Forgive my ignorance here, but this actually made me curious. At this point, he's been given $30k almost entirely out of good faith. What legal trouble - if any - would be be in if he gave them the key, and when they decrypted it they found hours and hours of porn or some other junk? As though he wasn't interested in giving them documents, but rather bilking some foreign country out of cash.
And probably a bunch of extra violations around military or clearance holder rules, depending on what specifically applies to him. Presumably doing things that make you an extortion target for a foreign power is not well-regarded for such personnel.
And there's always tax fraud.
> Income from illegal activities, such as money from dealing illegal drugs, must be included in your income on Schedule 1 (Form 1040), line 8, or on Schedule C (Form 1040) if from your self-employment activity.
You're theoretically safe from them disclosing this to other law enforcement agencies. (I wouldn't want to test that, though.)
> If you tell the IRS you made $1 million from stealing money or dealing drugs, does the agency tip off the cops?
> Legally, it can't, unless a law-enforcement agency gets a court order granting it access to a specific taxpayer's return. The IRS isn't supposed to proactively alert other agencies about misdeeds unless terrorism is involved. In that case, it still needs a court order to disclose anything, but the IRS can initiate the legal process on its own.
See my comment about the Chicago Outfit in this thread. They figured out the best way if you have a lot of illegal income.
In theory. In actuality I think you could make a reasonable argument that the suspicion of parallel construction means that you may plead the 5th.
IRS is federal isn’t it? Does that mean they would consider weed sales illegal?
Weed is illegal under US law. Nothing meaningful about the federal prohibition on weed has changed for decades.
AFAICT all dispensaries are admitting federal crimes when they file federal tax returns. I believe the statute of limitations on controlled substances violations is 5 years, meaning dispensers are theoretically always under threat that the next administration will bring down the hammer and prosecute them for sales occurring today.
You are dreaming if you think a tax return which shows both illegal income and personal identifying information won't be shared with other enforcement agencies. Even the Post Office reports suspicious mail. Ditto FedEx and the "American kilo" (two pounds instead of 2.2). Even Amtrak alerts the DEA of suitcases containing legally-purchased California weed when the train will leave the State.
You report the amount as "other income", I believe. You don't have to say that it is from crimes.
I don't do crypto currency and have been wondering whether you are supposed to report it and pay tax on it when you receive it, or only when you sell it. Before you sell it, maybe it is an unrealized gain, which is currently not taxed.
1. You buy an artwork by a famous artist for $10k and it appreciates to $20k. This is an unrealized gain and you are not taxed until you sell it. Note that trading one crypto for another is effectively a sale of the first crypto and a purchase of the second, such that you pay gain depending on the value of the second crypto at the time of the trade.
2. Someone gives you a $10k artwork as partial payment for some work you do, eg web design. This is income and taxed as if they paid you $10k. Mining crypto is also income I believe.
3. Someone gifts you an artwork worth $10k. You don’t pay tax.
I would think the best way to characterize this transaction is that it is income, although it’s certainly unusual enough that I won’t say I’m certain.
Not tax advice / speak to your own accountant.
I had this problem in 2018 - I bought BTC in 2017 before the boom, exchanged a bunch for ETH at the peak of 2018, and then rode the ETH all the way back down. I had to pay a bunch of taxes on the BTC gains I “realised” even though I didn’t get any actual cash out. I had to pick a price settle for BTC/USD on the day I bought ETH.
He allegedly sent a package to a foreign government offering to sell them classified info, and the foreign government gave that package to the FBI.
EDIT: Also the initial package contained classified info, which doesn't help.
If you wanted to sue me foe fraud, you would be admitting to hiring an assasin
A random person saying they'll assassinate the president probably won't be a serious threat, but if you have military clearance, access to secrets, show intent to trade those secrets, and initiate communications with foreign powers then that's more than enough to prosecute. Saying you were "just joking" to scam some money isn't much of a defense.
