National Security Crimes Blog

U.S. Coast Guard Officer Pleads Guilty to False Statements Charge

2008-05-05T09:10:00.002-05:00

A Chief Warrant Officer in the U.S. Coast Guard has pleaded guilty in U.S. District Court in Hawaii to one count of making a false statement, according to Ronald J. Tenpas, Assistant Attorney General for the Justice Department’s Environment & Natural Resources Division and Edward H. Kubo Jr., U.S. Attorney for the District of Hawaii.^[1]

David G. Williams was indicted by a federal grand jury on Aug. 8, 2007, on charges that he lied to investigators regarding his knowledge of the discharge of bilge wastes through the ship’s deep sink into the Honolulu Harbor.[2] In his role as Main Propulsion Assistant, Williams directed the maintenance of the main diesel engines and other machinery in the engine room for the Coast Guard Cutter RUSH, a high endurance cutter stationed in Honolulu.^[3]

Assistant Attorney General Tenpas stated that, “Today’s guilty plea stands as notice that the Department of Justice will enforce the nation's environmental laws in an even-handed and thorough manner.”^[4]

The plea agreement states that, on or about March 8, 2006, Williams became aware of the direct discharge of bilge wastes into Honolulu Harbor and that the Engineering Department personnel staged an unusual and irregular operation and configuration of engine room equipment to pump bilge wastes from the aft bilge to the deep sink and overboard into Honolulu Harbor.^[5] This process bypassed the “oily water separator” (OWS) system which acts as a pollution prevention control device managing accumulations of bilge wastes while underway at sea. The OWS system processes wastes to separate the water from the oil and other wastes.^[6]

The plea agreement went on to state that, on or about March 13, 2006, the State of Hawaii Department of Health received an anonymous complaint stating that the crew of the U.S. Coast Guard Cutter RUSH were ordered to pump approximately 2,000 gallons of bilge waste into Honolulu Harbor.^[7] Investigators from the U.S. Coast Guard Investigative Service (CGIS) also received confirmation from Main Propulsion Division personnel who personally participated in the discharge that bilge wastes had indeed been released through the deep sink and into Honolulu Harbor.^[8] CGIS investigators garnered various documents from the RUSH, including engineering and ship’s logs, tank level sounding sheets, and a pneumatic pump.^[9]

During his interview with investigators from the CGIS, Williams denied knowledge of personnel discharging bilge waste to the deep sink and continued by stating that he was unaware of the pumping of bilge wastes to bypass the ship’s OWS system.^[10]

Sentencing has been set for Aug. 19, 2008. Williams faces a statutory maximum of 5 years in prison and a fine of up to $250,000, plus a term of supervised release of up to 3 years.^[11]

Under 18 U.S.C. § 1001 it is a crime for a person, in any matter within the jurisdiction of the executive branch, to make a materially false statement or representation.^[12] The punishment for violating section 1001 is a fine, imprisonment for up to five years, or both.^[13]

Federal criminal defense attorney, Douglas McNabb, has written extensively on the crime of false statements. Some of his work on the subject may be found here.

[1] Press Release, United States Department of Justice, U.S. Coast Guard Officer Pleads Guilty for Lying about Vessel Pollution, May 1, 2008 (available at http://www.usdoj.gov/opa/pr/2008/May/08_enrd_370.html).
[2] Id.
[3] Id.
[4] Id.
[5] Id.
[6] Id.
[7] Id.
[8] Id.
[9] Id.
[10] Id.
[11] Id.
[12] 18 U.S.C. § 1001(a)(2).
[13] Id. at § 1001(a).

Canadian Night Vision Goggle Manufacturers Accused in Conspiracy to Defraud U.S. Military

2008-04-21T19:58:00.003-05:00

A federal grand jury in San Francisco has indicted a Canadian night vision goggles manufacturing firm and two of its executives for in an alleged scheme to defraud the U.S. military in the supply of equipment for the Iraqi army, according to Department of Justice officials.^[1]

The indictment, returned on Dec. 4, 2007, charges Michael Beker, also known as Mendel Beker, President and Chief Executive of Newcon Optik Ltd., Arie Prilik, the former senior Vice President of Newcon Optik, and the company itself with two counts each of wire fraud and one count each of conspiracy to commit wire fraud.^[2] In addition, Beker and Newcon Optik were also each charged with one count of money laundering. Both Beker and Prilik have been arrested by the York Regional Police in Toronto, Canada.^[3]

Beker, Prilik and Newcon Optik Ltd. are accused of attempting to defraud the U.S. Army’s Tank-Automotive and Armaments Command (TACOM), a military unit tasked with equipping and training the Iraqi Army. The alleged scheme could have resulted in the U.S. military being overcharged approximately $11 million.^[4]

The indictment accuses Beker, Prilik and Newcon Optik of agreeing to pay a competitor to withdraw from supplying TACOM with night vision goggles so that they could step in and supply TACOM with night vision goggles at a higher price.^[5] Beker, Prilik and Newcon Optik are alleged to have made an initial payment of $50,000 to a competitor as the first step in the scheme.^[6]

18 U.S.C. § 371 covers the crime of conspiracy. Under that section, if two or more persons conspire either to commit any offense against the United States, or to defraud the United States, or any agency thereof in any manner or for any purpose, and one or more of such persons do any act to effect the object of the conspiracy, each shall be fined under this title or imprisoned not more than five years, or both.^[7] If, however, the offense, the commission of which is the object of the conspiracy, is a misdemeanor only, the punishment for such conspiracy shall not exceed the maximum punishment provided for such misdemeanor.^[8]

Beker and Prilik each face up to 20 years in prison for the wire fraud counts, and up to five years in prison and a $250,000 fine each if convicted on the conspiracy count.^[9] Beker faces imprisonment for up to 20 years and a fine of up to $500,000 if convicted of the money laundering charge.^[10] The United States also plans, upon the conviction of Beker, Prilik and Newcon Optik, to seek criminal forfeiture of the $50,000 payment made in the case.^[11]

Federal criminal defense attorney Douglas McNabb has previously written about the crime of conspiracy, here.

