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By Steve Limtiaco

HAGATNA, Guam (Pacific Daily News, June 10) –

Businessman Frederick Cochran, who scammed millions of dollars from the Guam Power Authority and the U.S. Navy, turned into a secret weapon for federal investigators targeting government corruption on Guam and in the Northern Mariana Islands, according to testimony yesterday in the U.S. District Court of Guam.

After the federal government nabbed him, Cochran spent hundreds of thousands of dollars of his own money to start businesses and maintain business contacts in order to help investigators.

Many of the corruption cases remain sealed, but former Republican Sen. Tommy Tanaka and former governor's chief of staff Gil Shinohara are among those who were convicted with Cochran's help, federal prosecutors told Judge Ricardo Martinez.

Cochran, 69, was in court yesterday to finally be sentenced for crimes he pleaded guilty to in 1995. Because of his cooperation, he was sentenced to probation instead of prison time.

Cochran and business partner Frank Santos in 1995 pleaded guilty to a scheme that involved selling oil to the power agency, siphoning it back through a secret underground pipe and reselling it to the utility. The scam started in the early 1980s.

Cochran repaid $8 million to the power agency and $1.4 million to Navy Public Works. He also paid a fine of $500,000, which grew to $631,433.54 while sitting in a government bank account. He agreed to let the federal government keep the interest.

Santos, who prosecutors said also has been cooperative, is scheduled to be sentenced at 9:30 a.m. June 15. Santos attended Cochran's sentencing yesterday afternoon with his attorney, David Lujan.

Prosecutors yesterday joined Cochran's attorney, John Moore, in arguing vigorously for a light sentence for Cochran.

"The cooperation of this defendant," was quite significant, said Assistant U.S. Attorney Joe Wilson. "The investigations that he participated in went to both the highest levels of the government of Guam and the government of Commonwealth of the Northern Mariana Islands."

Prosecutors told the court it was unusual to get 100 percent cooperation from someone like Cochran, who has close personal and business connections with government officials. "Extortion was the norm on Guam," Assistant U.S. Attorney Fred Black said.

Black said federal agents polled by prosecutors agreed that Cochran deserves probation or no more than a year in prison.

After hearing arguments, Martinez yesterday sentenced Cochran to five years of probation instead of the five years in prison Cochran and federal prosecutors agreed to in 1995.

Martinez cited Cochran's immediate confession and his cooperation with federal investigators as reasons to keep him out of jail.

A prison sentence is supposed to serve as a deterrent to others, Martinez said, but he said there was no sense in locking up Cochran.

"I don't think anybody gets anything out of that," Martinez said.

Cochran's sentence comes a decade after criminal charges were brought against him, and Martinez said he at first thought it was a typographical error when he saw that the sentencing was for a 1995 case.

But Black said the delay was caused by Cochran's ongoing cooperation with federal investigators.

Cochran's attorney, Moore, said the pending sentence took a psychological toll on Cochran during the past decade because he knew he wasn't really free.

"I take full responsibility for what I did; ... I knew better," Cochran told the judge before his sentence was handed down. He told the judge he paid back what he took, fines and more. "I've done my best and I've learned the lesson never to do wrong again."

Moore told the judge about Cochran's experience as a businessman on Guam -- a career that started in 1969 with a job at Gorco, providing fuel for the military.

Cochran soon learned the local government was corrupt, Moore said, and he operated under those conditions for 25 years.

"If you wanted to do business on Guam and survive, you pay," Moore said, otherwise "you're done."

Moore told the judge that government corruption has hurt health care, education and other public services on Guam by stealing money that is supposed to pay for those services.

"This has to stop," Moore said, adding that cooperation from people such as Cochran is the only way to penetrate that type of criminal activity.

"He was directly involved in securing 30 convictions," Moore said.

Moore told the judge that unless Cochran was given a lenient sentence in exchange for his cooperation, others might be unwilling to cooperate in the future.

June 10, 2005

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