A top US Navy criminal investigator has pleaded guilty to bribery stemming from a multi-million dollar fraud probe targeting an Asian defence contractor.
The conviction of Naval Criminal Investigative Service agent John Beliveau is a first for federal prosecutors in the massive scandal that has so far ensnared six navy staff and could lead to an expansion of the investigation if Beliveau co-operates with authorities in his plea agreement.
In federal court in San Diego, California, Beliveau admitted keeping Malaysian contractor Leonard Francis abreast of the years-long fraud investigation that NCIS agents were conducting on his company, Glenn Defence Marine Asia (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 claims GDMA overbilled the navy by at least 20 million dollars (£12.3m) 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, 44, who faces a maximum sentence of 20 years, said he was sorry. "I'm here to do the right thing, and that's what I did today," he said after the hearing.
His lawyer, Gretchen von Helms, declined to say whether her client would now help the investigation, saying only he was "ready to prove he is honourable".
"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. Prosecutors say 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 fake port authorities.
In exchange for the assistance from the navy staff, 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 Corgan, a Vietnam veteran who teaches international relations at Boston University, said.
"Something of the scope that this scandal embraces didn't happen without a reasonably widespread acceptance of bad practice."
Francis was arrested in September. His cousin, Alex Wisidagama, a company manager who was also arrested, has also pleaded not guilty in the case. Navy commander Jose Luis Sanchez and Cmdr Michael Vannak Khem Misiewicz have entered not guilty pleas.
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 US Navy and ultimately his own country," said US Attorney Laura Duffy.
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 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 will be held on March 7.