Assistant U. S. Attorneys Mark W. Pletcher (619) 546-9714 and Patrick Hovakimian (619) 546-9718
NEWS RELEASE SUMMARY– May 9, 2017
SAN DIEGO – Neil Peterson and Linda Raja, former executives of foreign defense contractor Glenn Defense Marine Asia (GDMA), pleaded guilty in federal court today to fraud charges, admitting that they conspired to submit bogus bids, claims and invoices to the U.S. Navy in an effort to win contracts and overcharge the Navy by tens of millions of dollars as part of a years-long corruption and fraud scheme.
Peterson, 39, and Raja, 44, both of Singapore, worked as chief deputies for foreign defense contractor Leonard Glenn Francis to fill the coffers of their company, Glenn Defense Marine Asia (GDMA), at the expense of the U.S. Navy. Peterson served as the Vice President for Global Operations for GDMA and Raja served as GDMA’s General Manager for Singapore, Australia, and the Pacific Isles.
Both defendants were arrested by authorities in Singapore at the request of the U.S. government and were extradited on Oct. 28, 2016. Sentencing for Peterson and Raja is set before U.S. District Judge Janis L. Sammartino on August 11, 2017 at 9 a.m.
According to Peterson’s and Raja’s plea agreements, they and other members of GDMA’s management team created and submitted fraudulent bids that were either entirely fictitious, contained falsified prices supposedly from actual businesses, or fraudulently stated that the business shown on the letterhead could not provide the items or services requested. In this manner, Peterson and Raja and other members of GDMA's core management team could ensure that GDMA's quote would be selected by the U.S. Navy as the supposed low bidder. GDMA could thus control and inflate the prices charged to the U.S. Navy without any true, competitive bidding, as required.
Peterson and Raja admitted that they and other members of the GDMA management team knowingly created and approved fictitious Port Authorities with fraudulently inflated Port Tariff Rates, and approved the presentation of such fraudulent documents to the U.S. Navy. GDMA thus charged inflated prices to the U.S. Navy, rather than what GDMA actually paid to the bona fide Port Authorities.
For example, for the visit of the U.S.S. Bonhomme Richard visit to Kota Kinabalu,Malaysia, in or about October 2012, under the direction of Peterson and other members of GDMA's core management team, false
documents and inflated invoices were presented to the U.S. Navy. The full amount billed to the U.S. Navy for this visit was $1,232,858, of which approximately $877,413 was fraudulently inflated.
Peterson and Raja admitted that losses to the United States Navy exceeded $34,800,000.
Twenty Navy officials have been charged so far in the fraud and bribery investigation.
In addition, five GDMA executives – Neil Peterson and Linda Raja as well as Francis, Alex Wisidagama, Ed Aruffo, – have been charged All five have pleaded guilty.Wisidagama was sentenced on March 18, 2016 to 63 months and $34.8 million in restitution to the Navy. Francis and Aruffo await sentencing;
The Defense Criminal Investigative Service, Naval Criminal Investigative Service and the Defense Contract Audit Agency are investigating. Assistant U.S. Attorneys Mark W. Pletcher and Patrick Hovakimian of the Southern District of California and Assistant Chief Brian R. Young of the Criminal Division’s Fraud Section are prosecuting the case.
Anyone with information relating to fraud or corruption should contact the NCIS anonymous tip line at www.ncis.navy.mil or the DOD Hotline at www.dodig.mil/hotline, or call (800) 424-9098.
DEFENDANTS Case Number: 14-CR-3703-JLS
Neil Peterson Age: 39 Singapore
Linda Raja Age: 44 Singapore
SUMMARY OF CHARGES
Conspiracy to Defraud the United States with Respect to Claims, in violation of 18 U.S.C. § 286
Maximum Penalty: 10 years in prison, a $250,000 fine.
INVESTIGATING AGENCIES
Defense Criminal Investigative Service
Naval Criminal Investigative Service
Defense Contract Audit Agency