I believe that generally folks don’t do this type of thing often because the type of person that would pay you $50k in this situation might also be very prone to just murder you if they thought you were playing with them hah
Either way, no fun for anyone.
(A drug conspiracy requires no "act in furtherance.")
So if you are "just joking" with your team and one of them takes your joke seriously and purchases bank robbery supplies or puts an SD card into a sandwich you are liable.
I think the most solid proof thats its not a geuine conspiracy would be
A) if you lied to the person giving you the money, about owning a gun or something else relevant, showing your intentions weren't genuine
B) showing the conspiracy is not credible, i.e. you are conspiring ro use a sniper rifle but you don't k ow how to shoot.
Also conspiracy doesn't require you to be proficient at executing your plan but rather the intention and motivation and opportunity to do so. You can still shoot a gun and cause harm even if you don't know how to shoot, and there's no way to really prove you don't either.
Expressing a credible threat of violence is a crime in most countries, I believe.
'Credible' is a key word though, a random joe who doesn't own a gun is not credible to assasinate a President.
There is a specific law for exactly that, however, making threats against the president. And those threats do not actually have to be communicated to the president in order for them to be illegal.
That said, on the other hand, if someone wants repeat business they will do what you pay them for. It's why ransomware works - if a ransomware guy doesn't unlock things after being paid, nobody will pay ransomware guys.
TL;DR like most business, it's based on trust.
Anyway, anyone want to buy some secret documents? Just send me 50K worth of bitcoin, you can trust me.
That said, if e.g. only the US had nukes after WW2, they would be the world's dictator. I mean they already are very influential everywhere, but they don't have absolute power at least. Still wouldn't want to be at war with them though.
The other side of the coin was the Rosenbergs were blamed for casualties in the Korean war.
"In her 2020 book, Atomic Spy: The Dark Lives of Klaus Fuchs, Nancy Thorndike Greenspan concluded that "Fuchs sought 'the betterment of mankind' [when sharing secrets with the Soviets] ... because "his goal became to balance world power and to prevent nuclear blackmail" according to a New York Times review by the conservative historian Ronald Radosh. Radosh wrote that "this was a post facto justification. The reason Fuchs spied was simply that he was a Communist and a true believer in Stalin and the Soviet Union"."
Two people have access to (what they believe to be) state secrets and try to sell them to a foreign government, but are unknowingly dealing with a US agent the whole time
I'm sure he wouldn't have a security clearance ever again.
But there are two questions: how did the FBI find out about it? Was Toebbe targeted by an informant?
Secondly, which country was he offering the secrets to? This makes a big difference. "Enemy" or ally? Maybe he felt sorry for the way France was effed over by AUKUS and wanted to make amends.
Prediction: he'll take a plea. In mitigation, France is an ally. Aggravation: these are nuclear secrets. France will not come to his aid, as Israel did for Pollard for many years, unsuccessfully. Fortunately, there was no real harm. 20 years unless he gets a particularly harsh judge. Worst case: 40.
Even if France didn't care about the information being shared elsewhere, they would still likely care about potentially breaching the classified information treaty they signed with the USA back in 1977. When France received the information, they may have assumed it was a test from the USA to see if France was still upholding their treaty obligations to report unauthorised distribution of US classified information?
Makes a big difference to what, are you suggesting?
In the law? How does Russia vs France make a difference? we have declared war against neither. Sharing national security secrets with either is a crime in fact.
How it looks in the news and to the social media mob? Sure.
This sounds increasingly like a Coen brothers movie though, yeah.
Something I've always wondered is, why are they all special agents? Is there some place they put all the ordinary agents? Are they the ones that just spend their whole careers in cubicles?
Because that's the job title?
> Is there some place they put all the ordinary agents?
Training. That is, the lowest rank on the FBI agent career path is apparently “New Agent Trainee” and the next step up is “Special Agent”.
they could get them on tax evasion, though, assuming they didn't report their ill-gotten gains (which you can do without incriminating yourself, amazingly.)
