The defence contractor, whose real name is Leonard Glenn Francis, was earlier spotted in Venezuela by two investigative journalists after fleeing the United States earlier this month.
He was later captured by authorities in Venezuela.
Now after a week, he has applied for asylum in the South American country, a law enforcement official has said, according to The Associated Press.
The official, who spoke on condition of anonymity because he was not permitted to speak to the press about the closed proceedings, did not provide any additional details about the Malaysian businessman’s moves, the news agency reported.
However, the Venezuelan government will be considering the asylum request, according to the law.
Francis slipped away from his house arrest in San Diego on 4 September, weeks before he was set to be sentenced.
He owned Singapore-based Glenn Defense Marine Asia Ltd or GDMA, which supplied food, water and fuel to vessels for decades.
He has acknowledged overbilling the US Navy by $35m with the help of dozens of US officials whom he plied with prostitutes, Kobe beef, cigars, and other bribes so they would direct their ships to ports Francis controlled in the Pacific in Southeast Asia.
He pleaded guilty in 2015 and began cooperating with the authorities, in return for which he received home confinement and medical care. However, the fugitive faces up to 25 years in prison with a jury set to decide his verdict at a later date.
US and Venezuelan officials said that Francis cut off his ankle monitor, fled to Mexico and then made his way to Cuba before turning up in Venezuela. He was reportedly trying to fly to Russia.
While Venezuela and the United States have an extradition agreement, the Biden administration doesn’t officially recognise president Nicolas Maduro’s socialist government.
The US has no embassy in Venezuela and has imposed crushing sanctions on the country that have further embittered relations.
It’s not clear yet whether the US would apply for extradition, for which it only has 30 days.
Additional reporting by agencies