[1] Press Release, United States Department of Justice, Canadian Night Vision Goggles Manufacturer and Two Executives Charged in Scheme to Defraud U.S. Military Procurement Unit for Iraq (April 21, 2008) (available at http://www.usdoj.gov/opa/pr/2008/April/08_at_320.html).
[2] Id.
[3] Id.
[4] Id.
[5] Id.
[6] Id.
[7] 18 U.S.C. § 371.
[8] Id.
[9] Press Release, United States Department of Justice, Canadian Night Vision Goggles Manufacturer and Two Executives Charged in Scheme to Defraud U.S. Military Procurement Unit for Iraq (April 21, 2008) (available at http://www.usdoj.gov/opa/pr/2008/April/08_at_320.html).
[10] Id.
[11] Id.

Physicist Pleads Guilty to Conspiracy to Export Defense Information

2008-04-15T22:15:00.002-05:00

On April 15, 2008, federal authorities announced that Daniel Max Sherman pled guilty to conspiracy to violate the Arms Export Control Act (22 U.S.C. Section 2778), in violation of Title 18, United States Code, Section 371.^[1] Sherman, a former resident of Knoxville, now lives in Littleton, Colorado. He is a physicist who formerly worked at Atmospheric Glow Technologies, Incorporated, a technology company based out of Knoxville.^[2]

According to the plea agreement, Sherman, J. Reece Roth, served as a Professor Emeritus at The University of Tennessee, and work at Atmospheric Glow Technologies, Inc., between January 2004 and May 2006.^[3] During this time he engaged in a conspiracy to pass on export controlled technical data to a foreign national from China. This information pertained to a restricted United States Air Force contract to develop plasma actuators for a munitions-type Unmanned Aerial Vehicle (UAV), or “drones.” The Chinese national was a graduate level research assistant at the University of Tennessee.^[4]

United States Attorney James R. Dedrick has noted that the violations charged here carry a maximum possible penalty of five years imprisonment and a $250,000.00 fine.^[5] According to Dedrick, “A top priority of the Department of Justice and this District is protect our national security and to protect our technology from disclosure to foreign governments.”^[6]

Patrick Rowan, Acting Assistant Attorney General for National Security added that, “knowingly disclosing restricted U.S. military data to foreign nationals represents a very real threat to our national security, particularly when we know that foreign governments are actively seeking this information for their military development.”^[7]

The investigation that led to the arrests in this case was conducted jointly by the Federal Bureau of Investigation, U.S. Immigration and Customs Enforcement, U.S. Air Force Office of Special Investigations, and the Department of Commerce Office of Export Enforcement.^[8]

Normally, consipracy to export defense articles is punishable under section 127.1 of the International Trafficking of Arms Regulations codified at 22 U.S.C. § 2778. Under this section it is unlawful for anyone to conspire to export, import, reexport or cause to be exported, imported or reexported, any defense article or to furnish any defense service for which a license or written approval is required by this subchapter without first obtaining the required license or written approval from the Office of Defense Trade Controls.^[9] Violation of this section is punishable by a fine for each violation not more than $1,000,000 or imprisonment not more than ten years, or both.^[10]

However, here Sherman was charged with violation of 18 U.S.C. § 371. Under 18 U.S.C. § 371, it is a crime for a person to conspire with at least one other person to commit an offense against the United States, and then do an overt act in furtherance of that conspiracy. The punishment for a violation of section 371 is a fine, imprisonment for up to 5 years, or both.^[11]

Federal criminal defense attorney, Douglas McNabb has written extensively on the subject of conspiracy. His work in that area can be seen here.

[1] Press Release, United States Department of Justice, Physicist Pleads Guilty to Conspiracy to Violate the Arms Export Control Act (April 15, 2008) (available at http://www.usdoj.gov/opa/pr/2008/April/08_nsd_299.html).
[2] Id.
[3] Id.
[4] Id.
[5] Id.
[6] Id.
[7] Id.
[8] Id.
[9] 22 C.F.R. §127.1.
[10] 22 U.S.C. § 2778(c).
[11] 18 U.S.C. § 371.

Civilian Contractor Alleged to Have Assaulted Coworker to be Tried Under UCMJ

2008-04-07T21:37:00.002-05:00

It has been revealed that a civilian contractor accompanying the Multinational Corps Iraq has been charged with aggravated assault under military law.^[1]

The contractor, Alaa Alex Mohammad Ali, was an interpreter and is the first contractor to be charged under a 2006 amendment to the Uniform Code of Military Justice (UCMJ) - Section 552 of the National Defense Authorization Act of Fiscal Year 2007, according to MNC-I officials.^[2]

Ali is a dual citizen of both Canada and Iraq. He is alleged to have stabbed another contractor. Officials maintain that he is presumed to be innocent until, and unless, he is proven guilty. He is currently in confinement at Camp Victory, Iraq, where he has been since Feb. 29.^[3]

A pre-trial hearing has been scheduled for April 10. The hearing will be held according to Article 32 of the Uniform Military Code of Justice and is conducted like a civilian preliminary hearing and similar to a grand jury.^[4]

Over the course of the proceedings, a senior Army officer will listen to evidence and make findings and recommendations about the charge.^[5] The resulting report will be forwarded to the commanding general of Multinational Corps Iraq, Lt. Gen. Lloyd J. Austin III.^[6]

Ali will be entitled to all the same rights, protections and privileges service members receive in military court. Those rights include the right to counsel, the right to speedy trial, protection against self- incrimination, and presumption of innocence.^[7]

Ali moved to Canada from Iraq following the Persian Gulf War during Saddam Hussein’s crack down on Shiites. He was living there with his wife and three children until, hoping to assist in the rebuilding of his home country, he returned as a contractor.^[8]

The aforementioned amendment to the UCMJ amended 10 U.S.C. 802(a)(10) to include those persons serving with or accompanying an armed force in the field during the time of declared war or a contingency operation, as persons subject to the UCMJ.^[9] Therefore contracting personnel, such as Ali, are now subject to prosecution under the UCMJ.

Federal criminal defense attorney, Douglas McNabb has written extensively on legal issues arising in the area of national security law. Some of his work can be read here.

[1] Michael R. Gordon, U.S. Military Charges Contractor in Iraq, International Herald Tribune, April 5, 2008 (available at http://www.iht.com/articles/2008/04/05/africa/contractor.php?page=1).
[2] Id.
[3] Id.
[4] Id.
[5] Id.
[6] Id.
[7] Id.
[8] Id.
[9] 10 U.S.C. § 802(a)(10).

