mail I sent you in December. 9 CSG-7 bill paying responsiveness had been fixed until below is not flattering, and is similar 10 below. 11 issue, resolve it expeditiously." 12 triumphantly emailed other employees of GDMA: 13 Ha ha." to the non-responsiv I Please read below carefully, and fix the problem. 14 AlOO. received th If there's a Upon reading DOLAN's response, Franci On or about April 16, hotel 2008, "That was a quick blast. LAUSMAN emailed Francis, 15 asking that that 16 May 1-4, 2008: 17 in [Pl attaya 1-4 18 Pattaya at the Sheraton," and added, 19 the ports." 20 he had booked rooms at the Pattaya Sheraton in Thailand and also at th 21 Shangri-La in Singapore. 22 Francis book a I though "I will be home by 2130 Tokyo time. [Ml ay." Francis agreed, "I will make arrangements ... a On April 19, 2008, Francis emailed LAUSMAN to confirm tha AlOl. On or about April 19, 2008, Francis sent a GDMA employe an 24 "[Flast track and VIP service. 2s trip and tour for shopping in Bangkok. 26 Cheap price [. l 28 Just need a hotel "I want to discuss some plans fo 23 27 room for him in Thailand fro email referencing Al02. [LAUSMAN' s wife' sl upcoming Best room at Sheraton. trip to Thailand: Arrange [mlarke She wants to make silk pants. [GDMAl pay ha ha . " From April 30-May 4, 2008, LAUSMAN and his wife staye at the Pattaya Sheraton, with the costs borne by Francis. 40 1 Al03. On or about April 30, 2008, SHEDD sent Francis an email 2 asking Francis to provide hotel 3 HORNBECK, and LOVELESS during the U.S.S . Blue Ridge's upcoming port visi 4 to Laem Chabang, Thailand. 5 LOVELESS, 6 Conrad Hotel in Bangkok, Thailand, during which they were entertained b 7 numerous prostitutes paid for by Francis. 8 9 10 rooms in Thailand for SHEDD, DOLAN, On or about May 2, 2008, DOLAN, HORNBECK, and SHEDD stayed at Francis' s expense for one night at th A104 . On May 4, 2008, SHEDD emailed Francis to notify him tha DOLAN, HORNBECK, and LOVELESS "were all smiles on the drive home ove their 'one night in Bangkok.'" 11 A105 . On or about May 5, 2008, Francis sent an email to DO 12 and HORNBECK asking again for 13 between GDMA and FISC Singapore. Blue Ridge's Singapore from May 6-9, 16 stayed at Francis's expense at the Shangri-La Hotel in Singapore. 17 about May 6, 2008, Francis hosted dinner at Mezza9, after which, Franci 18 arranged 19 LOVELESS . 20 U.S.S. billing disput 15 2008, the in a Al06. several to support 14 for Incident DOLAN' s DOLAN, prostitutes to HORNBECK, LAUSMAN, entertain DOLAN, visit t and LOVELESS HORNBECK, Ono an Al07. On or about May 7, 2008, HORNBECK emailed Francis to sa 21 "thank you for a fantastic dinner last night . 22 new Mongolian Friend," a reference to a prostitute, 23 responded: "Hot Mongolian [B]arbeque Ribs!" 24 port Al08. Also really enjoyed M to which Franci Incident to this port visit, on or about May 8, 2008, 25 Francis also hosted dinner at Nadaman's Restaurant, which was attende 26 by the new Seventh Fleet COS and several others, 27 Francis of over approximately $8,000. 28 wrote to Francis, "The 3 [El nsigns [DOLAN, HORNBECK, and LOVELESS] wer 41 at a total cost t On or about May 10, 2008, SHED Hornbeck said he couldn' 1 all grins this morning as we got underway! 2 have survived another night in Singapore with you!" 3 A109. Incident to this port visit, from May 6-14, 2008, Franci 4 paid for 5 incidental charges for SHEDD and his family, as well as a room for LAUS 6 and his wife from May 4-10, 2008. 7 two hotel rooms at the Shangri-La Hotel, AllO. On or about May 9, 2008, Singapore and all SHEDD emailed Francis to as 8 that Francis pay for his family's travel (four passengers) 9 to Malaysia and back to Japan. SHEDD invited Francis to "spank me 10 if I'm out of line." 11 he would provide the travel arrangements, and did so, including bookin 12 reservations 13 May 14-20, 2008 . 14 Francis to confirm that she had "arrived in [Malaysia] and everything i 15 terrific. at On or about May 11, 2008, Francis responded the Magellan Sutera Harbor for SHEDD' s family fro After SHEDD's wife departed Singapore, SHEDD emaile She's at the Magellan Sutera Harbor which is perfect fo 16 optics. 17 Singapore and Malaysia, airfare, 18 the total cost of this SHEDD family vacation was approximately $30,000. 19 Alll. On or about May 10, 2008, SHEDD, using his cooltoad.co 20 account, sent Francis an email to which was attached classified schedule 21 for U.S. Navy ships through June 2008. 22 The Shangri-La would look bad for me." change fees, A112 . On or about May 10, 2008, Inclusive of hotels i and incidental expenses, SHEDD emailed Francis about 23 SHEDD' s and HORNBECK' s assessment of whether the new Seventh Fleet CO 24 was corruptible and hence a potential recruit to the conspiracy: "I ha 25 a good talk with HORNBECK regarding [COS] . 26 with his participation in events. 27 you the other night at Nadamans and felt safe." We still need to be cautiou [COS) was completely comfortable wit 28 42 1 All3. On or about May 12-14, 2008, during a port vis it by th 2 U.S.S. Blue Ridge 3 accommodations at the Shangri-La Hotel and the services of prostitute 4 for DOLAN, HORNBE CK, and LOVELESS, among others . All4. 5 in Jakarta, Indonesia, On about May 15, 2008, 6 U.S. 7 prostitutes: 8 returning to Singapore. g for more Minex Ex. The Menu was great!" Francis paid for hotel Francis emailed HORNBECK Navy terminology appropriated to reference their escapades wit "The All5. 10 PASSEX and DIVEX [El x will continue We will meet up in Kota On or about May 15, 2008, today, I [Kinabalu , Malaysia) Francis emailed SHEDD t 11 complain that another officer "was very cautious around me last night." 12 SHEDD responded: "[That officer) is definitely poisoned . ... 13 see why I haven't attempted to bring him in." 14 All 6 . Also or about emailed May 15 cooltoad . com 16 schedules for various U.S. Navy ships . 17 account, on Francis 15, the 2008, Now you ca SHEDD, c l assified ship using hi exercis All 7 . On or about various dates between May 14-21, 2008, durin 18 a port visit by the U.S.S Blue Ridge 19 LOVELESS, 20 Malaysia at Francis's expense. 21 Magellan Sutera Harbor with his wife and children . 22 Kota Kinabalu, including a fuel purchase authorized by LAUSMAN, cost th 23 U.S . Navy approximately $2,218,037 . 24 and AG, stayed at in Malaysia , the Shangri-La Hotel DOLAN, HORNBECK, in Kota Kinabalu, SHEDD stayed at Francis ' s expense at th The port visit t All8. On or about May 22-25, 2008, during a port visit by th 25 U.S.S. Blue Ridge to Manila, 26 LAUSMAN, 27 Shangri-La in Manila, Philippines, where for himself and the U. S. Na 28 attendees, Francis booked the Presidential Suite . SHEDD, Philippines , HORNBECK, DOLAN, LOVELESS, and Sanchez stayed at Francis' s expense at the Makati 43 In this venue, Franci .f 1 hosted a raging multi-day party, with a rotating carousel of prostitute 2 in 3 Perignon available at the Shangri-La. 4 Francis exceeded $50,000 USD . 5 Francis to say "just wanted to say thanks - was great seeing you again. 6 Always a pleasure spending time with you." 7 Francis "I finally detoxed myself from Manila. 8 of 9 drinking! ! ! " attendance, days. during It's which been a the conspirators drank all of the Do Room and alcohol charges born b On or about May 25, 2008, HORNBECK emaile while since On May 30, 2008, SHEDD emaile I've That was a crazy coupl done 36 hours of straigh All9. On or about June 7, 2008, LAUSMAN criticized a U.S. Na 10 11 FISC official for retaining one of GDMA's competitors to render service 12 to the U.S.S. Blue Ridge during an upcoming port visit to Vladivostok, 13 Russia 14 shortfalls in support." 15 pressure on other officials within the U.S. 16 influence 17 contract to GDMA. 18 'one-time' 19 Vladivostok from July 2-5, 20 award, Francis forwarded the award email to LAUSMAN, HORNBECK, and DOLAN. and threatened to hold FISC their In the following days, LAUSMAN and DOLAN exerte decision contract "responsible/accountable to award the On or about June 21, to support 2008. Navy with the Vladivostok ship husbandin 2008, GDMA was notified of the U.S.S. Blue Ridge port visit t Upon being informed of the contract 21 Al20. On or about July 21 and 23, 2008, Francis emailed SHED 22 and HORNBECK a naked picture of one of the prostitutes from Manila, wit 23 the notation to SHEDD, 24 Ens [igns) in Manila . 25 simply wrote: "She misses you." 26 pet? Georgous! 27 28 "I thought this photo will bring memories of th Especially Don." In his email to HORNBECK, Franci SHEDD replied: WOW!!!!! Is this Don's [sic] Great memories!" Al21. On or about August 6, 2008, SHEDD sent Francis an email using his cooltoad.com account providing 44 updated classified shi 1 schedules and transit plans for various U.S . Navy ships. 