Under the Analog Act, fake drugs are considered as illegal as what they're represented to be (even if it's just baby powder.) I assume CA's law is the state counterpart of that Federal statute.
Though maybe not for $30,000, so if anything this article is more of an advertisement than a warning to others, isn’t it? Though often these kind of information spreads are more about public agencies showing the politicians that they aren’t a waste of money. Because what if that hadn’t been a honey pot, but ISIS or whatever!!! Best keep spending those surveillance billions.
Even if he 'knows' it's an undercover US department.
So, they would and should still throw the book at him.
He'd be secretly dealing in 'data', fake or not, and money related to his classified job. Not hard to see that's very illegal. He would be leaking info as well just talking to them. They might collate speech structure that links him to other non classified/leaked projects. Or know where he lives or work hours.
Has to, or get fired, and probably never have a security clearance again. But is it a criminal matter? No idea. (This hypothetical is probably not the most important part of this story, obviously, but it does seem to have captured our interest)
Conspiracy requires intent, which has to be proven beyond reasonable doubt. Good luck convincing a jury that cleaner had intent to sell gov. secrets, and it wasnt a joke.
Fraud, entering into a contract without intent to fullfill it? I don't think it works if the obligations would be illegal
A couple years after I left school, he was arrested for stealing hundreds of thousands of dollars in various microscopes and other lab equipment and selling it all online. It was so bizarre seeing his mugshot on the front page of the local paper.
EDIT: The other thing to watch out for is an FBI sting where they convince a guy to do something he would never have otherwise done. It seems like every publicly touted victory from them ends up that way once the truth comes out.
The Liberty City 7
Michigan Militia Assassination
und und und
But otherwise you are correct, more than one of these sensational cases were hatched by commission-earning FBI informants: the Liberty City 7 (a few acquitted and the others out now), the mentally ill 17-year old who was convinced to blow up a saloon near Wrigley Field (A.Daoud); the Michigan militia plan to kill the governor of that State, many many others.
If someone in 2021 is asking you to transfer secret information in an SD card, run. They are either a scammer or a cop. The only reason to do something like this is to get physical evidence, photographs documenting you handing over the information. Physical dead drops of encrypted information isn't a thing anymore. Real spies use dropbox, tor, rapidshare, or a thousand other ways to securely move digital files without physically meeting.
Encrypt it into a truecrypt container. AES-blowfish plus whatever other layers you think you need. Toss in some random junk to pad the size. Then rar-encrypt it again, splitting it into a couple 200mb volumes. Label it as some sort of porn and upload it to a filesharing service via Tor. If this is real spy stuff information then the recipient won't care about jumping through a few hoops to download the material. If it is the police then they will balk at the effort because it will be complicated to explain these steps court. The police will insist on an SD card in a sandwich.
It's also not so long ago when both China ('10-'12) and Iran ('19) nabbed entire spy rings operating in their countries wholesale because the supposedly secure channel established by the CIA was obviously and blatantly phoning home.
Old school spycraft still has its place. I think the real lesson is that being a spy probably isn't worth it because the odds are that your handlers are shit, don't care about the risk they expose you to and will get you killed.
They don't. The Russian agent places no value on the money. If it doesn't result in any useful information then it is a minor business loss. The American agent has accepted money from the Russian. He is already on the hook for espionage charges. He only continues the relationship to keep the Russian happy, to keep the money coming but also to keep the Russian from informing the FBI. The business deal becomes a continuing blackmail operation. Nobody trusts anyone.
Historically, the USSR was really cheap about paying spies in the US. Maybe the GRU is paying better.
My favorite detail: the first SD card the guy delivered, he hid in half a peanut butter sandwich.
The school has a long history of these issues. It is rotten to the core.
He (and his wife) will be old and grey, before they’ll be able to walk more than 100 yards, in a straight line.