Bergersen Pleads Guilty to Conspiracy to Disclose Classified Information

2008-03-31T22:30:00.002-05:00

Gregg William Bergersen, of Alexandria, Virginia, has pleaded guilty to conspiring to disclose national defense information to persons not entitled to receive it, in violation of 18 U.S.C., Sections 793(d) and (g). Bergersen was arrested on February 11, 2008 on a criminal complaint charging this same offense.^[1]

The information Bergersen pleaded guilty to disclosing pertained to Taiwanese purchases of U.S. military equipment. This information was classified at the Secret level. Over the course of the conspiracy, Bergersen developed a friendship with Tai Kuo, a New Orleans businessman who is accused of passing that information on to the Chinese government.^[2] Authorities assert that Kou compensated Bergesen by bestowing upon him gifts, cash payments, dinners, and money for gambling during trips to Las Vegas.^[3]

Officials claim that some of the weapons information passed between Bergersen and Kuo related to Taiwan's new Po Sheng air defense system. Taiwanese military officials have admitted that the disclosures caused some damage to the program, but did not compromise key technology.^[4]

Bergersen has stated that he was unaware that Kuo was passing this information along to an official of the government of the People’s Republic of China. Bergersen had even gone as far as to warn Kuo that some of the information being disclosed was classified.^[5]

Espionage charges are still pending against Kuo and an alleged conspirator, Yu Xin Kang, both of whom remain held without bond.^[6]

The Chinese government contends that the accusations of espionage in this case are groundless and is accusing the U.S. of "Cold War thinking."^[7]

According to U.S.C. §793(g), if two or more persons conspire to violate any of the foregoing provisions of this section, and one or more of such persons do any act to effect the object of the conspiracy, each of the parties to such conspiracy shall be subject to the punishment provided for the offense which is the object of such conspiracy.^[8]

In this case 18 U.S.C. § 793(d) was the subsection which Bergersen conspired to violate. This subsection makes it is a crime for a person—who has lawful access to any document, writing, code book, signal book, sketch, photograph, photographic negative, blueprint, plan, map, model, instrument, appliance, or information relating to the national defense—to willfully communicate or transfer that information to any person not entitled to receive it, if he believes that the information could be used to the injury of the United States or to the advantage of any foreign nation. The punishment for doing so is a fine, imprisonment for up to 10 years, or both.^[9]

Federal criminal defense attorney, Douglas McNabb, has written extensively on the crime of Disclosure of Classified Information. Some of his work on the subject can be seen here.

[1] The Associated Press, Defense Department Analyst Pleads Guilty to Passing on Data to Chinese-Connected Business, FoxNews.com, March 31, 2008 (available at http://www.foxnews.com/story/0,2933,343969,00.html).
[2] Id.
[3] Id.
[4] Id.
[5] Id.
[6] Id.
[7] Id.
[8]18 U.S.C. §793(g).
[9]18 U.S.C. §793(d).

Mak Sentenced to 24 ½ Years for Conspiracy to Export Defense Articles

2008-03-24T20:23:00.002-05:00

A Chinese-born engineer was sentenced to 24 ½ years in federal prison recently after being convicted of conspiracy to export U.S. defense technology to China. In addition, Chi Mak, an engineer who worked on naval propulsion systems, was also found guilty of acting as an unregistered foreign agent, false statements to the FBI, and a number of other charges.^[1]

According to Mak, ''I don't know so much about the law, but I feel I never intend to violate any law at all. I never intend to hurt my country. I love this country. I don't believe I hurt this country. The truth is not like the one the prosecutor says. I still hope for justice.''^[2]

The court held that Mak had lied on immigration and government security clearance forms and committed perjury on the witness stand.^[3]

Ronald Kaye, Mak’s attorney, stated that they would file an appeal within 10 days. Furthermore, Kaye alleges that prosecutors were being overly harsh with his client in order to set an example for the international espionage community and China.^[4]

Mak, a former employee of naval defense contractor Power Paragon, was arrested in late 2005 when FBI agents stopped his brother and sister-in-law as they boarded a flight to China.^[5]

According to investigators three encrypted CDs were found in the couple's luggage. The CD’s contained documents on a submarine propulsion system, a solid-state power switch for ships and a PowerPoint presentation on the future of power electronics.^[6]

During Mak’s trial last year, his attorneys argued that the information was not classified and was often made public at industry conferences that were attended by engineers from all over the world, including China.^[7] In addition, they argued that the information that Mak was purported to be trying to pass to China was outdated and was not functional technology that could be of benefit to China.^[8]

Last year Mak's wife, Rebecca Laiwah Chiu, pleaded guilty to one count of acting as a foreign agent without registering with the U.S. government. She will be deported after serving three years in federal prison.^[9]

Mak’s brother, Tai Mak, pleaded guilty last year to conspiracy to violate export control laws and received a maximum sentence of 10 years in prison.^[10] His wife, Fuk Li, pleaded guilty to aiding and abetting the violation of export control laws and has been placed on probation for three years.^[11] Their son, Yui ''Billy'' Mak, also pleaded guilty to aiding and abetting the violation of export control laws and was sentenced to time already served. All three will also be deported.^[12]

Consipracy to export defense articles is punishable under section 127.1 of the International Trafficking of Arms Regulations. Under this section it is unlawful for anyone to conspire to export, import, reexport or cause to be exported, imported or reexported, any defense article or to furnish any defense service for which a license or written approval is required by this subchapter without first obtaining the required license or written approval from the Office of Defense Trade Controls.^[13] Violation of this section is punishable by a fine for each violation not more than $1,000,000 or imprisonment not more than ten years, or both.^[14]

An agent of a foreign government is defined as an individual who agrees to operate within the United States subject to the direction or control of a foreign government or official,^[15] and it is a crime for a person to act in the United States as an agent of a foreign government without prior notification to the Attorney General.^[16] Violating this law can be punished with a fine, imprisonment for up to 10 years, or both.^[17]

Making false statements is a federal crime covered by 18 U.S.C. § 1001(a)(2), which makes it a crime for a person, “in any matter within the jurisdiction of the executive” branch of the US government, to knowingly and willfully make any materially false, fictitious, or fraudulent statement or representation. The punishment for violating this section 1001(a) is a fine, imprisonment for up to 5 years, or both.