2 SHEDD wrote: 3 good ship BLUE RIDGE. 4 time to come up to Tokyo for some 'guys' time . " 5 In closin "Brother HORNBECK has joined me as a resident aboard th Late August or early September would be a goo Al22. On or about August 20, 2008, AG sent Francis an email 6 from his account, 7 containing classified U.S . 8 recruited to the conspiracy by SHEDD, AG had initiated a cooltoad.co 9 account at SHEDD ' s direction. 10 Al23. dingoll@cooltoad . com, using the name On or Navy ship about schedules. September 18, [AG] Australia, After 2008, SHEDD, having bee using his 11 cool toad. com account, 12 internal U.S. Navy Judge Advocate General memorandum concerning the U.S. 13 Navy's improper payment of excessive port fees. 14 spoken with DOLAN and Sanchez about the matter and that they advise 15 Francis to "send a reply letter to [AB's replacement at FISC] and invit 16 him to your office for an 17 proprietary information to Francis, SHEDD also inquired: "Boys night ou 18 on Saturday or Friday? 19 sent Francis an email to which was attached a 'informal tour.'" SHEDD added that he ha Having passed internal, What suits you?" Al24. On or about September 23 , 2008, having been recruite 20 into the conspiracy by SHEDD and AG, Sanchez sent Francis an email fro 21 his newly-minted cooltoad.com account, 22 name created as an amalgamation of Troy Aikman and Emmitt Smith, forme 23 football players for the Dallas Cowboys, 24 discuss the operations for next week when you ['re] 25 senior bubbas are chomping at the bit." 26 using the name 'Troy Smith,' in which he wrote: "Wanted t in the area. Th Al25. In advance of a trip to Tokyo, Japan from October 3-7, 27 2008, Francis sent to SHEDD's cooltoad.com account promotional material 28 from VIP Tokyo Escort, a high-end call girl service. 45 Al26. 1 to a On or about October 7, 2008, Francis forwarded GDMA' 2 response controversy regarding ship husbanding services 3 ships in the Philippines to DOLAN and Sanchez. Al27. 4 On or about October 9, 2008, 5 employees at GDMA, 6 Jose 7 payments with Subgru 7[CSG-7], 8 ABE, 9 above to consolidate and present to Jim DOLAN." [Sanchez], emailed stating : "During my discussion with Jim othe [DOLAN] an they had offered to resolve any outstanding issues fo May I FFV Carne . 10 Francis for MS have a KHK [U.S . S . Kitty Hawk], Mercy PI, PNG, summary of all pending invoices for th Al28 . On or about October 15, 2008, following up on a topi 11 discussed previously in Tokyo, 12 cooltoad.com account, from his new position in Tennessee: "I've got abou 13 10 days before I'm in big trouble and I 14 assistance. 15 personal debt] 16 directly, 17 would like to handle this 18 information you need ." 19 entitled : "2008-10 Debt Report". 20 SHEDD sent Francis an email, really, using hi really appreciate you I've attached the electronic copy of the same report I gave you in Yokosuka. my account is: Al29. If you prefer wire transfe [account details] ... Or, let me know if yo I' 11 get you whateve in another manner . Attached to the email was an Excel spreadshee In response, Francis wrote: "I require [AG] or HERRE 21 to advi [s]e what is the plan for ship visit to the Pacific 22 including Mercy or Pel [eliu] . The info is required by tomorrow." 23 replied: 24 have details for you in the next 3 to 4 hours. 25 CTF 26 [coolt] oad [ . com] account above." 27 ship schedules eight hours later from his cooltoad.com account, 28 SHEDD and Sanchez. "I just spoke to Synchronization [o VTC [AG] at over the phone. 1230 Japan He's on it and shoul He's got the weekly C7F- Time. I've cc'e d [h]i As promised, AG forwarded the requeste 46 cc'in ' ,, 1 A130. On or about October 19, 2008, DEGUZMAN emailed Franci 2 about a job with GDMA, "I would like to know more about GDMA if you thin 3 I 4 Headquarters] re my future [,] but next summer is a target if job prospect 5 are good." can be part of 6 the team. I have to talk to [U.S. Marine Corp A131. On or about October 20, 2008, SHEDD sent Francis an email 7 which asked, "I was wondering if you have reached a decision on my SHED 8 Bailout /Rescue Loan proposal." 9 A132. Foll owing his email from October 19, 2008, on or about 10 November 11 Francis his resume and ask Francis for a job: "Pls find in the attachmen 12 my CV; I think you know what I can do for GMDA . I believe that I can b 13 of value to the company as a Strategic Planner and Ops Director. 14 respected and admired how you grew your company and would love to assis 15 you in keeping GMDA' s leads." 16 2, 2008, DEGUZMAN used his personal email Since Steve "I require seeds ... from HERRERA or [AG] 18 out I have been kept blind on seeds and comms . " 19 talk to [AG] and Mario [HERRERA] this morning." sen I'v [SHEDD] choppe Sanchez replied: "Will Al34. On or about November 16, 2008, DEGUZMAN used his personal 21 email account to ask Francis, 22 20 10 vice 2009? 23 venues for Marine and GDMA business." 24 to A133. On or about November 2, 2008, Francis emailed Sanchez: 17 20 account A135. "What would you think if I joined GDMA i In the meantime, I can continue to try to open up mor In or about mid-November 2008, Francis and Sanchez 25 communicated frequently about arrangements for an upcoming port visit b 26 the U.S. S. Blue Ridge in Hong Kong. 27 prostitutes that Francis planned to bring in from Mani la : "By the way , 28 my bosses want to know how your scouting trip went to Manila and if yo 47 In preparation, Sanchez wrote o 1 could share some pictures of the talent we expect to see." 2 subsequently reserved rooms from November 25-30, 3 Kowloon Hotel for DOLAN, HORNBECK, 4 their 5 pictures of upcoming 6 exploits, 2008 at the Shangri-L Sanchez, and AG. Sanchez commented: Franci "JD In anticipation of [DOLAN] sa[w] th and is ready to go ©." [a prostitute] Al36. On or about November 20, 2008, Sanchez emailed Francis 7 to say that HORNBECK had rejected HERRERA'S participation in the upcomin 8 festivities in Hong Kong. 9 rhythm going to be similar to [the Philippines][,] meeting in your suit Sanchez continued: "By the way, is the battl 10 or different type of set up. 11 if 12 November 20, 13 [DOLAN' s] opinion on [the Captain]? Shall we bring him in the brotherhoo 14 in the future?" "Spoke to JD 15 sure about 16 perhaps in Tokyo ... not HK." you had 17 additional 2008, [DOLAN] is very excited and wanted to kno photos." Francis inquired about a U.S . Navy Captain: Sanchez replied, [the Captain] of Sanchez, o "What is yours and JD' [DOLAN] and he is no and wants to f[ee]l out some of the new folks Al37. On or about November 21, 2008, Sanchez emailed Franci 18 using his personal email account: "I spoke to [DOLAN] about the contracts 19 and since I gave them a push last week, we are giving them til the en 20 of this month before we push it to the next level." 21 that day, 22 engage" 23 responded: 24 In another email Francis urged Sanchez to "turn the heat on and have the U.S. "JD Navy [DOLAN] on several contract awards, to which [DOLAN] Sanche is locked and ready to fire." Al38. On or about November 25, 2008, DEGUZMAN used his personal 25 email account to advise Francis that he would be staying in the Marin 26 Corps until at least 2010, 27 job with GDMA] again next year. but that he is "willing to try [to secure Meanwhile I can continue to see if th 28 48 1 USMC and GDMA can have a relationship for BK [Balikatan) and CG [Cobr 2 Gold), Al39. 3 4 [Marine Corps exercises in the Philippines) . " On or about November 25-29, 2008, Francis, DOLAN, HERRERA, Sanchez, AG, and others stayed at the Kowloon Shangri-La, dine s at the Petrus Restaurant, and were entertained by prostitute 6 specifically flown in from Manila for this event, all at a total cost t 7 Francis of over approximately $55,000. 8 Sanchez wrote to Francis : "Lion .King, once again, the brotherhood is ver 9 thankfu l for everything you provided during this port visit ... Please pass 10 my best to 'Lynn' [a prostitute) 11 needed. 