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Retired Navy Officer Pleads Guilty in 'Fat Leonard' Corruption Case

FILE - Leonard Glenn Francis (right) was known as "Fat Leonard."
FILE - Leonard Glenn Francis (right) was known as "Fat Leonard."

A former Navy commander who retired almost a decade ago and was working in a key civilian post in the U.S. Special Operations Command Pacific has pleaded guilty to lying about his relationship with corrupt defense contractor Leonard Glenn "Fat Leonard" Francis.

David Kapaun, 58, pleaded guilty in federal court in Honolulu on Tuesday to a single charge of making false statements on a form submitted as part of his security clearance renewal in 2015.

When he filled out the form, Kapaun did not disclose that he had "numerous interactions" with Francis in the past, prosecutors said. The security clearance requires applicants to disclose all contacts with foreign nationals and foreign entities.

Francis, who has pleaded guilty in San Diego federal court to masterminding a years-long, multimillion-dollar bribery and corruption scheme involving the Navy, is a Malaysian.

At the time that Kapaun sought to update his security clearance, Francis -- who owned the ship servicing company Glenn Defense Marine Asia -- had already been arrested, indicted and pleaded guilty to bribery and other charges.

Kapaun served in the Navy for 25 years from 1983 to his retirement in 2008, according to an entry on his LinkedIn page. It did not list where he served, and that information was not available Wednesday.

Francis' scheme was centered on the Navy's Seventh Fleet, which operates across the Pacific, including Asia.

Since his retirement, Kapaun has worked as a civilian contractor and most recently served at the deputy chief of staff for the Special Operations Command Pacific, which plans, coordinates and directs all special forces operations in the Pacific.

He retired from that position earlier this year because of the investigation, said his lawyer, Victor Bakke.

Kapaun is the 21st current or former Navy official who has been charged in the "Fat Leonard" scandal, and the 11th to plead guilty. Five executives of GIenn Defense Marine Asia, including Francis, have also pleaded guilty.

For more than a decade Francis targeted Navy officers and enlisted men, plying them with cash, booze, fancy dinners, gifts, travel, entertainment and prostitutes in ports across Asia.

In return, he got them to steer ships to ports his servicing company controlled and slip him classified ship schedules. Once there, he gouged the Navy, overcharging for food, fuel and other work his company performed. The government pegs the known loss at $35 million.

Unlike others, Kapaun was not charged with bribery, but the plea agreement does say he received "various things of value from Francis in return for his official acts."

It also does not say when the "numerous instances" of contacts with Francis occurred or what his rank and duties were when they occurred.

Details of what Francis gave Kapaun also aren't included. The plea agreement, however, does say that Francis paid for "dinners, entertainment and the services of prostitutes" for Kapaun.

Bakke said investigators first contacted Kapaun about his statements in early 2016. Court records filed on May 24 in Hawaii show he was charged with fraud and false statements.

It's unclear how exactly Kapaun was connected to the Francis investigation, but Francis and several others who have pleaded guilty have been cooperating with investigators and his name could have surfaced that way.

"All I can say is he regrets being enticed by Leonard, just as many other Navy officers were," Bakke said on Wednesday. "He should have exercised better judgment and he didn't."

Kapaun is set to be sentenced on Sept. 11 in Hawaii. He faces a maximum of five years in prison. As part of his plea agreement, he agreed to pay a $25,000 fine and $50,000 in restitution to the government.

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Navy Crime