The culmination of convictions on all these charges led to Mak’s 24 ½ year sentence.

[1] The Associated Press, Chinese Born Engineer Convicted of Conspiracy Gets 24 ½ Years in Prison, FOXNews.com, March 24, 2008 (available at http://www.foxnews.com/story/0,2933,341029,00.html).
[2] Id.
[3] Id.
[4] Id.
[5] Id.
[6] Id.
[7] Id.
[8] Id.
[9] Id.
[10] Id.
[11] Id.
[12] Id.
[13] 22 C.F.R. §127.1.
[14] 22 U.S.C. § 2778(c).
[15]18 U.S.C. § 951(d).
[16] Id. at § 951(a).
[17] Id.

Former DoD Employee Sentenced for False Statements on Security Clearance Application

2008-03-20T22:17:00.002-05:00

A former Department of Defense employee has been sentenced to probation for lying about her contacts with a foreign government, according to federal authorities.^[1]

This past Tuesday, Beatrice C. Ruiz of Norwalk was sentenced to two years probation and a $250 fine by Judge Ellen Bree Burns. Ruiz pled guilty in New Haven federal court last year to one count of making a false statement.^[2]

Ruiz was formerly a Department of Defense engineer at Sikorsky Aircraft in Stratford. On her application for a top secret security clearance the 56-year-old denied having any contact with a foreign government.^[3]

However, authorities have stated that Ruiz had a social and business relationship for nearly ten years with an official of the Colombian consulate in New York.^[4]

Ruiz and the government agreed that her social and business activities were intended for her personal benefit. The evidence does not suggest that she misused classified information or harmed the security interests of the United States.^[5]

Making false statements is a federal crime covered by 18 U.S.C. § 1001(a)(2), which makes it a crime for a person, “in any matter within the jurisdiction of the executive” branch of the US government, to knowingly and willfully make any materially false, fictitious, or fraudulent statement or representation. The punishment for violating this section 1001(a) is a fine, imprisonment for up to 5 years, or both.^[6]

Applicants for security clearances are required to submit a Standard Form 86 (SF-86). The SF 86 seeks to information used primarily as the basis for investigation for access to classified information. Applicants must answer the questions posed on the SF 86 truthfully or be criminally liable under 18 U.S.C. § 1001.

Falsification of answers in a security clearance investigation, particularly on the SF 86, are a common occurrence. The Defense Office of Hearings and Appeals recognizes that making a false statement also implicates 18 U.S.C. § 1001. However, the fact that the Applicant was not charged with falsification under 18 U.S.C. § 1001 will not absolve him or her of imputed criminal conduct for the purpose of assessing clearance suitability.^[7]

Individuals who are denied a security clearance because of falsification of answers can attempt to mitigate their false statement and have an unfavorable decision overturned. In order to mitigate a previous false statement, the Applicant must come forward - before being confronted by the investigatory agent - and make a prompt, good faith disclosure of the truth.^[8] If an applicant does not step forward and the false statement is uncovered during the course an investigation then the likelihood of mitigating the false statement is substantially reduced.

Federal criminal defense attorney, Douglas McNabb, has written extensively on the crime of false statements. His work in that area can be seen here.

[1] The Associated Press, Former DoD Employee Gets Probation For Lying, The Associated Press, March 18, 2008 (available at www.nydailynews.com).
[2] Id.
[3] Id.
[4] Id.
[5] Id.
[6] 18 U.S.C. § 1001.
[7] Defense Office of Hearings and Appeals, ADP Case No. 94-0215.
[8] Defense Office of Hearings and Appeals, ADP Case No. 93-1390.

Recent Decisions by DOHA Judges and Appeal Board Clarify Security Clearance Appeals Process

2008-03-18T11:00:00.003-05:00

A number of recent decisions by the Defense Office of Hearings and Appeals (DOHA) have provided insight into the appeals procedures used in certain types of personnel security investigations.

DOHA is responsible for reviewing unfavorable decisions made in security clearance investigations and reinvestigations for military personnel, federal civilian employees and government contractors employed by a number of agencies.

Some of the decisions below were made by Administrative Judges, as well as a three judge Appeal Board which serves as a final appeals board reviewing DOHA decisions pertaining to government contractors. These cases mentioned below serve to illustrate that appeals from adverse security clearance decisions can, in some instances, result in the granting or continuance of a security clearance.

Many times when a clearance has been denied or revoked, a DOHA Administrative Judge will grant or reinstate the clearance if the individuals can show that they have mitigated the conduct that lead to the initial denial or revocation. This is true even in cases where illegal drug use was the cause for the denial or revocation.

In a 2008, an Administrative Judge granted a clearance to an Applicant who was originally denied a security clearance because he had used marijuana in high school and had also bought and sold that illegal drug.^[1] Furthermore, in 2004 the Applicant had tested positive for marijuana use at his job and in 2005 the applicant had been arrested for driving with possession of four ounces of marijuana and intent to distribute.^[2]

The Administrative Judge stated that the applicant had mitigated the security concern by abstaining from drug use for three years, changing his circle of friends, and by getting married and having two children.^[3] According to Judge, under paragraph 26(a) of the Adjudicative Guidelines, the disqualifying condition may be mitigated where the behavior happened so long ago, was so infrequent, or occurred under such circumstances that it is unlikely to recur and does not cast doubt on the individual’s current reliability, trustworthiness, or good judgment.^[4]

The Administrative Judge went on to state that an Applicant’s eligibility for a security clearance must be considered in light of the totality of the Applicant’s conduct and all the circumstances. This is referred to as the whole person standard.^[5]

While conduct may be deemed mitigated at a DOHA hearing before the Appeal Board, new evidence may not be considered on the appeal.^[6] A recent DOHA Appeal Board decision addressed this issue when an Applicant attempted to introduce new evidence to counter the fact that the Applicant still has delinquent debts. Moreover, the Board found that its submission does not constitute error on the part of the Administrative Judge.^[7]

Furthermore, cases that come before a DOHA Appeal Board are not reviewed de novo. If an applicant fails to make an allegation of harmful error then the decision of the Judge denying an Applicant a trustworthiness designation will be affirmed.^[8] This was the case in a hearing before an Appeal Board recently where an applicant was denied a trustworthiness designation based on concerns raised under Guideline G (Alcohol Consumption) and Guideline E (Personal Conduct).^[9]

As illustrated by the aforementioned cases clearances may be granted when the conduct serving as the basis for an initial denial or revocation has been mitigated. Thus, Applicants who have been denied or have had their clearances revoked in some cases may have recourse through DOHA. To determine whether recourse is available individuals should retain experienced counsel knowledgeable about the laws and procedures governing access to sensitive national security information.