12 contracts and I will release tomorrow." On or about November 29, 2008, ... perhaps a short visit to Japan i I have already drafted my email to FISC about the status of Al40. On or about November 29-30, 2008, Sanchez, over several 13 14 emails using his cooltoad.com account, emailed Francis to recount th 15 exploits in Hong Kong. 16 perfect and the Indo [nesian) Det [achment) 17 JD [DOLAN] could not be any happier and this made his last trip to Hon 18 Kong one for the ages." Francis replied: "Let's keep the Brothers tigh 19 and req[uire) the Choke OIC [HERRERA] to provide weekly updates and th 20 project list of 21 ports . " He described variously, [U.S. Coast Guard], NATO, "BT [a prostitute] wa [other prostitutes) as well. and Canadian names and date 22 Al41. During the festivities in Hong Kong, Francis again aske 23 DOLAN and Sanchez, among others, to exert pressure on and to advise othe 24 U.S . Navy officials to close or realign the duties of the Ship Suppor 25 Office in Hong Kong. 26 December l, 2008, DOLAN wrote a lengthy email to the Rear Admiral Suppl 27 Officer (N4) of the Pacific Fleet recommending that the U.S. Navy reduc 28 staffing in the Ship Support Office in Hong Kong. In furtherance of that objective, 49 on or abou DOLAN forwarded 1 separate copy of the email to Francis with the rhetorical flourish: "Wh 2 loves you, 3 email, DOLAN forwarded the Admiral's response to Francis, noting, 4 now on his radar." Al42. 5 When the Admiral Brother?" On or about December responded to DOLAN' s 2, 2008, Sanchez, origina using "It's hi 6 cooltoad.com account, emailed Francis classified ship schedules obtaine 7 from HERRERA: "Lion King, here's the information you requested from Chok 8 OIC [HERRERA] attached." 9 Sanchez: "Thanks for the updates. 10 Upon receipt of the schedule, Francis wrote t Outstanding. Choke has secured 3 hr of Lap Dancing in [Tokyo] . " 11 Al43. On or about December 11, 2008, Sanchez emailed Francis, 12 vetting a potential member of the conspiracy : "Don't think it would b 13 a good idea to include [Officer] ... we would place too much risk out there. 14 Think our group is the right mix and right influence. 15 about the Lion King [ '] s empire and harem expands with passion and lus 16 ... yes indeed!" . 17 Al44. On or about December 17, 2008, SHEDD, I like the lin from Tennessee, 18 using his cooltoad.com account, sent Francis the monthly roster of Fla 19 Officers in the U.S. Navy, noting, 20 rosters and I'll shoot it to you." SHEDD inquired of the escapades i 21 Hong Kong: 22 "I'm on distro for the monthly [f]la "How was the brotherhood during that visit?" Al45 . On or about Christmas Eve, 2008, HORNBECK emailed Franci 23 with Christmas wishes, explaining, 24 Tokyo - 25 Francis replied: 26 brother from the Lion Kings Harem." 27 28 "Sorry I missed you in Hong Kong an [G]ot pulled in a couple of trips at the last minute," to whic "Don, Great to hear from you. Al46. On or about December 29, I was missing my othe 2008, Sanchez sent an email t Aruffo and Francis confirming that he provided DOLAN with two boxes o 50 1 beef , fine wine, a box of cigars, and a large fruit basket and HERRE 2 with two boxes of beef. 3 Al47. On or about January 7-8, 2009, Sanchez emailed Francis 4 about a proposal to award a separate ship husbanding contract for th 5 Cooperation Afloat Readiness and Training 6 unseating GDMA as the contractor for this event. 7 proprietary, internal U.S . Navy proposal on this topic, and separatel 8 assured Francis: "I wi ll be talking to [DOLAN] about this topic tomorro 9 since I believe someone is smoking Sanchez forwarded th something.... " Sanchez continue 10 several hours later, 11 spoke about the CARAT contract and are going to put the full press wit 12 [Pacific Fleet] on why we are doing this." 13 " [DOLAN] ("CARAT" ) exercise, won't be back unt il Monday ... however w A148. On or about January 12 , 2009, DEGUZMAN, using his privat 14 email account, provided Francis with advice and counsel on how to 15 to 16 services for CARAT. 17 personal 18 talking points. 19 "As we take care of your sailors, marines, ships and aircraft, I woul 20 like to bring to your attention that there continue to be detractor 21 among certain staffs in the Navy that have made it difficult to brin 22 our quality service to you. 23 to support CARAT 09. 24 and pound foolish' 25 getting the contract without looking into the second and third effect 26 of their action . 27 but I would like to stress the flawless performance of GDMA in supportin 28 the Fleet as it conducts operations in this AOR." the -U. S. Navy's email proposal to separately contract ship husbandin On or about January 16, 2009, DEGUZMAN, using hi account, prov ided Specifically, Francis with additional suggeste DEGUZMAN suggested Francis argue that: There is currently an effort to save mone I believe that this may be a case of 'penny wis since their main purpose is to exclude GDMA fro I understand saving money in these tough economic time 51 1 Al49. On or about January 15, 2009, Sanchez sent Francis thre 2 separate emails containing comprehensive c lassified ship schedules fo 3 various ships in and transiting the Seventh Fleet AOR . 4 AlSO . On or about January 18, 2009, DEGUZMAN used his personal 5 email account to ask Francis for a job at GDMA: "[I] f you still want m 6 to work for you next year (summer 2010) ., where do you think you want m 7 located? 8 need support . 9 account when I am at work. 10 At corporate HQ? ... Meanwhile, I am at your service when yo It's best to give me a heads up since I don't open thi Pls send a note to [DEGUZMAN'S wife] at he address (on the 'cc' line)." Al51. On or about February 2, 2009, in response to an 11 12 by Francis, Sanchez used his cooltoad .com account to advise Francis: " 13 [DOLAN] does not know about any ongoing investigation... " 14 Al52 . Throughout January-February 2009, Sanchez, provided 15 others 16 including on February 13, 2009, when Sanchez provided Francis with th 17 schedules of all aircraft carriers in or projected to transit the Sevent 18 Fleet AOR in 2009. Al53. 19 Francis with classified On or about February 4, ship 2009, schedule HERRERA an information, in preparation for th 20 U.S.S. Blue Ridge's upcoming visit to Manila, Philippines, Sanchez, usin 21 his cool toad . com email account, 22 visit how does the new det [achment] [of prostitutes] 23 I 24 prostitutes 25 February 11 , 2009 , Sanchez asked Francis, "How's the talent search going .. 26 photos (JD' s 27 email attaching c lassified ship schedules of many types of U.S. 28 ships, can share with JD [DOLAN] provided by emailed Francis asking, :)" Francis Again during [DOLAN' s] getting excited)." Sanchez asked Francis, upcoming the Any picture prospect port visit, On February 15, 2009, "For the cabins 52 look? referencing the "For the por [accommodations] , of o in a Na is it 1 the same location as last time? 2 prostitute], 3 there. 4 is fine with it as well : ) ! " How's the new talent? [name of prostitute], or [name of Is prostitute] [name o gonna b I'm fine with [name of prostitute] for the entire time, JD [DOLAN] Al54 . On or about February 16, 5 2009, DOLAN emailed Francis, 6 amid a discussion about how a U.S. Navy ship could rent an island in th 7 Maldives 8 upcoming activities in Manila, 9 "Look forward to seeing you, Brother.• 10 for three Al55. days for crew liberty . DOLAN, anticipating Philippines the following week, th wrote: From on or about February 19-22, 2009, DOLAN, Sanchez, 11 HERRERA, and others stayed at Francis's expense at the Makati Shangri- 12 La at a cost to Francis of approximately $30,000 USD . 13 in Manila, Francis paid for meals, alcohol, and prostitutes to entertai 14 these Officer-attendees. 15 cooltoad.com email account, sent Francis and email stating, "A 16 you from the brotherhood ... we thoroughly enjoyed ourselves and had 17 great time ... •. 18 Al56. On or During their sta On about February 23, 2009, Sanchez, from hi about March 24, 2009, Sanchez, using hi 19 cooltoad.com account, sent an email to Francis that provided a narrativ 20 description of the planned mov ements of numerous U.S. Navy ships throug 21 August 2009, with the comment: "The following info is provided from CHO 22 [HERRERA] " 23 Al57 . On or about April 6, 2009, DEGUZMAN, in 24 emails assisting Francis -- either personally or through his advice t 25 or advocacy before others -- with issues and controversies related t 26 GDMA' s business in the Philippines, 27 comp package if you have a place in GDMA for me in 2010?" 28 53 wrote: "[W] ho should I talk to r On or about 1 April 10, 2009, DEGUZMAN used his personal email account to ask Francis: 2 "When can we talk about compensation?" Al58. 3 On or about April 28 , 2009, Sanchez, using hi 4 cooltoad.com account, sent an email to Francis which stated: "Receive 5 the 6 therewith a classified narrative description of the planned schedules of 7 several U. S . Navy ships through Summer 2009 . following 10 from CHOKE [HERRERA) ©." Sanchez include Al 59. On or about May 27 , 2009, DEGUZMAN, using his personal 8 9 update email account, sent Francis a document describing, "[W)hat I think I ca do for GDMA" as Francis's "Chief of Staff ." 11 Al60. 12 account at cooltoad.com, 13 c lassified ship 14 transiting the Seventh Fleet AOR . 