Last week, a former senior Navy official responsible for logistics and transportation operations was convicted on charges of bribery and lying to investigators, according to the Department of Justice.
Xavier Fernando Monroy, 64, the former director of operations for the Navy's Military Sealift Command in South Korea, was accused of soliciting and accepting bribes to direct Navy contracts to a private logistics company in exchange for money, meals, alcohol, and "the services of prostitutes," according to a Friday Justice Department press release.
In 2013, Monroy; James Driver, a civilian captain of a Navy cargo ship called the USNS Charles Drew; and Sung Yol "David" Kim, owner of DK Marine, allegedly "conspired to circumvent U.S. Navy procedures to steer business to DK Marine in connection with the Drew's late December 2013 port visit in Chinhae, [Republic of Korea]," according to Monroy's criminal complaint.
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Court filings said that Monroy and Kim were in contact as early as 2011. The case was investigated by the Defense and Naval Criminal Investigative Services.
The bribery allegations hinge on several instances of Monroy forwarding internal Navy emails about port visit schedules, contract logistics and, in one instance, a dredging project to Kim. It is unclear whether these communications were classified, though the prosecution asserted that the emails were "confidential" and that, as a Navy official, Monroy was not permitted to send them to Kim.
Kim, a South Korean citizen, told investigators that he gave Monroy more than $30,000 in "loans." Peter Brill, Monroy's attorney, pushed back on the prosecution's evidence, stating that much of it was founded on plea deal cooperation from Kim and Driver, contending that the loan amount was only $4,000, which Monroy paid back within four days.
"They have no evidence of that other than Mr. Kim's words," Brill told Military.com over the phone. "There's no documentation of it; the closest they could get was looking at all of his bank account activity and saying we can't identify where certain money came from, so therefore it must be illegal.
"That's kind of ridiculous if you think about it," he added.
Kim and Monroy's professional relationship quickly turned personal, according to court documents. Outside of well wishes over personal email and vacations to Thailand -- which special agents allege that Kim paid for -- "on at least ten occasions during the course of the conspiracy, Kim and Monroy went together to 'room salons,' where the services of prostitutes could be hired," according to his criminal complaint.
Brill confirmed that Monroy, Kim and Kim's wife traveled together "on a few occasions" to the Philippines and Thailand, but told Military.com that Monroy denies Kim paid for any of it. Monroy also denied soliciting sex workers, according to the lawyer.
"There's a difference between going out for drinks with your colleague," Brill said, "and having your colleague spend money on nights out and meals and prostitutes etc., which is really much more akin to the Fat Leonard [scandal]."
The Navy has been involved in numerous contracting fraud and bribery scandals in recent years. Most notably, as Brill mentioned, the "Fat Leonard" scandal was a multi-year saga in which authorities accused Leonard Glenn "Fat Leonard" Francis, chief executive officer of Glenn Defense Marine Asia, of bribing Navy officials with money, sex worker services and luxury items in exchange for classified material and contracting information.
Military.com also reported on a similar scandal last year in which a contractor allegedly defrauded the Navy of about $50 million in Bahrain.
Driver's involvement appeared to surface in 2013, according to court documents, when Monroy "repeatedly provided directions via telephone to Kim, which Kim conveyed to Driver via email" on how the ship captain could circumvent Navy procedures to get the USS Charles Drew serviced by DK Marine.
The Drew was supposed to be serviced by another company, identified as "Company 1" in court documents, which had already been awarded a Navy husbanding contract for South Korea earlier that year.
"On or about December 21, 2013, Monroy, Kim, and a representative of Company 1 met the Drew when it arrived in port at Chinhae, ROK," the criminal complaint said. "Over objections of the Company 1 representative, Driver chose to have Kim and DK Marine provide husbanding services for the Drew's visit, wth Monroy's acquiescence."
Brill told Military.com that Monroy is a Marine Corps veteran with more than 25 years of service, retiring as a master sergeant in 2000. Neither the Navy nor Marines could confirm Monroy's military service, though that does not mean he did not serve, as records of older veterans are typically kept in the National Personnel Records Center in St. Louis, Missouri, making details of their service harder to quickly obtain.
Monroy was also found guilty on Friday of lying to investigators during a 2019 interview.
Prosecutors alleged that Monroy made false statements by denying having a personal relationship with Kim, receiving compensation from Kim, or driving Navy business to his company.
Brill questioned what was said in those interviews and suggested that a stroke Monroy suffered in 2016 may have contributed to memory loss issues, though he did not address specific false statements.
"One thing that I'd like to get across is the fact that three of his past commanding officers or executive officers said things about him that you would hardly ever hear about another person," Brill told Military.com of Monroy's former military colleagues who were allowed to testify in front of the jury. "Just the level of honesty, integrity and dedication to his job and to the military were really unsurpassed."
Brill said that it is unclear whether Monroy will appeal and added that his client is out on bail, living with his family in New York while awaiting sentencing in November.
"We're going to focus on trying to make the best sentencing arguments we can, given his long service to this country," Brill told Military.com, "and hopefully the judge will recognize that sentence appropriately."
Driver, the Drew's captain, was indicted in 2018 for conspiracy and pleaded guilty the following year. He was sentenced to pay a $2,000 fine, according to court records. Driver is a Navy veteran and graduate of the U.S. Merchant Marine Academy, according to his sentencing memorandum.
Kim, who cooperated with investigators, was indicted for conspiracy and bribery. He pleaded guilty to conspiracy in 2020, according to Monroy's criminal complaint. His sentencing was rescheduled for next month.
Monroy faces a maximum sentence of 35 years in prison.
-- Drew F. Lawrence can be reached at drew.lawrence@military.com. Follow him on Twitter @df_lawrence.
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