[1] Defense Office of Hearings and Appeals, ISCR Case No. 07-09751.
[2] Id.
[3] Id.
[4] Id.
[5] Id.
[6] Defense Office of Hearings and Appeals, ADP Case No. 00-0131.
[7] Id.
[8] Defense Office of Hearings and Appeals, ADP Case No. 06-25938.
[9] Id.

Venezuelan National Pleads Guilty to Conspiracy Charges

2008-03-04T06:50:00.002-06:00

A Venezuelan agent, Carlos Kauffman, who along with four other foreign nationals is accused of acting and conspiring to act as an agent of the Bolivarian Republic of Venezuela (''Venezuela'') has plead guilty before a U.S. District Court Judge in Miami.^[1] Kaufmann plead guilty to charges that he conspired to act as a Venezuelan agent without first notifying the Attorney General of the United States. Sentencing has been scheduled for May 12, 2008, at 2:00 PM before U.S. District Court Judge Lenard.^[2]

Kauffman is the second defendant to plead guilty in this case. On Jan. 25, 2008, Moises Maionica, 36, pleaded guilty to acting and conspiring to act as an illegal agent of the Venezuelan government.^[3] The case against co-defendants Antonio Jose Canchica Gomez, Rodolfo Wanseele Paciello, and Franklin Duran is still pending. Their trial is currently scheduled for June 23, 2008.^[4]

Alexander Acosta, the United States Attorney for the Southern District of Florida, applauded the efforts of the Federal Bureau of Investigation for its work in this investigation.^[5] The case is being prosecuted by Assistant United States Attorney Thomas J. Mulvihill and Senior Trial Attorney Clifford I. Rones, of the Counterespionage Section at the Justice Department's National Security Division.^[6]

A conspiracy is "an agreement by two or more persons to commit an unlawful act, coupled with an intent to achieve the agreement's objective, and [often] action or conduct that furthers the agreement; a combination for an unlawful purpose."^[7] The United States Code criminalizes conspiracy by stating that:

“It is a violation of title 18, section 371 for "two or more persons" to conspire
to commit any offense against the United States, or
to defraud the United States, or any agency thereof in any manner or for any purpose, if one or more of such persons does any act to effect the object of the conspiracy.”^[8]

The maximum punishment for a conspiracy charge under § 371 is a fine, or imprisonment for not more than five years, or both.^[9] If the offense upon which the conspiracy is based upon is a misdemeanor, the punishment cannot exceed the maximum penalty for the underlying misdemeanor offense.^[10]

Federal criminal defense attorney Douglas McNabb has previously written about the crime of conspiracy, here.

[1] Bloomberg News, Businessman Pleads Guilty to Aiding Chavez, The New York Sun, March 4th, 2008 (available at www.nysun.com/article/72284).
[2] Id.
[3] Id.
[4] Id.
[5] Id.
[6] Id.
[7] Black’s Law Dictionary 329 (8th ed. 2005).
[8] 18 U.S.C. § 371 (2008).
[9] Id.
[10] Id.

Army Attempts to Fast Track Security Clearances in Fort Monmouth Closing

2008-02-20T07:58:00.002-06:00

As part of the closing of Fort Monmouth, the Army is attempting to cut down on the time it takes for newly hired post employees performing critical support for the continuing conflicts in Iraq and Afghanistan to gain the "top secret" security clearance required for their work.^[1]

However, the plan to put top secret security clearances on a fast track is drawing fire from some critics.^[2]

The normal 15-month security clearance process that the DOD is attempting to circumvent has been on the watch list of the Government Accountability Office for two years, which has criticized the program in several audits since 2005.^[3]

Fort Monmouth, which employs approximately 5,000 people and supports another 22,000 jobs, provides about $3.2 billion to New Jersey’s economy. Its closing is the result of the 2005 Base Realignment and Closure round, the nationwide effort by the Pentagon to restructure the military and save money.^[4]

The 2005 BRAC commission is requiring the Pentagon to report to Congress on its plan to shutter the post without disturbing the aid its employees provide to soldiers fighting in Iraq and Afghanistan.^[5] This must be done before the post can be closed.^[6]

The so-called caveat report was given to Congress at the end of December. Due to the Army's security clearance proposal, as well as other concerns, it was immediately blasted and a GAO audit was called for. The agency agreed, however a time line has not been set.^[7]

The report outlines the Army's plan to relocate the fort's mission to Aberdeen, Maryland and identifies possible challenges along the way and the strategies to overcome them.^[8] Among these problems is a shortage of workers willing to relocate. The Army believes that only about 30 percent of the current fort workers are willing to relocate to Aberdeen.^[9] This number corresponds with the results of internal surveys provided to post workers last year.^[10]

As such, the Army will face a shortage of scientists and engineers qualified to carry out the work needed to support the ongoing war on terrorism.^[11] According to the report, the Army thinks it can hire enough people to make up for this shortage and has requested the money and authority to hire more people in lieu of the closure.^[12]

According to the report, "virtually all (the fort's core mission) positions, including those supporting GWOT (Global War on Terrorism) and other contingency operations, require a Secret or Top Secret security clearance."^[13]

Those clearances necessitate an extensive, four-phase investigation into a potential hire’s background.^[14] This process averages 446 days — or roughly 15 months — to complete. Submission of the application only, the first phase in the process, takes an average of 111 days.^[15] However, the Government Accountability Office contends that even with that amount of time, the process is seriously flawed.^[16]

The regulations governing the Office of Personal Management (OPM), the office responsible for national security investigations, are located at 5 C.F.R. 732 and 736.^[17] Of particular interest is 5 C.F.R. 732 the applicability of which extends to “those positions that involve activities of the Government that are concerned with the protection of the nation from foreign aggression or espionage, including development of defense plans or policies, intelligence or counterintelligence activities, and related activities concerned with the preservation of the military strength of the United States.”^[18]