Sub secrets are the most sensitive secrets we have (probably on par with the names of highly-placed assets). There will be no leniency.
The foreign country probably knew they’d be up shit’s creek, if they got caught.
Source? I can't imagine what kind of secrets an opponent could want about a sub. I can see how operational data about the disposition of the fleet is useful, but the subs themselves? Subs have a ball of Pu powering a steam turbine that runs propulsion and onboard electronics. Some of them have strategic missiles for killing cities, some of them have torpedoes for killing ships and other subs.
Not asking for any secret data, obviously. Just wondering what kind of secret data is even useful to an adversary.
how to build a nuclear reactor is relatively well-known. but, how do you make a silent nuclear reactor? that's really only useful for a submarine. it wouldn't surprise me if existing commercial reactor designs would need to be completely redesigned for submarine use.
for an example of how much research goes into making subs silent, there is a very deep lake in Idaho the US Navy has used for acoustic testing since World War 2 
the navy also has almost 70 years  of operational experience with nuclear reactors on subs. I imagine there's a enormous pile of "minor" things they've figured out as they chase down every last source of uncontrolled noise on the boat.
Honestly Australia doesn't need nuclear sub. The only things they can do that diesel-electric sub couldn't is offensive missions in water further for the Australian costs. That might be useful if Australia decides to go fight in an hypothetical war against China but that would mostly serve the interest of the USA.
Diesel-electric was probably a better choice because Australia would have been able to service them. As is, they will be bound to the USA.
why do you think nuclear subs have to be moving to cool the reactor?
It's like asking why rocket engines are under ITAR. Rockets are just ICBMs without a warhead.
Knowing a technologies capabilities means you can focus on defeating the exact specs of the tech.
For example, F-22s purposely fly around with pods that deteriorate its stealth capabilities so nobody, not even allies, knows exactly how a F-22 looks like on radar/can study it closely.
An example of how seriously the US takes this kind of thing look back to history. After Walker leaked secrets the US started getting even more protective of its submarine programs. The combination of power, propulsion, stealth, and attack capabilities make them the pinnacle of deployable mobile power. A carrier group can start a war, a single submarine can finish one with 24x12 100kt warheads.
The density of sensitive information relating to submarines is very very high.
AIUI the mostly tightly held secrets are around the acoustics - acoustic signature, propeller design, that sort of thing. A sub relies on being hidden to carry out its mission, so anything that helps an opponent to find your subs has to be well guarded.
Naval reactors are basically a miniaturised version of a power station reactor. Some of the latest HEU ones are designed for the fuel to last for the life of the boat.
two security-related things that stuck with me were:
a) there is a door that leads to the reactor compartment, and that entire section of the ship is off-limits to him. he had a thorough background check before going, and someone from the Navy reviewed all his footage before he could publish it. but despite all that, he's not allowed to even be in the part of the ship where the reactor is. excellent defense-in-depth (pun not intended).
b) when discussing sonar, the XO was sitting right there along with the sonarman, to make sure nothing classified was recorded. there were a few times where the XO said "nope nope nope, can't talk about that". the most interesting one to me was, IIRC, a question about the active sonar system being relatively high frequency sound, and if they used any lower frequencies...they cut immediately after that.
If a nation knows too much about the subs of the other nation, then it's quite possible that they may consider a first strike.
It's a horrible thought, but people can be really barking mad.
The Virginia-class sub is a fast attack sub; not a boomer, but the tech used between them is very similar.
I'm actually surprised that people don't know why subs are such a big deal, but I guess shouldn't be. The Cold War was really bad (my father was in the CIA). People, these days, may not know what it was like. I grew up in the Cold War. the current couple of generations have had the luxury of not growing up in that, but we may be bringing the band back together for a reunion tour.
Blind Mans Bluff is as good a place to start as any I guess.
India is a stretch. Having routinely dealt with Indian companies, there would be endless negotiations and squabbling over money. Endless.
The first contact was in april 2020.
It's either Russia or China.