15 Throughout March-June 2009, Sanchez, using his emai continued to frequently provide Francis wit schedule information for all U.S . Navy ships in o Al61. On or about June 8, 2009, Sanchez sent Francis an email 16 attaching the ship schedules of numerous U.S. Navy ships in the Sevent 17 Fleet AOR, while noting: 18 Bangkok with the BOYZ 19 Regarding JD ' s 20 you in Singapore 21 [s ic)?" 22 Al 62 . "Would like to get together for 3-4 days ... i (JD [DOLAN's) [DOLAN), myself, and [another Officer). detachment plans, he want [s) to come to visi Should I tell him he will be staying in the Shangral Over the next several days, Francis and Sanche 23 corresponded about the dates and particulars of the events planned fo 24 Bangkok and for DOLAN's farewell tour. 25 "I will lock down hotel rooms for JD [DOLAN) in Singapore and T[he) Gan 26 for BANGKOK." 27 sent to NCIS regionally_ to [b) utt out of [force protection) decision 28 in port for visiting ships . " In one instance, Francis wrote: In return, Francis requested from Sanchez "some guidanc 54 1 A163. On or about June 20, 2009, Sanchez confirmed that onl 2 DOLAN and he would be attending the events in Bangkok. 3 rooms for JD and myself... [NJ o one else in the brotherhood was able t 4 come , however we should have a blast with you, my last month as a LCD 5 and JD's [DOLAN's] last blast in the land of smiles." 6 "Limo will be waiting for you on arrival." 7 Francis replied: A164. On or about June 29, 2009, DEGUZMAN sent Francis an email 8 requesting 9 Philippines] "any info you have on your nemesis to determine what kind of fraud, 10 use." 11 rap sheet of the CEO of this competitor. 12 "Will need onl [a competitor in th waste, and abuse we ca On or about July 1, 2009 , Francis sent DEGUZMAN a mug shot an A165 . From July 1-4, 2009, DOLAN and Sanchez stayed a 13 Francis 's expense at the Shangri-La Hotel in Bangkok, during which time, 14 Francis gave Sanchez 15 prostitutes, at a total cost of at least $8,500. 16 emailed Francis, amid a discussion about a controversy surrounding a por 17 visit in Reunion, 18 Thanks for Everything, Brother!" 19 A166. a wad of cash to pay for meals, stating simp ly : alcohol, On July 5, 2009, DO "The reflash watch is set." On or about July 7, 2009, an Sanchez sent Francis "JD' 20 upcoming itinerary for your planning purposes." 21 DOLAN emailed Francis to alert him that he had or would perform offic ial 22 acts or exert pressure on others on GDMA's behalf. 23 about untimely transportation provided by GDMA during the CARAT Thailan 24 exercise, DOLAN wrote of his efforts to intercede : "Jose [Sanchez] an 25 I will try to def lash this . " 26 27 On July 9-10, "P.S. 2009, Related to complaint A167. On or about July 21, 2009, DEGUZMAN, using his personal email account, emailed Francis, inquiring: "Will you be in Singapore nex 28 55 I wanted to discuss something with you that may cement GDMA' 1 week? 2 position as the USN's husbanding agent." 3 Al68. On or about July 26, 2009, LAUSMAN, now the Commandin 4 Officer of the aircraft carrier U.S.S. George Washington, 5 to provide additional water taxis to ferry sailors off of the U.S.S. 6 George Washington during its upcoming visit to Manila. 7 LAUSMAN' s request to a GDMA employee: s and Manila. 9 asked Francis Francis forwarde "CO' s concern for both Singapor We have to make this happen for him! ... If the Officer] buys our [w]ater taxies, 10 entire package. 11 NO 1 Fan." [Commandin [the Supply Officer] has to accept th We will be good to go, Capt Too Tall [LAUSMAN] is ou 12 Al69. On or about July 29, 2009, Sanchez sent Francis an emai 13 advising that HERRERA was exerting pressure on and advocating befor 14 other 15 Thailand: 16 like this is going to happen ) ." On or about September 22-26, 17 U.S.S . 18 Thailand, at a cost to the U . S . Navy of over $1.5 million. U.S. Navy "Choke Ronald Al70. 19 officials [HERRERA] Reagan, to route the U . S. S . Abraham Lincoln t is pushing for REAGAN to go to Phuket (look in fact, conducted On or about August 10, a 2009, port visit LAUSMAN sent 2009, to th Phuket, Francis a 20 email regarding a variety of topics about the upcoming port visit of th 21 U.S.S. George Washington to Manila, 22 email: "Your obedient and humble servant." 23 24 25 Al71. On or about August Philippines. 19, 2009, LAUSMAN signed hi SHEDD sent Francis th roster of U.S. Navy Flag Officers for August 2009. Al72. On or about August 21, 2009, HERRERA sent 26 email confirming, 27 you can now contact me at chachi09@cooltoad.com . " 2s Sanchez emailed Francis, Francis a "I've just sent a good update to J[ose Sanchez], plu copying HERRERA: 56 On August 21, 2009, "Forwarded updates per you 1 request. 2 contained excerpts of other email from "Mr. 3 from the cult classic, 4 [SANCHEZ] and listed future port visits for numerous U . S . Navy ships fro 5 September to November 2009. 6 Mr. 'Choke' Al73. Anderson was very The Matrix, sked.. 21, 2009, Hoping email T.A. Anderson" - a monike to Mr . Smit HERRERA emailed Franci 7 stating, 8 something in Thailand, but not likely , Vr, Choke." 9 visits for the U.S.S. Blue Ridge for through November 10 , 2009. 10 Current Sanchez's adopted by HERRERA - On or about August "Leonard, helpful." Lumut visit goes away fo The email listed por Sanchez' email account, navy94 @cooltoad . com, was copied thereon. 11 Al74. an On or about August 25, email them for HERRERA 13 instructing them to send ships to Phuket, Thailand: "Thanks Thomas Choke, 14 Jose 15 familia here© [S]end the BHR ESG [U . S.S. Bonhomme Richard Expeditionar 16 Strike Group] 17 [Lion King] 18 to Thailand please." 19 ESG, 20 cost to the U.S . Navy of over $500,000. educate the BEAN counters ships to Phuket, Christmas [Francis] needs a party. in fact, updated [at FISC] , and Terminal, priceles 2009, Thailand, the B at 2009, Francis purchased the Por Klang 23 market to the U.S. Navy as an option for port visits. Al76. it's a an Too many ships to Singapore mor 22 24 Port schedules is approaching and Santa L conducted a port visit to Phuket, Star Cruise ship On or about October 29-November 3, Al75. On or about August 28, 21 the Francis sent Sanchez an 12 [Sanchez] thanking 2009, which he In early September 2009, began to aggress i vel Francis sent Sanchez an email 25 commenting on the conspiracy and assessing several members of the U.S. 26 Navy: 27 Fleet] 28 will self-destruct in due time. Let's study [a U . S. Navy Captain] durin "Jose, We are familia, [JM, a U.S. Navy civilian in the Pacifi is stirring shit now that he has moved back across the fence. H 57 ., 1 the swing? Every sailor has a weakness somewhere?" On 2 September 2, 2009, Sanchez in response wrote: "Thank you sir ... you ['re ] 3 correct about familia, 4 don't think he has a clue, but he is stirring things up and [the U.S. 5 Navy Captain] 6 [the U.S. Navy Captain] and find out ... Will pulse Choke [HERRERA] abou 7 the AOR ship lists, our boy from down under [AG] should be taking this 8 on. Choke is definitely stepping up with updates, and will still be abl 9 to be engaged from CNFJ [Command Naval Forces Japan, HERRERA's subsequen and I think your spot on -concerning is eating it up. ass i gnment] . " 11 Unable, 12 conspirators began to refer to him as Captain "Pubic Hair . " 13 to tempt ·a bou [JM], bu Will pull out the magnifying glass o 10 ultimately, or the U.S. Navy Captain, Al77. On or about September 8, Francis and hi 2009, Sanchez alerted Franci 14 and HERRERA that the cooltoad.com network was temporarily inaccessibl 15 aboard the U.S. S. 16 interruption, 17 and HERRERA that he 18 updated 19 September 14, 2009, among other dates. 20 Blue Ridge. To remedy the ongoing communication on or about September 13, classified 2009 , Sanchez advised Franci would establish a ship schedules to Facebook account Francis, which he transmi did Al 78. On or about September 19, 2009, Sanchez wrote to Franci 21 from his Facebook account: 22 and is an option in case Lumut, 23 boss might push it over the top© ... [M]ore to follow." 24 to Al79. "By the way, Port Klang seed has been lai [Malaysia] falls off, your Beginning on or about October 16, 2009 and continuin 25 until the port v isit, Sanchez used his Facebook account to communicat 26 with Francis about the upcoming port visit by the U.S . S. Blue Ridge i 27 Kuala Lumpur, 28 following group are part of the Wolf stating: "Sir, for KL 58 [Kuala Lumpur] Pack, Choke and Singapore, th [HERRERA], myself, ·1 [officer] , [officer] , [and of fi cer] . As we get near, wouldn't mind t 2 see some pictures for a bit of motivation." Francis replied: 3 arrange a nest for you guys and some birds." 4 using a favorite tagline coined by DOLAN: "Yummy ... daddy like. 5 days left ©." 