All investigations under this Part are conducted pursuant to OPM issuances.^[19] The due process rights afforded by this regulation are limited. 5 C.F.R. 732 provides that an agency making an adjudicative decision must retain records of any agency action, provide notice of the reasons for that decision, allow an opportunity for the applicant to respond, and offer that applicant notice of any appeal rights they might have.^[20] Once this occurs then the agency may make a final adjudicative decision.^[21]

[1] Keith Brown, Critics Cite Security Risk in Hiring Plan, Asbury Park Press, Jan. 14, 2008 (available at http://www.app.com).
[2] Id.
[3] Id.
[4] Id.
[5] Id.
[6] Id.
[7] Id.
[8] Id.
[9] Id.
[10] Id.
[11] Id.
[12] Id.
[13] Id.
[14] Id.
[15] Id.
[16] Id.
[17] 5 C.F.R. Part 732 (2008); 5 C.F.R. Part 736 (2008).
[18] Id at Part 732.102.
[19] Id.
[20] Id at Part 732.301.
[21] Id.

Alleged Espionage Involving U.S. Secrets Being Delivered to China

2008-02-14T10:23:00.003-06:00

According to Department of Justice officials, a Defense Department analyst and a former engineer for Boeing Co. are alleged to have helped deliver military secrets to the Chinese government in two separate unrelated cases.^[1] The FBI arrested one immigrant from China and another from Taiwan on Monday both of whom are accused of working with the defense analyst.^[2]

The two cases — based in California and Northern Virginia — are not related according to investigators, who stated that it was merely coincidence that both would be charged on the same day.^[3]

In the first case, prosecutors said Gregg W. Bergersen, a weapons systems policy analyst at the Department of Defense, provided classified defense information to a New Orleans furniture salesman.^[4] The furniture salesman, Taiwan native Tai Kuo, relayed that information to the Chinese government.^[5] Kuo’s alleged co-conspirator in the case was Chinese national Yu Xin Kang, who is accused of acting as the go-between for Kuo and China.^[6] There is no indication of how much money Bergersen was paid for the classified information or that he was conscious to the fact that it was being supplied to the Chinese government.^[7]

Prosecutors contend that the data allegedly supplied by Bergersen to Kuo documented every planned U.S. sale of military technology to Taiwan for the next five years.^[8]

Bergersen was charged under 18 U.S.C. § 793(d) with conspiracy to deliver national defense information to a person not entitled to receive it.^[9] This statute criminalizes any attempt to deliver to a person not authorized to receive it, any document, writing, code book, signal book, sketch, photograph, photographic negative, blueprint, plan, map, model, instrument, appliance, or note related to the national defense that could be used to injure the United States or give advantage to a foreign nation.^[10] Violation of this statute carries a maximum sentence of 10 years in prison.^[11]

Kuo and Kang were both charged with conspiracy to deliver national defense information to a foreign government.^[12] Under 18 U.S.C. § 794 it is a crime to provide a foreign nation with any document, writing, code book, signal book, sketch, photograph, photographic negative, blueprint, plan, map, model, instrument, appliance, or note related to the national defense, with an intent to injure the United States or give an advantage to a foreign nation.^[13] Although the elements of Kuo and Kang’s charge and Bergersen’s charge are similar, Kuo and Kang face much stiffer penalties. The statute which they allegedly violated is a capital offense, meaning that they may face the death penalty or imprisonment for up to life without parole.^[14]
In the second case, ex-Boeing engineer, Donfang Chung, was subject to an FBI investigation that stems from an inquiry into another Chinese-born engineer convicted of stealing military data for the Chinese government in 2007.^[15]

Prosecutors contend that Chinese officials were tasking Chung to provide data on various U.S. military and civilian aircraft, including the Space Shuttle.^[16] Chung is accused of having met with Chinese government officials over an 18-year span during which he allegedly discussed how to transfer U.S. information to China.^[17]

Chung, the holder of a security clearance, worked for contractor Rockwell International for 13 years between 1973 and 1996, until Boeing acquired Rockwell's defense and space firm. In 2002, he retired from Boeing, but returned the next year as a contractor. He left Boeing completely in 2006.^[18]

Chung is also being charged with espionage, in addition to conspiracy and obstruction of justice.^[19]

[1] Lara Jakes Jordan, Arrests Made in Chinese Spying Cases, The Washington Post, Feb. 12, 2008 (available at http://www.washingtonpost.com/wp-dyn/content/article/2008/02/12/AR2008021200316_pf.html).
[2] Id.
[3] Id.
[4] Id.
[5] Id.
[6] Id.
[7] Id.
[8] Id.
[9] Id.
[10] 18 U.S.C. § 793(d) (2008).
[11] Id.
[12] Lara Jakes Jordan, Arrests Made in Chinese Spying Cases, The Washington Post, Feb. 12, 2008 (available at http://www.washingtonpost.com/wp-dyn/content/article/2008/02/12/AR2008021200316_pf.html).
[13] 18 U.S.C. § 794 (2008).
[14] Id.
[15] Lara Jakes Jordan, Arrests Made in Chinese Spying Cases, The Washington Post, Feb. 12, 2008 (available at http://www.washingtonpost.com/wp-dyn/content/article/2008/02/12/AR2008021200316_pf.html).
[16] Id.
[17] Id.
[18] Id.
[19] Id.

U.S. Commited to Fighting Economic Espionage

2008-01-28T22:23:00.000-06:00

The FBI is ramping up its efforts locally and across the country to protect the technology and trade secrets of American businesses and universities through a recently unveiled program focused on economic espionage.^[1]

This is because the United States is a prime target of foreign spies seeking to steal away critical information -- not only military plans and national security secrets but also valuable technological and business trade secrets.^[2]

Through two recently launched initiatives, called the Business Alliance and the Academic Alliance, FBI officials are now reaching out to area universities and businesses to inform them about what they can do to help protect their research and development.^[3] Both efforts are being run out of the Bureau's Counterintelligence Domain Program.^[4]

FBI counterintel experts have developed materials outlining the risk factors and what business and university leaders can do to protect their trade secrets. Agents will also visit area businesses and universities to present the information to employees and students.^[5]

Eldredge says other countries know that American technologies, trade and military secrets will help them modernize their militaries and build their economies.^[6] He adds that their interest can range from big innovations that give the United States the leg up in the global marketplace to common or harmless technologies that could actually be used in developing or improving weapons.^[7]