During and before World War II, the U.S. had a category of classified information called Restricted, which was below confidential. The U.S. no longer has a Restricted classification, but many other nations and NATO do. The U.S. treats Restricted information it receives from other governments as Confidential. The U.S. does use the term restricted data in a completely different way to refer to nuclear secrets, as described above.
Since military tech is a cat and mouse game, having access to stealth tech could put you ahead of your competitors in the arms race, until they design another level of protection that makes current tech obsolete.
Not an expert, but that's what comes to mind.
I don't know either. And if Russians wanted it, they wouldn't have had an interest in a wayward scientist — that would be just too American style.
Rather, I'd say they would've gone after a person who could've given it to them on a golden platter, rather than having to read through somebody amateurish spy scoop compilation. That would be more Russian.
They had few spooks, but they spared no expense, and went to any lengths in getting somebody high rank like Ames, or Hansen.
"On or about December 20, 2020, the FBI’s attaché (“LEGAT”) in COUNTRY1 obtained a package representatives from COUNTRY1 had received in April 2020 through a mail carrier from the U.S. by an unidentified subject in an attempt to establish a covert relationship."
John Walker gave sub secrets to Russia, and didn’t get a treason charge (but he may have turned state’s evidence to reduce his charge). He did die “mysteriously,” a year before he was eligible for parole. He was about as bad as you can get.
> Treason against the United States, shall consist only in levying war against them, or in adhering to their enemies, giving them aid and comfort. No person shall be convicted of treason unless on the testimony of two witnesses to the same overt act, or on confession in open court.
Clearly and narrowly defining it in the constitution was a step to stop the clear abuses they had witnessed.
Look around even in this thread with everyone talking Treason.
I mean why not call it terrorism? Because terrorism is a blanket term that puts people outside of the normal legal system - e.g. 'outlaws' - and has them taken off to inhumane internment camps like Guantanamo Bay, where rule of law or the Geneva convention no longer apply. Apparently.
One day the US will / should be tried for war crimes, but since they have nukes and veto rights in the UN that's unlikely to happen. They've already indicated they would not hesitate to deploy troops to The Hague to extract any of their (former) leaders if they end up there.
> Treason is the crime of attacking a state authority to which one owes allegiance. This typically includes acts such as participating in a war against one's native country, attempting to overthrow its government, spying on its military, its diplomats, or its secret services for a hostile and foreign power, or attempting to kill its head of state. A person who commits treason is known in law as a traitor.
I think the problem is that it needs to involve an enemy of the USA to be treason. Enemy as in declared enemy, not just hostile to.
Query whether such would be the case today.
I'm still reading, but it looks like the key point in gaining Toebbe's trust to do a physical dead drop was the FBI dropping some physical signal in a nation's embassy or other location associated with them:
>During the weekend of May 29-30, 2021, the FBI conducted an operation in the Washington, D.C. area that involved placing a signal at a location associated with COUNTRY 1 in an attempted effort to gain bona fides with “ALICE.”
This makes me wonder if, as some are speculating, COUNTRY 1 is some US ally. Maybe the US had some cooperation in the investigation. It also makes me wonder who they haven't caught, if anyone. Nuclear proliferation is a scary idea....
Specifically, Russia and China are not likely to turn over the agent. We know from the correspondence that the suspects mentioned a poor translation, so you can surmise that it is not an English speaking country. We know that COUNTRY 1 has an Embassy in the US and a legal attache, so that rules out Iran or North Korea.
I don't think it even has to be an ally to get cooperation, I'm sure even Russia or China would be happy to cooperate on apprehending an amateur spy. They have their own spies to worry about.
What an incredibly risky and stupid move. I am so interested in the circumstances around this. Why did an (apparently) intelligent person do something so incredibly stupid?