6 Al80. On or about October " [W] il Sanchez greedily confirmed, 25, 2009, HORNBECK, Only using hi 7 personal email address hosted by hotmail. com, advised Francis that h 8 had been assigned aboard the U.S.S . Carl Vinson, and expected to retur 9 to the Seventh Fleet AOR the following year. 10 Al81. On or about October 26-28, 2009, during a port visit of 11 the U.S.S. Blue Ridge to Kuala Lumpur, Malaysia, Francis paid f or hotel 12 accommodations and the services of prostitutes for HERRERA, Sanchez, an 13 other U.S. Navy Officers. 14 Al82. On or about October 29-November 3 , 2009, during a port 15 vis it of the U.S.S. Blue Ridge to Singapore, Francis again paid for hotel 16 accommodations and the services of prostitute s for HERRERA, Sanchez an other U . S. Navy Officers. Al83. 19 2009, On or about December 7, email the updated December 2009 Flag Roster. Al84. On or about December 9, 20 a job: "Would you know 2009, 21 soliciting 22 Singapore / Asia for a guy with my background?" 23 SHEDD sent Francis vi of Al85. On or about December 13, NEWLAND emailed Franci any job opportunities i 2009, Aruffo sent Francis a 24 email confirming that he delivered various lavish Christmas gifts t 25 LAUSMAN and others and recounting a conversation that he had with LAUS 26 regarding sending U. S. Navy ships to the port that GDMA owned in Port 27 Klang, Malaysia: "I chatted with [LAUSMAN] for about an hour, he had lot 28 of questions about the GDMA Star Cruise Terminal, 59 I happened to have ·, 1 brochure in the car. He's a big supporter, mentioned that he was thankful 2 for your generosity as 3 friendship discrete." 4 Al86. a friend, Following an and that email we can manage to keep ou that Francis sent to SHEDD' 5 cooltoad.com account requesting insights on the personalities of several 6 officers nominated for high level positions in the U.S. Navy, on or abou 7 January 15, 8 cooltoad.com account frequently, Franc is should alert SHEDD of any email 9 sent to SHEDD's cooltoad . com account. 2010, SHEDD responded that, 10 for the delay - 11 If 12 steve . shedd@navy . mil." something 13 Specifically, SHEDD wrote: "Sarr I haven't been checking toad as frequently as I should. comes Al87. because he did not check hi On up, you can shoot me or about February 24, a 'check 2010, toad' HERRERA, message t from Cornman 14 Naval Forces Japan, 15 husbanding agent, not GDMA, to provide services to transiting Royal Thai 16 Navy ships visiting Japan. 17 "Mario HERRERA over at CNFJ has been [the] 18 talked to [HERRERA] , he wil l he lp lean them o ur way... • 19 Al88. alerted Francis that FIS C was recommending a local In a bravo Aru ff o zulu joined the email string, point of contact, letter dated April 7, noting, I 2010, LAUS 2o lauded 21 Washington by GDMA and Francis: "As we begin the planning for our 22 deployment cyc l e, your wide range of advanced planning, support services, 23 f o rce protection, ·24 set your organization, 25 and beyond any other contract service providers in the Pacific ... I canno 26 overstate my sincere appreciation for the quality cus tomer support you 27 team of professionals have provided to my ship. The statement 28 you' the sh ip husbanding services logistics expediting, rendered to the U . S. S. and emergent service requests, and most importantly, your employees far abov is the ultimate compliment . You have earned this trust ... " 60 'I trus Al89. On or about May 23, 2009, 1 2 with pictures of himself in Russia. 3 & 4 responded: Sanchez mused: Frank Sinatra said... life is about wine, s Sanchez sent Francis an email "Just like woman and song. © ! " [DOLAN] Franci I need the GW and Pel[eliu] ARG Seed." Al90. On or about June 3, 2010, LAUSMAN sent Francis an email 6 which telegraphed that the U.S. S . George Washington would be making 7 port visit to Francis' s port in Port Klang, Malaysia: 8 to seeing you again welcoming us into port. ©" Francis forwarded thi 9 email to several GDMA employees with the comment: 10 U.S. S. 11 Termina l next month." 12 George Washington] informing me that he "Looking forwar "From the CO of [th is on the way to ou Al91. On or about June 18, 2010, Aruffo sent Francis an email 13 describ i ng 14 indicating to Francis that he would attempt to ascertain whether th 15 U.S. S. 16 Malaysia: "I will ask LAUSMAN' s wife if she is heading to [KL] 17 a George party that Washington he was was planning scheduled Al92 . On or about June 19, 2010, for to LAUSMAN's travel to wife, Kuala an Lumpur, ©." LAUSMAN emailed Francis, "I 18 would like to quietly explore the possibility of new ports for GW [th 19 U. 20 Kinabalu[,] maybe for next summer." s. s. George Washington] [;] of course at the top of the list is Kot 21 Al93. On or about June 21, 2010, LAUSMAN emailed Francis about 22 an upcoming port visit for the U.S . S. George Washington to Francis's port 23 at the Port Klang Cruise Center, Malaysia. 24 I can confirm an 'RMN' 25 the Swiss Chalet restaurant... 26 the Shang[ri-La] ... and if you'd like I can have him pop over to discus 27 room options with [LAUSMAN' s wife]." Francis asked LAUSMAN if there wa 28 a potential for the U.S . S . George Washington to visit Singapore. Francis replied, "Right no [Royal Malaysian Navy] hosted dinner arranged at [Aruffo] 61 has the details and options fo LAUS 1 replied, "I am trying to get [the 2 [Singapore] 3 was cancelled, about which LAUSMAN wrote, "Sorry for the false start wit 4 PK [CC]... 5 opening up new ports with GW and revisiting old ones as well." later in [the] year." [HJ ope the U.S. S. Ultimately, uncertainties will George Washington] t the port visit to PKC clear soon... looking forward t 6 Al94. On or about June 26 , 2010, Francis sent Aruffo an email: 7 "We need more business at our terminal [Port Klang Cruise Center, PKCC, 8 Malaysia], keep hitting on Dusek. 9 on the changes f or his seed." Too Tall [LAUSMAN] dropped me a not 10 A195. Beginning in or around July 2010, when Dusek was servin 11 as Deputy Director of Operations for the Seventh Fleet, Dusek joined th 12 ongoing 13 including meals, alcohol, entertainment, dozens of nights and incidental 14 at luxury hotels, gifts, and the services of prostitutes, in return fo 15 Dusek's providing to GDMA, classified U.S. Navy ship schedules and othe 16 proprietary, internal U.S. Navy information, and as opportunities arose, 17 using his position and influence within the U.S. Navy to benefit GDMA. 18 A196 . On or about July 6 , 2010, Aruffo sent Francis an emai 19 advising, "Just chatted with LAUSMAN , he would like to start socializin 20 his upcoming schedule," to which Francis responded to Aruffo, "In 1 hou 21 pass him [LAUSMAN] the Cigars." 22 conspiracy, whereby GDMA woul d give Dusek things of value, A197. On or about July 11, 2010, Aruffo sent Francis an email 23 recounting a conversation in which LAUSMAN revealed the schedule of th 24 u·.s . s. George Washington: "GW [U.S.S. George Washington] is still in th 25 air, but their current plan is Singapore on 16 Aug and Manila on 2 Sep. 26 27 Looks like PKCC [Port Klang, Malaysia] but [LAUSMAN] is still working . " 28 62 is a non starter this time, 1 Al98. On or about July 19, 2010, GDMA paid for a hotel roo 2 for Dusek and his family at the Marriott Waikiki, and less than a mont 3 later, on or about August 5, 2010, GDMA provided Dusek with a hotel 4 at 5 provided Dusek with the services of a prostitute. 6 Francis, 7 behalf in bringing the aircraft carrier, the U.S.S . Abraham Lincoln, an 8 its associated strike group, 9 owned by Francis . the Shangri-La Hotel in Makati, and Aruffo asked Dusek Philippines and while there, to exercise to Port Klang, interests in this regard, Dusek emailed Aruffo on August 21, 11 with NOO 12 choice." 13 had "everyone in agreement that the next [Carrier Strike Group] 14 the AOR will stop at PKCC. 15 conversation with Aruffo on or about September 17, 2010, Dusek reporte 16 "a lot of push back on PKCC" but that "he will be able to overcome an 17 get the carrier 18 Lincoln Carrier Strike Group did, 19 Klang Cruise Center on or about October 8-12, 2010. today and convinced him that "good discussio PKCC is the bette On or about August 24, 2010, Dusek reported to Francis that h Al99. 20 reporting a a lucrative por 10 [Admiral] 2010, his Malaysia, In furtherance of GDMA' s GD Dates will be 08-12 Oct." [U . S . S. Abraham Lincoln] in port." in fact, On or about October 6, throug In a follow u The U.S. S . Abraha make a port visit at Por 2010, a GDMA employee sent a 21 email to Francis confirming that LAUSMAN received a 22 bowls for which GDMA paid 26,680 Thai baht ($834 USD). 23 A200. 24 email boasting, 25 see who she brings along to the party on 17 Dec [ember] . " 26 a picture of a wrapped iPad to this email . 