"The way to protect our country is through awareness and education," Eldredge says.
According to information provided by the FBI, trade secrets involve all forms and types of financial, business, scientific, technical, economic or engineering information or data.^[8]

President Clinton signed the Economic Espionage Act into law in 1996 to protect intellectual property, especially trade secret theft.^[9] Under 18 U.S.C. § 1831 it is a crime for a foreign government or a foreign government controlled company to engage in economic espionage.^[10] 18 U.S.C. § 1832 prohibits foreign or domestic commercial theft of trade secrets.^[11]

Under section 1832, the Government must prove beyond a reasonable doubt that: (1) the defendant stole, or without the owner's authorization obtained, sent, destroyed, or conveyed information; (2) the defendant knew or believed that the information was a trade secret; (3) the information was in fact a trade secret; (4) the defendant intended to convert the trade secret to the economic benefit of somebody other than the owner; (5) the defendant knew or intended that the owner of the trade secret would be injured; and (6) the trade secret was related to, or was included in, a product that was produced or placed in interstate or foreign commerce. It is also illegal to attempt to steal a trade secret, or to receive, purchase, destroy, or possess a trade secret which the defendant knew was stolen.^[12]

The penalty for a conviction under section 1832 is a sentence of up to ten years and fines of up to $250,000 for an individual.^[13]

Economic Espionage
In order for one to be convicted of this statute, the government prosecutor, Assistant United States Attorney (AUSA), must prove beyond a reasonable doubt: 1) That the defendant stole, duplicated, communicated, bought, or otherwise obtained or provided access to trade secrets, without authorization; or 2) That the defendant conspired with one or more person to commit any of the above mentioned acts; 3) That the defendant knew or intended for the acts to benefit any foreign government, entity, or agent.^[14]

^[1] Catherine Dominguez, FBI launches education campaign targeting 'economic espionage', San Antonio Business Journal, January 21, 2008, available at http://www.mlive.com/business/ambizdaily/bizjournals/index.ssf?/base/abd-3/120090121147510.xml (last visited January 28, 2008).
^[2] Id.
^[3] Id.
^[4] Id.
^[5] Also partnering with the FBI in this effort to educate the business and university communities are the Defense Security Service; Army Counterintelligence; the Naval Criminal Investigative Service; the Air Force Office of Special Investigations, Counterintelligence Field Activity; and the Department of Commerce.
^[6] Id.
^[7] Id.
^[8] Id.
^[9] U.S. Dept. of Justice Cybercrimes Manual
^[10] Id.
^[11] Id.
^[12] 18 U.S.C. § 1832(2008).
^[13] Id.
^[14] 18 U.S.C. § 1831 (2007)

U.S. Spy Satelite to Crash Towards Earth

2008-01-27T00:24:00.000-06:00

Anonymous U.S. government sources assert that a large U.S. spy satellite has gone out of control and is expected to crash to Earth some time in late February or March.^[1] The sources said the satellite has lost power and propulsion, and could contain hazardous materials.^[2]

The White House said it was monitoring the situation, adding that "numerous" satellites had come out of orbit and fallen back to Earth harmlessly over the years.^[3] "We are looking at potential options to mitigate any possible damage this satellite may cause," said Gordon Johndroe, who speaks for the US National Security Council. ^[4]

John Pike, director of the defense research group GlobalSecurity.org, asserted that spy satellites are typically disposed of through a controlled re-entry into the ocean so that no one else can access the spacecraft.^[5]Pike estimated that the spacecraft weighed about 9072kg and is the size of a small bus, and that it was extremely unlikely that authorities would decide to shoot the satellite down with a missile as it would create debris that could hit the ground.^[6]

The agency notes that the largest uncontrolled re-entry by a NASA craft was Skylab, a 78-ton abandoned space station that fell from orbit in 1979.^[7] Its debris dropped harmlessly into the Indian Ocean and across a remote section of Western Australia.^[8]

In 2002, officials believe debris from a 7,000-pound science satellite hit the Earth's atmosphere and rained down over the Persian Gulf, a few thousand miles from where they first predicted it would crash.^[9]

^[1] BBC Staff, Satellite could plummet to Earth, BBC News, Saturday, 26 January 2008, available at http://news.bbc.co.uk/2/hi/science/nature/7211443.stm (last visited January 26, 2008).
^[2] Id.
^[3] Id.
^[4] Id.
^[5] Al Jazeera Staff, US Spy Satellite to fall to Earth, Al Jazeera News, January 27, 2008, available at http://english.aljazeera.net/NR/exeres/49F41D2B-41E8-473C-A7F8-8F38D3379C39.htm (last visited January 26, 2008).
^[6] Id.
^[7] BBC Staff, supra note 1.
^[8] Id.
^[9] Id.

Bush Administration Freezes Iranian Money

2008-01-20T16:31:00.000-06:00

The Bush administration has moved to financially clamp down on a general in Iran's nationally powerful military wing, a Syrian TV station, and three other individuals accused of helping insurgents in Iraq.^[1] The Treasury Department's action means that any bank accounts or other financial assets found in the United States belonging to those named must be frozen, and Americans also are prohibited from doing business with them.^[2]

Ahmed Foruzandeh, a brigadier general in Iran's Revolutionary Guard Corps' Quds Force was one of the people named in the department's order.^[3] The Quds Force, Iran's special operations unit, is part of the Guard Corps, the country's military wing.^[4] The United States asserts that Foruzandeh and his associates provided financial and material support for violent acts against U.S.-led coalition forces in Iraq as well as Iraqi security forces.^[5]

''Iran and Syria are fueling violence and destruction in Iraq….Iran trains, funds and provides weapons to violent Shia extremist groups, while Syria provides safe haven to Sunni insurgents and financiers,'' said Stuart Levey, Treasury's under secretary for terrorism and financial intelligence.^[6]

Also mentioned in the order was Abu Mustafa al-Sheibani, the asserted leader of a network of Shia extremists that provide logistical and material support for acts of violence in Iraq; Ismail Hafiz al Lami, accused of directing acts of violence against Iraqi civilians, and Mishan Rakin Thamin al-Jaburi.^[7]

Al-Zawra TV station in Syria, which the U.S. says is owned and controlled by al-Jaburi, also was named in the department's order; it has been alleged the station has received money from al-Qaida, and has aired coded messages through patriotic songs to the Sunni terrorist group, the Islamic Army of Iraq.^[8]

Federal criminal defense attorney Douglas McNabb has previously discussed the growing national security issues in Iran, here.

