Charges dismissed against top intelligence officer caught in ‘Fat Leonard’ bribery case

Federal prosecutors in San Diego dismissed all charges against retired Rear Adm. Bruce Loveless in the “Fat Leonard” corruption scandal, deciding not to pursue a second trial on conspiracy, bribery and wire fraud charges against the former top intelligence officer in the U.S. Navy.

The decision was revealed in a terse, one-sentence filing in federal court late Wednesday from U.S. Attorney Randy Grossman. A spokesperson for the office declined to comment further on Thursday.

Loveless was one of five former Navy officers who went on trial earlier this year. A jury convicted four of the defendants but deadlocked on charges against Loveless.

The decision not to seek a second trial comes less than two weeks after the centerpiece of the scandal, defense contractor Leonard Glenn “Fat Leonard” Francis, escaped from house arrest at a Torrey Highlands mansion and went on the run. The federal government has offered a $40,000 reward for information on his whereabouts.

The government said that Francis showered the officers with lavish gifts, free trips, fancy meals and prostitutes while they served in the Seventh Fleet in the Pacific. In return prosecutors said the officers helped Francis by using their influence to steer ships to Asian ports where he controlled the ship-servicing business, enabling him to then gouge the government by wildly overcharging for work.

The officers also gave him classified information on ship schedules and ran interference for him against other ship-servicing businesses vying for work with the Navy. In all he shelled out about $500,000 in bribes and in return was able to defraud the service of at least $35 million.

It’s unknown if the escape had any impact on the decision not to retry Loveless. Francis, whose nickname stems from his ample girth, pleaded guilty in 2015 and agreed to cooperate with the government. But he was not called to testify at the trial, surprising the judge and defense lawyers. Prosecutors did not say why he was not called to the stand.

Thomas O’Brien, the lawyer for Loveless, told jurors that his client had never agreed to do anything for Francis. He told them during closing arguments in June that the massive investigation collected some 14 million documents.

But Loveless appeared in just six emails, he said, which were largely innocuous thank you notes, and did not provide Francis with inside information. Loveless attended a dinner paid for by Francis. But O’Brien said merely attending a dinner paid for by Francis did not amount to evidence of a bribe or a conspiracy.

The muted dismissal of charges against Loveless stood in sharp contrast to his arrest in March 2017. At that time federal agents who had been investigating Loveless for several years swept into the penthouse condo he was renting in Coronado in the early morning and took him into custody.

When he appeared in court later that afternoon he was clad in a white jail-issue jumpsuit and wore ankle restraints. A judge then said he could be released on his own recognizance and not have to post bond.

In all, 33 others — including Francis and his defense company — have been convicted or pleaded guilty in the Fat Leonard scandal. Francis was supposed to be sentenced next week, but whether or not that will go forward in his absence is not known.