27 wrote to Francis: 28 the iPad, On or about December 9, 2010, Aruffo sent Francis a "Here is your Christmas iPad for "Met [LAUSMAN' s wife] she is happy." Aruffo attache On December 13 , 2010, Aruff today, For Christmas 2010, 63 [LAUSMAN' s wife], will she got the flowers an Francis also provided a ·, 1 iPad to Dusek, among others, and boxes of ten-count steaks valued at $900 2 per box to LAUSMAN, Dusek, and others. 3 A201. On or about December 28, 2010, HORNBECK sent an email t 4 Francis advising him that the U. S.S . Kitty Hawk Carrier Strike Grou 5 would be visi ting Port Klang in January 2011. 6 A202. On or about February 12, 2011, HORNBECK sent Francis a 7 email asking for a job with GDMA . 8 question for you. 9 on whether I remain in the Navy for one more tour after this or whethe In the email, HORNBECK wrote , "Quic Am within a few months of needing to make a decisio 10 I wrap it up. 11 in about a year . 12 thoughts." 13 be an honor to have you aboard but presently the USN has been taking, i 14 my opinion, 15 visits and husbanding. This has affected our naval support arm, which w 16 have been actively downsizing over the last year as a result. 17 I do believe that things may improve in the next few years when an offe 18 could be considered. 1 9 picking 20 Wanted to see if you have room wit hin your organizatio Have attached a copy of my bio - would appreciate you Francis responded to HORNBECK in an email stating, "It woul extreme measures to cut cost with their focus being port up again it Howeve I will keep this in mind and when things star would be my privilege to discuss a caree opportunity." 21 A203. On or about April 1, 2011, HORNBECK and Francis exchange 22 emails regarding HORNBECK' s efforts to exert pressure on and advocat 23 before other U.S. 24 Vinson make a port visit in Thailand in May 2011 . 25 informs me 26 HORNBECK responded, "Look forward to seeing you . 27 to push that through 7™ FLEET to make it happen, 28 hearing anything through CTF70 yet." Navy Officers with the intent that the U. S. S. Carl Francis: "My [i] nte that we will meet up in the land of smiles next month." 64 Need the Country Tea though. We aren't Francis replied, "I have the date 1 from the Country [T]eam after I planted the plan with 7FL at PKCC wit 2 [the VADM] and Staff. I am in Bangkok on Monday and will ensure it pulls 3 true. 2nd to 6th May." 4 A204. On or about July 30, 2011, Francis wrote LAUSMAN in th 5 context of an upcoming port visit, pierside, by the U.S.S. Georg 6 Washington in Laem Chabang, Thailand . 7 LAUSMAN to advocate within the U.S . Navy to send ships to the Port Klan 8 Cruise Center and Kota Kinabalu: 9 Klang C [ruise Center] or Kota Kinabalu." In the email string , Francis urge "I hope you have not forgotten Por LAUSMAN responded: "Have no 10 forgotten the former since we did all of the advance work with you an 11 had it canceled.. still trying to encourage the latter... love to talk abou 12 the potential when I see you [.]" A205. 13 On or about August 24, 2011, Aruffo emailed Franci 14 advising: "[LAUSMAN'S wife] mentioned that you were talking to her abou 15 this trip 16 you... [LAUSMAN] will be taking the week off, so he is available, think h 17 is looking for you to fund another family vacation." [to Japan] , she said you may be taking [the LAUSMANS] wit 18 A206. On or about October 13 -15 and 11-17, 2011, respectively, 19 incident to a port visit of the U.S.S . George Washington to Singapore, 20 Francis arranged and subsidized the LAUSMANS's and another U.S . Na 21 couple's stay at the Shangri-La Hotel, Singapore, at a cost to Franci 22 of over $3,000. 23 A207 . On or about October 18, 2011, LAUSMAN emailed Francis, 24 disclosing that the U.S. S. Mustin was deploying to Thailand to rende 25 assistance to flood vict ims: 26 very short fused. 27 within 28 flooding ...don't know who knows this yet." 24 "Keep this between us only. Late breakin [U]nofficial from me. MUSTIN is looking to go into por hours ...possibly [Laem Chabang] 65 to provide COMSERV fo A208. 1 On or about November 11, 2011, Francis purchased 2 designer purse from a Versace store in Hong Kong for $11,345.83 SGD, 3 which he gave to LAUSMAN'S wife on or about November 12, 2011. 4 about 5 referenced the Versace purse: 6 got back to the room I opened it up and it was a Versace purse. 7 looked at the bag more closely I noticed one of the letters which was i 8 gold was broken off and in the bag. 9 letters it too cracked off . November 13, 2011, LAUSMAN's wife sent Aruffo an email " Leonard gave me a lovely gift. Ono whic When I When When I touched one of the othe [W] e went over to the Versace store an 10 they had the same purse, and they said they would send it in to get i 11 repaired." 12 if you still have it," to which LAUSMAN'S wife agreed, confirming, "Dav 13 [LAUSMAN] ... will give the bag to [the GDMA employee] when she comes o 14 board to pay bills with the [U.S.S . George Washington Supply Office r] i 15 the morning ." 16 Aruffo replied: "Best to hand it to [another GDMA employee ] A209. On or about November 14, 2011, the GDMA employee wrot 17 to Francis, "I have the Versace bag with me," and confirmed, "[Versace] 1S- replaced it with a new one .... They sent their apologies." 19 20 21 A210. Francis subsequently arranged the replacemen Versace bag to be mailed to LAUSMAN 's wife. A211. On or about January 18, 20 12, Francis and a GDMA employe 22 exchanged emails discussing a 23 provided for the LAUSMANS at a cost of $550 SGD . 24 for A212. On or about golf outing in October 2011 January 31, 2012, SHEDD, that GD using a ne 25 cooltoad.com account, cigarll@cooltoad.com, with the handle John Smith, 26 alerted Francis: 27 U.S.S . Milius, of which SHEDD was the Executive Officer, "would pull int 28 Port Klang, Malaysia in a week." "I'm back up on 'toad'" and advised Francis that th SHEDD continued, "If you don't happe 66 . 1 to be in Kuala Lumpur next week, 2 trip in the July timeframe. Not sure of port visits, but we are talkin 3 with 4 Kinabalu, 5 you to meet - 6 from 7 Indonesia and of course Phuket. 8 expensive for the sailors and so are the hotels . " Seventh Fleet Hong Kong, me!" 9 to hit two or Manila. I hope we can link up on our retur ports out responded: George Kot [supply officer] fo "May I suggest that you visit Bali, Singapore and Hong Kong are just to Washington from 11 including the FLC 12 Busan, Korea: 13 and cost effective services critical to the success of our port visit. 14 The fact 15 with [GDMA] as the 16 their professionalism was evident in the exceptional support provided . " in Yokosuka, to LAUSMAN transmitted a cabl 10 17 U.S.S. Singapore, Let me know if you need anythin A213. On or about June 12, 2012, the Phuket, I've got a good he's our kind of guy. Francis of Japan, several praising GDMA' s "As husbanding service provider, that GW was the first CVN A214. U.S. Navy commands , performance [GDMA] provided flexibl [aircraft carrier] to visit Busa [husbanding service provider] was transparent On or about July 6, 2012, i Francis, [sic], having received 18 laudatory personal email from LAUSMAN regarding the port visit in Busan, 19 sent LAUSMAN an email asking for the "favor for an official letter an 20 AAR [after action report] message to include NAVSUP FLC Site Singapor 21 and C7F. 22 as we expand our service into Korea." 23 on or about August 2, 2012, LAUSMAN wrote an after action report addresse 24 to the Fleet Logistics Center in Yokosuka, 25 GDMA's performance supporting the U.S.S. 26 Busan, 27 undoubtedly 28 witnessed. Such documentation would help solidify GDMA's performance fil Korea: Having received Francis' s request, Japan which effused about George Washington's visit t "Compared to the previous eight the smoothest execution of [port visits], service and support this wa I hav What is especially noteworthy is that this was the first 67 u 1 Navy visit 2 Provider (HSP). I would like to tell you the transition of providers wa 3 absolutely flawless 4 professionalism, 5 LAUSMAN concluded with a request to provide additional insights on hi 6 views on GDMA' s acumen: "I would like to offer up my team's operational 7 expertise throughout the [Seventh Fleet's Area of Responsibility] to yo 8 and your contract managers. 9 on what works and what does not work and to help shape the services that 10 to Busan under your newly ... I was contracted Husbanding extremely pleased at Servic the performance, and service provided by the newly contracted HSP." We are standing by to give our perspectiv are provided at ports throughout the Seventh Fleet." 11 A215 . Around the time of LAUSMAN's change of command ceremony, 12 marking his departure from the U.S.S. George Washington, which occurre 13 in Yokosuka, Japan on or about August 11, 2012, Francis gave LAUSMAN 14 John Paul Jones fountain pen, worth over $2,000. 