^[1] Jeannine Aversa, U.S. Moves to Freeze Assets of Iranian Military Quds Force General, Syrian TV Station, Associated Press Newswire, January 9, 2008, available at LEXIS, News Library, Wire News Services.
^[2] Id.
^[3] Id.
^[4] Id.
^[5] Id.
^[6] Id.
^[7] Id.
^[8] Id.

McConnell Suggests the U.S. Monitor All Internet Use

2008-01-18T21:26:00.000-06:00

Michael McConnell, U.S. Director of Intelligence, thinks the threat of cyber 9/11 is so great that the U.S. government should have unfettered and warrantless access to U.S. citizens' Google search histories, private e-mails and file transfers, in order to spot the cyberterrorists in our midst.^[1]

In May of 2007 McConnell convinced President Bush that a massive cyber-attack on a single U.S. bank would be worse for the economy than the terrorist attacks of September 11.^[2] In response, the NSA developed a plan to eavesdrop on internet goings on -- in order to protect it. this frightening circular argument seems to be gaining more ground.

Ed Giorgio, who is working with McConnell on the plan, asserted that in order for cyberspace to be policed, internet activity will have to be closely monitored; that would entail giving the government the requisite authority to examine the content of any e-mail, file transfer, or Web search.^[3]

The greenlight for any wiretaps currently comes from the Foreign Intelligence Surveillance Court; and that entity only has the ability to grant intercepts that physically happen within the borders of the United States.^[4] The NSA has always been free to intercept foreign communications overseas -- the mission for which they were created and funded -- even if the call passes through a U.S. switch.^[5] The FISA law is intended to prevent the NSA from operating inside the United States, thus making McConnell’s plan all the more troubling.^[6]

Since 2005, the warrantless wiretapping program has become the topic of 40 lawsuits.^[7]Federal criminal defense attorney Douglas McNabb has previously blogged about the U.S. government’s warrantless wiretapping, here.

^[1] Ryan Singel, NSA Must Examine All Internet Traffic to Prevent Cyber Nine-Eleven, Top Spy Says, Wired, January 15, 2008, available at http://blog.wired.com/27bstroke6/2008/01/feds-must-exami.html (last visited January 16, 2008).
^[2] Id.
^[3] Id.
^[4] Id.
^[5] Id.
^[6] Id.
^[7] John Leyden, US warrantless wiretapping predates 9/11, The Register, December 18, 2007, available at http://www.theregister.co.uk/2007/12/18/warrantless_wiretapping_latest/ (last visted December 28, 2007).

Mak Denied Rehearing

2008-01-08T23:28:00.000-06:00

67-year-old engineer Chi Mak was found guiltyof a very serious federal national security crime; he and his family stole secrets from his employer, L-3 Communications Holdings Inc. ^[1]The alleged target was data about Navy submarine engines that run silently to avoid detection.^[2]

The engineer lost his battle to overturn the conviction Monday, after a federal judge denied a motion for a new trial. Mak faces up to 45 years in prison and he is scheduled to be sentenced March 24 by U.S. District Court Judge Cormac J. Carney.^[3]

In May, a jury convicted Mak of exporting sensitive defense technology to China by giving his brother three encrypted files containing protected naval technology to take to China; a search of his house also yielded other documents containing military technology.^[4]

One of Mak’s contentions was that his constitutional rights were violated because prosecutors did not offer immunity to one of his co-workers to testify.^[5] The co-worker, Dr. Yuri Khersonsky, presented a paper on technology similar to that which led to Mak's arrest during an international conference, though he did not obtain approval to do so.^[6] Khersonsky ended up declining to testify in the case and taking the Fifth Amendment, partly because he could have incriminated himself during Mak's trial.^[7]

Mak's federal criminal defense attorney, Ronald Kaye, alleged Khersonsky's testimony would have been vital to exonerating Mak, and would have shown jurors the material was already in the public eye.^[8] He alleged prosecutors should have offered Khersonsky immunity, allowing him to take the stand because this effectively cost them their “best witness.”^[9]

But the judge pushed aside Mak’s arguments, ruling that the testimony would not have dispositive regarding the trial’s outcome and specifically could not have shown if Mak intended to break the law.^[10]

Under 18 U.S.C. § 794, Gathering or Delivering Defense Information to Aid a Foreign Government, the government must prove that the defendant provided, communicated, transmitted, or attempted to do the same, any document, material, or information to a foreign government; or that the defendant provided, communicated, transmitted, or attempted to do the same, any document, material, or information to a foreign government; or that during a time of war, the defendant collected, recorded, published, or communicated information relative to the Armed Forces to the enemy; That the defendant intended, knew, or should reasonably have known, that the information was to be used to in some way injure the United States.^[11]

Anyone convicted under this statute shall be fined and may be imprisoned for life. In those instances in which a jury finds that the actions of the defendant led to the death of any person, or directly concerned nuclear weaponry, military spacecraft or satellites, early warning systems, other means of defense or retaliation against large-scale attack, war plans, COMINT, or any other major weapons system or major element of defense strategy, then the death penalty may be sought. Additionally, any and all material, money, or possessions involved in the violation of this statute will be seized by the government.^[12]

^[1] Jeff Bliss, China's Spying Overwhelms U.S. Counterintelligence, Bloomberg, Apr. 2, 2007, available at http://www.bloomberg.com/apps/news?pid=20601087&sid=ab2PiDl1qW9Q&refer=home (last visited Apr. 2, 2007).
^[2] Id.
^[3] Rachanee Srisavasdi, Judge denies new trial for ex-Anaheim engineer-spy, The Orange County Register, Monday, January 7, 2008, available at http://www.ocregister.com/news/mak-trial-prosecutors-1955318-khersonsky-technology (last visited January 8, 2008).
^[4] Id.
^[5] Id.
^[6] Id.
^[7] Id.
^[8] Id.
^[9] Id.
^[10] Id.
^[11] 18 U.S.C. § 794 (2005).
^[12] Id.