I suspect more information about the motives in this case will come to light, but two explanations come to mind: 1) People who are incredibly intelligent in one domain, are often not particularly intelligent in another. Especially with a highly specialized discipline like engineering, if you spend a lot of time developing your abilities in one area, it often comes at the expense of other areas. 2) People often make entirely rational decisions according to their circumstances, that may appear irrational to someone who can't see the whole picture. Perhaps there was some kind of duress or other factor that caused them to take a risk that seems stupid without being able to see the whole picture.
It must be more exotic like Turkey or Iran no? And even then...
And I cant find a cause we d incarnate for an american traitor: their either want a lot of money, which we wouldnt provide when we already have nuclear subs and a mature military research industry, are very communists which we're not or very far right lunatics which we're not.
I think Israel is more likely (underdog in a sea of sharks for some), Iran (unfairly treated), Russia/China (will show those libtards) or an oil giant in the middle east (money) or maybe some south american thing.
I mean the guy is an idiot but France, I wouldnt betray any other country for it and Im French... what we dont do ourselves we dont deserve.
Nuclear subs don't make sense over diesel+AIP in the Med or the Persian Gulf or Red Sea - these seas are too narrow or too shallow, so nuke subs would be detected much sooner, cost much more, and be far larger.
Having longer trips does not cover all these drawbacks for countries that must base in these areas. Nuclear subs are for blue-water navies, not green-water navies.
Iran/Russia/China are out for reasons pointed out elsewhere in the comments. UK wouldn't need translation (though the idea of 'translating' a spynote into Chav is IMHO incredibly amusing). South American governments obviously don't have money for this.
That leaves us with France or - more exotically - Spain/South Korea/Japan. The latter three don't have nuclear subs, but wouldn't be entirely mad to consider them. However, if the recipient has an existing industry, France is the only remaining logical contender.
Perhaps he misread the situation and imagined France would be receptive given that fact.
If it was France, maybe he selected a an ally which isn't an adversary to the US but has been critical of the USA (in particular of the former administration)
All that excitement that he felt over the years every time he extracted a few pages or pictures of secret documents thinking one day he will have enough. All the preparation for the exchange and the text that he left in all the drops makes me believe that he did this for the adrenaline and money. Also if the speculations are true and the COUTNRY 1 is France I think in his mind he thought that he was not doing harm to USA by selling it to Russia or China and also gets to play spy and get away with some money. I wish I can see his face when he gets arrested.
100k for an op isn't really that much. especially when it comes to subjects like this.
now, I'm not saying it was worth it... I dont have all the details.
it was too reasonable :-P
You can't think small with these things, if he had real ambition and vision, he could be running Goldman Sacks!
That is a bit interesting for scenarios like this, the gov may not be able to reclaim even the unspent crypto; well it's not that different from burying cash somewhere and not divulging after being caught.
If you're ordered to turn the money over by the courts, they can hold you as long as you remain in contempt of court.
Rubber-hose decryption in general has a pretty solid track record.
Especially with the nature of civil asset forfeiture, in which many people never recover their money or property even after proving their innocence, unseizable property has it's appeal.
The difference between theory and practice is that in theory, there isn't one. In practice, there is.
True, however, a trial may reveal methods* and create political embarrassment. A severe plea deal is therefore a possibility.
* It's quite possible this news story did not contain the entire truth. For example, it's not out of the realm of possibility the FBI knew before COUNTRY1 turned him in.
He was an amateur spy who was caught using good old police techniques. Whether they knew before shouldn't matter.
COUNTRY1 turned everything over and assisted the FBI in their investigation (signaling the suspect). I'm certain they'll send someone to testify in court if needed.
But it does matter. The prosecution isn't just to get a conviction and enforce the law, it's intended to advance national security.
If embarrassing details come out and harm it, the prosecutors would rather not have a trial.
It's quite possible to imagine various embarrassing details that might come out and are compatible with the story as reported - from possible spying on COUNTRY1's embassy, to how exactly did this engineer smuggle these secret documents to his house.
or the justice dept can accept the plea deal so they can quickly move to other cases.