15 2012, LAUSMAN wrote to Francis: "Thank you for a very special and relaxin 16 evening. 17 perfect day. 18 a bottle of ink .. :)" The simple elegance of the evening was the perfect end to I will write you a letter when we get to Hawaii and I ge A216. 19 On or about August 12, In an effort to conceal the nature and extent of hi 20 corrupt relationship with Francis and obstruct the investigation int 21 his 22 investigators, and otherwise obstructed justice, as follows: conduct, 23 LAUSMAN i . destroyed evidence, made false statements t On or about September 16, 2013, in an interview wit 24 Special Agents from the NCIS and DCIS, LAUSMAN denied that GDMA had eve 25 paid for or subsidized a hotel room for him. 26 GDMA had ever booked or reserved a hotel room for him, LAUSMAN responded: 27 "Not for me. I've always called ahead of time and gotten rooms under m 28 name." 68 When then asked whethe 1 ii. On or about September 16-17, 2013, after bein 2 contacted by NCIS and DCIS Special Agents, 3 drive 4 contained classified information, including documents and emails he sen 5 and received while acting as the Commanding Officer of the U.S.S. Georg 6 Washington. that he 7 had removed from the LAUSMAN destroyed a U.S . S. iii. On or about February 19, George 2014, Washington har whic during an intervie 8 conducted at the Office of the United States Attorney for the Souther 9 District of California, LAUSMAN made the following false statements: 10 LAUSMAN denied ever attending a reception hosted by GDMA or Francis; 11 (2) LAUSMAN denied that Francis ever booked or paid for hotels for him. A217. 12 In an effort to conceal the nature and extent of hi 13 corrupt relationship with Francis and obstruct the 14 his 15 otherwise obstructed justice, as follows: conduct, LOVELESS 16 17 18 i. made statements On or about November 5, to 2013, investigators, during an intervie ith an NCIS Special Agent, LOVELESS, when asked if he had ever receive 'anything" of value from Francis, replied: 19 ii. with an NCIS Special Agent, 21 a 22 replied: hotel "Never." On or about November 5, 20 23 false investigation int room during his 2013, during an intervie Loveless, when asked if had ever stayed i time in the Navy for which he did not pay, "No . I don't think so." A218. Continuing throughout the duration of this conspiracy, 24 pursuant to their corrupt relationship, 25 and Aruffo with classified schedules of projected port visits by U.S. 26 Navy vessels 27 requested to do so by Francis and Aruffo. 28 in person to Aruffo at the GDMA office in Japan or emailed them direct! approximately dozens of 69 Dusek provided GDMA, Francis, times and whenever specificall Dusek delivered these schedule .. 1 to Aruffo and Francis, taking steps to avoid detection by law enforcemen 2 and U.S. Navy personnel. A219 . 3 On or about September 17, 2013, upon learning tha 4 Francis, and others had been arrested, Dusek deleted the contents of hi 5 emai l account in an effort to avoid detection by law enforcement. 6 All in violation of Title 18 , United States Code, Section 371. COUNT 2 - Bribery (DAVID NEWLAND) 7 (18 U.S.C. § 201 (b) (2) (A) and (C)) 8 9 10 37. Paragraphs 1 through 30, and 36 of this Indictment are re - alleged and incorporated by reference . 11 38. Beginning in or about February 2006 on the high seas and ou 12 of the jur i sdiction of any particular district, 13 at 14 aka "Newly," a public official , engaged in a course of conduct whereb 15 he 16 accepted, and agreed to receive and accept things of value, personall 17 and for other persons, 18 services 19 performance of official acts and in return for being induced to do 20 omit to do acts in violation of his official duties, 21 arose. 22 All in violation of Title 18, United States Code, Section 2 01 (b) (2) (A) 23 and (C) . least in directly of or and about September indirectly, 2013, corruptly and continuing defendant demanded, including entertainment, prostitutes, in return for being DAVID sought, hotel stays, influenced and in as opportuni tie COUNT 3 - Bri bery (ENRICO DEGUZMAN) (18 U.S.C. § 201(b) (2) (A) and (C )) 24 25 26 27 39. Paragraphs 1 through 30, and 36 of this Indictment are re- alleged and incorporated by reference. 28 70 40. 1 Beginning in or about February 2006 on the high seas and ou 2 of the jurisdiction of any particular district and continuing through a 3 least in or about September 2013, defendant ENRICO DEGUZMAN, aka "Rick," 4 a public official, s and indirectly, engaged in a course of conduct whereby he directl corruptly demanded, sought, received, accepted, an 6 agreed to receive and accept things of value, personally and for ot h e 7 persons, 8 of prostitutes , 9 official acts and in return for being induced to do and omit to do acts including entertainment, hotel stays, gifts, and the service in return for being influenced in the performance of 10 in violation of his official duties, as opportunities arose. 11 All in violation of Title 18, United States Code , Section 20l(b) (2) (A) 12 and (C) . 13 COUNT 4 - Bribery (18 U.S.C. § (DONALD HORNBECK) 201(b) (2) (A) and (C)) 14 15 41. 16 17 20 21 22 23 24 25 26 27 28 and 36 of this Indictment are re- alleged and incorporated by reference. 42. 18 19 Paragraphs 1 through 30, Beginning in or about February 2006 on the high seas and ou of the jurisdiction of any particular district and continuing through at least in or about September 2013, defendant DONALD HORNBECK, aka "Bubbles," a public official, engaged in a course of conduct whereb he directly and indirectly, corruptly demanded, sought, accepted, and agreed to receive and accept things of value, personall and for other persons, services of including entertainment, prostitutes, in return for being hotel stays, influenced and in th performance of official acts and in return for being induced to do an omit to do acts in violation of his official duties, arose. 71 as opportunities 1 All in violation of Title 18, United States Code, Section 20l(b) (2) (A) 2 and (C). 3 COUNT 5 - Bribery {JAMES DOLAN) (18 U.S.C. § 201{b){2){A) and {C)) 4 5 6 7 43. Paragraphs 1 through 30, and 36 of this Indictment are re- alleged and incorporated by reference. 44. Beginning in or about January 2008 on the high seas and out of 8 the jurisdiction of any particular district and continuing through a 9 least in or about September 2013, defendant JAMES DOLAN, aka "JD," 10 public official, engaged in a course of conduct whereby he directly an 11 indirectly, 12 to receive and accept things of value, personally and for other persons, corruptly demanded, sought, received, accepted, and agree 13 including entertainment, hotel stays, and the services of prostitutes, 14 in return for being influenced in the performance of official acts an 15 in return for being induced to do and omit to do acts in vio lation o 16 his official duties, as opportunities arose. 17 All in violation of Title 18, United States Code, Section 201 {b) (2) 18 and {C). (A) COUNT 6 - Bribery {BRUCE LOVELESS) (18 U.S.C. § 201{b) (2) {CJ) 19 20 21 22 23 45. Paragraphs 1 through 30, and 36 of this Indictment are re- alleged and incorporated by reference. 46. Beginning in or about July 2007 on the high seas and out of 24 the jurisdiction of any particular district and continui ng through at 25 least in or about September 2013 , 26 off icial, 27 indirectly, 28 to receive and accept things of value, personally and for other persons, engaged in a course corruptly demanded, defendant BRUCE LOVELESS, of conduct sought, 72 whereby received, he a publi directly accepted, an and agree 1 including entertainment, 2 in return for being induced to do and omit to do acts in vio l ation o 3 his official duties, as opportunities arose. 4 All in vio l ation of Title 18, United States Code, Section 201 (b) (2) (C). 5 COUNT 7 - Bribery (DAVID LAUSMAN) (18 U.S.C. § 20l(b) (2) (A) and (CJ) 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 47. Paragraphs 1 through 30, 23 24 and 36 of this Indictment are re- alleged and incorporated by reference . 48 . From in or about February 2006 on the high seas and out of th jurisdiction of any particular district and continuing through at least in or about September 2013, defendant DAVID LAUSMAN, aka "Too Tall," public official, engaged in a course of conduct whereby he direct l y an indirectly, corruptly demanded, sought, received, accepted, and agree to receive and accept things of value , personally and for other persons, including entertainment , hotel stays, and gifts, in return for bein influenced in the performance of official acts and in return for bein induced to do and omit to do acts in violation of his official duties , as opportunities arose. All in violation of Title 18, United States Code, Section 201 (b) (2) (A) and (C) . COUNT 8 - Bribery (STEPHEN SHEDD) (18 U.S.C. § 201(b) (2) (A) and (CJ) 21 22 hotel stays, and the services of prostitutes, 49 . Paragraphs 1 through 30, and 36 of this Indictment are re- alleged and incorporated by reference. 