The conviction of Naval Criminal Investigative Service agent John Beliveau II is a first for federal prosecutors in the massive scandal that has ensnared six Navy officials so far and could lead to an expansion of the investigation if Beliveau cooperates with authorities as part of his plea agreement.
In federal court Tuesday in San Diego, Beliveau acknowledged keeping Malaysian contractor Leonard Glenn Francis abreast of the yearslong fraud investigation that NCIS agents were conducting on Francis' company, Glenn Defense Marine Asia Ltd., or GDMA.
In exchange, Francis paid for plane tickets, hotels and prostitutes for Beliveau, according to the plea agreement. Francis has pleaded not guilty in the case that alleges GDMA overbilled the Navy by at least $20 million for port services. GDMA has provided fuel, food and supplies for Navy ships for 25 years.
According to the plea, Beliveau gave Francis detailed advice on how to thwart the investigation, leaking the names of witnesses and downloading hundreds of pages of confidential NCIS files to share with him.
Beliveau, who faces a maximum sentence of 20 years, said he is sorry for what he's done.
"I'm here to do the right thing, and that's what I did today," Beliveau, 44, said after the hearing in federal court in San Diego.
His attorney, Gretchen von Helms, declined to say whether her client would now assist the investigation, saying only he is "ready to prove he is honorable."
"This was a mistake generated by Mr. Francis, who knows of a man's weakness and exploited that," she said.
Two Navy captains have also been charged in the case. Prosecutors allege they provided Francis with confidential ship route information or directed the movement of Navy vessels to Asian ports with lax oversight so the company could inflate costs and invent tariffs by using phony port authorities.
In exchange for the assistance from the Navy officials, Francis, known in military circles as "Fat Leonard," lined up prostitutes, hotel stays and tickets to shows, including a Lady Gaga concert in Thailand, according to a criminal complaint.
"This isn't only bad news for Leonard Glenn Francis, but I suspect there are a number of yet unnamed Navy people who are (and should be) worried," Michael T. Corgan, a Vietnam veteran who teaches international relations at Boston University, said in an email.
"Something of the scope that this scandal embraces didn't happen without a reasonably widespread acceptance of bad practice," he wrote.
Francis was arrested in September. His cousin, Alex Wisidagama, a company manager who was also arrested, also has pleaded not guilty in the case. Navy Cmdr. Jose Luis Sanchez and Cmdr. Michael Vannak Khem Misiewicz have entered not guilty pleas as well.
Two admirals have lost security clearance and two other Navy officials have been relieved, but none has been charged.
Francis and Beliveau exchanged thousands of text messages, and at one point, the contractor bragged to an associate in an email: "'I have inside Intel from NCIS and read all the reports,'" according to court documents.
"This is an audacious violation of law for a decorated federal agent who valued personal pleasure over loyalty to his colleagues, the U.S. Navy and ultimately his own country," said U.S. Attorney Laura Duffy in a statement.
When authorities became aware that Beliveau was leaking information, they planted bogus reports in NCIS files, including one indicating that they were dropping the case against Francis, according to the prosecution.
Shortly after that, Francis flew to San Diego, believing he was meeting with Navy officials for business and was arrested, according to court records. Beliveau, who worked for NCIS for 11 years, was taken into custody that same day in Virginia.
A sentencing hearing has been set for March 7.