The U.S. Navy is being rocked by a bribery scandal that federal investigators say has reached high into the officer corps and exposed a massive overbilling scheme run by an Asian defense contractor in exchange for prostitutes and other kickbacks.

Among those arrested on corruption charges are a senior agent for the Naval Criminal Investigative Service (NCIS) and a navy commander who escaped Cambodia's "killing fields" as a child only to make a triumphant return to the country decades later as the skipper of a U.S. destroyer. The investigation has also ensnared a navy captain who was relieved of his ship's command this month in Japan.

The chief executive and another company official of Singapore-based defense contractor Glenn Defense Marine Asia were arrested last month at a San Diego harbor-side hotel after federal investigators lured them to the United States by arranging a sham meeting with navy officials, according to court records and people involved in the case.