50. Beginning in or about May 2007 on the high seas and out of th 25 jurisdiction of any particular district and continuing through at least 26 in or about September 2013, defendant STEPHEN SHEDD, a public official, 27 engaged 28 corruptly demanded, in a course of conduct sought, whereby he received, 73 directly and accepted, indirectly , and agreed to receiv 1 and accep t th i ngs of value, personally and for other persons , includin 2 cash, entertainment, hotel stays, gifts, and the services of prostitutes , 3 in return for being influenced in the performance of official acts an 4 in return for being induced to do and omit to do acts in violat i on o 5 hi s official duties, as opportunities arose. 6 All in v i o l ation of Title 18, United States Code, Section 20 1 (b) (2) (A) 7 and (C) . COUNT 9 - Bribery (MARIO HERRERA) (18 U.S.C. § 201 (b ) (2) (A) and (C)) 8 9 51. 10 11 14 15 16 17 18 19 20 21 22 23 24 25 26 27 and 36 of this Indictment are re- alleged and incorporated by reference. 52. 12 13 Paragraphs 1 through 30, Beginning in or about May 2008 on the high seas and out of th juri sdiction of any particular district and continuing through at least in or about September aka "Choke OIC," a 2013, defendant public official, MARIO engaged HERRERA, in a aka course of "Ch oke," conduc whereby he directly and indirectly, corruptly demanded, sought, received, accepted , and agreed to receive and accept things of value, person all and for other persons, the services of including entertainment, hotel stays, gifts, prostitutes, in return for being influenced in performance of official acts and in return for being induced to do omit to do acts in vi o lation of his official duties, as opportunitie arose . All in violation of Title 18, United States Code, Section 201 (b) (2) (A) and (CJ . COUNT 10 - Bribery (ROBERT GORSUCH ) (18 U.S.C. § 201(b) (2) (A) and (C)) 53 . Paragraphs 1 through 30, and 36 of this Indictment are re-al l ege and incorporated by reference. 28 74 1 54. Beginning in or about February 2006 on the high seas and out of 2 the jurisdiction of any particular district and continuing through at 3 least in or about September 2013, 4 official, 5 indirectly, 6 to receive and accept things of value, personally and for other persons, 7 including engaged a course corruptly demanded, entertainment, s prostitutes, 9 in in return hotel for of defendant ROBERT GORSUCH, conduct sought, he directly received, accepted, stays, being whereby gifts, influenced and in the the a publi an and agree services performance o of official acts and in return for being induced to do and omit to do acts 10 in violation of his official duties, as opportunities arose. 11 All in violation of Title 18, United States, Code, Section 201(b) (2) (A) 12 and (C) . COUNT 11 - False Statements (DAVID LAUSMAN) (18 U.S.C. § lOOl(a) (2 )) 13 14 15 55. Paragraphs 1 through 30 of this Indictment are re-alleged an incorporated by reference . 16 56. 17 California, 18 willfully 19 representations in a matter within the 20 Branch of the United States, to wit: in an interview with Special Agent 21 of NCIS and DCIS, LAUSMAN said: a) he did not attend receptions hoste 22 by Francis; and b) 23 LAUSMAN. 24 57. On or about February 19, 2014, within the Southern District o defendant made These DAVID materially LAUSMAN, false aka and "Too Tall," fraudulent knowingly statements jurisdiction of the Executiv Francis never booked or paid for a hotel room fo statements and representations were false because, a 25 defendant DAVID LAUSMAN then and there well knew: a ) LAUSMAN attended, 26 and was photographed at, receptions hosted by Francis; and b) on numerou 27 occasions, including, among others, on April 30-May 4, 2008, May 4-10, 28 75 1 2008, and August 1-7, 2009, Francis booked and paid for hotel rooms fo 2 LAUSMAN. 3 All in violation of Title 18, United States Code, Section lOO l (a) (2) COUNT 12 - Obstruction of Justice (DAVID LAUSMAN) (18 u.s.c . § 1519) 4 5 6 7 8 9 58. Paragraphs 1 through 30 of this Indictment are re-al l eged a n incorporated by refer·e nce. 59. On or about September 16-17, 2013, within the Southern Distric of California, and elsewhere, defendant DAVID LAUSMAN, aka "Too Tall," 10 knowingly mutilated and destroyed a tangible object, to wit, a hard driv 11 containing documents and emails sent and received by LAUSMAN while h 12 was the Commanding Officer of the U. S. S. 13 intent to impede, obstruct, and influence the investigation and pro p e 14 administration of justice regarding a matter that the defendant knew wa 15 within the jurisdiction of NCIS, 16 agencies of the United States. 17 All in violation of Title 18, United States Code, Section 1519. 18 DCIS, George Washington , wi th th and the Department of Justice , COUNT 13 - Conspiracy To Commit Honest Service Fraud (All Defendants) (18 u.s.c . § 1349, 1346 & 1343) 19 20 21 22 23 60. Paragraphs 1 through 30, and 33 through 36 of this Indictme n t are re-alleged and incorporated by reference . 61. Beginning in or about February 2006 on the high seas and outsid 24 the jurisdiction of any particular district and continuing through a 25 least 26 DEGUZMAN, 27 "aka JD," BRUCE LOVELESS, DAVID LAUSMAN, aka "Too Tall," STEPHEN 28 MARIO February aka HERRERA, 2014, \\Rick, aka defendants 11 DONALD ''Choke, " DAVID NEWLAND, HORNBECK, aka 76 Choke aka aka \'Newly , " "Bubbles," OIC , " and JAMES ROBERT 1 (collectively "the defendants" ) did knowingly and intentionally conspir 2 and agree with each other and with others, 3 AG, Brooks, Sanchez, and Dusek, to devise a material scheme and artific 4 to defraud the citizens of the United States and the U.S. Navy of thei 5 rights to the honest, loyal, and faithful, services, decisions, actions, 6 and performance, 7 material 8 defendants g transmitted writings, signs, and signals by means of wi re communicatio Aruffo, through bribery and kickbacks and the concealment o information; and including Francis, and for their the purpose conspirators of executing this transmitted and caused scheme, to b 10 in interstate and foreign commerce, 11 conspirators. 12 All in violation of Title 18, United States Cod e , Sections 1349, 1346, 13 and 1343. 14 including many emails among th FORFEITURE ALLEGATIONS 15 62. 16 of this 17 alleging f orfeiture t o the United States pursuant to Title 18, Unite 18 States Code, 19 Section 246l(c). 20 63. The allegations set forth in Counts 1 through 10 and Count 13 Indictment are incorporated by ref erenc e Section 981 (a ) (1) (c), and Title 28, for the purpose of United States Code, Pursuant to Federal Rule of Criminal Procedure 32 .2, notice i 21 hereb y given to the above-named defendants that upon conv i ct ion o f th 22 o ffenses set forth in Counts 1 through 10 and Count 13, the United State 23 will seek forfeiture as part of a n y sentence in accordance with Title 18, 24 United States Code, 25 Code, Section 2461(c ) , including but not limited to all property, real 26 and p ersona l, which constitutes or is derived from proceeds traceable t 27 the offe nses of conspiracy, 28 services wire fraud, as alleged in this Indictment. Section 981 (a) (1 ) (c), bribery, 77 and Title 28, United State a nd conspiracy to commi t honest 64. 1 If any of the above-described forfeitable property, as a resul (a) be cannot locate 2 of any act or omission of the defendants - 3 upon the exercise of due diligence; 4 or deposited with, a third party; 5 jurisdiction of 6 value; or (e) 7 subdivided without difficulty; it is the intent of the United States, 8 pursuant 9 incorporates to the Court; (d ) (b ) has been transferred or sold to, has (c ) been placed beyond th has been substantially diminished i has been commingled with other property which cannot b Title the to 18, United provisions seek States of Title forfeiture 21, 246l(c) whic United States Code, Section 853(p), 11 defendants up to the value of the property described above as bein 12 subject to forfeiture. 15 person 16 20 21 ALANA W. ROBINSON Acting United States Attorney By: MARK W. PLETCHER PATRICK HOVAKIMIAN Assistant U. S. Attorneys 22 23 ANDREW Chief, Criminal Division 24 25 26 property ~ 14 19 other DATED: March 9, 2017. 13 18 any Section 10 17 of Code, Fraud Section, Criminal Division 27 28 78 of