Maine Resident Charged and Arrested for Allegedly Engaging in Cyber “Sextortion” of New Hampshire Victim

WASHINGTON – A Maine resident was charged in a criminal complaint unsealed today in the District of New Hampshire for allegedly engaging in a type of cyber extortion known as “sextortion,” announced Assistant Attorney General Lanny A. Breuer of the Justice Department’s Criminal Division and U.S. Attorney John P. Kacavas of the District of New Hampshire.

 John Bryan Villegas, 21, of Kittery, Maine, was arrested yesterday and made his initial appearance today in federal court in New Hampshire.  Villegas is charged with one count of engaging in computer intrusion involving extortion and one count of making extortionate interstate threats.

 The complaint affidavit alleges that Villegas attempted to extort the victim, a New Hampshire resident, into providing him with sexually explicit photographs and videos of the victim.  He sent the victim interstate e-mail messages in which he threatened to publish on the internet, and distribute to the victim’s neighbors and work and social acquaintances, other sexually explicit photographs of the victim that he obtained from a computer without authorization.

 If convicted, Villegas faces a maximum sentence of two years in prison on the interstate threats charge and five years in prison on the computer intrusion charge, to be followed by up to three years of supervised release, a fine of up to $500,000 and restitution.

 The case was investigated by the U.S. Secret Service and is being prosecuted by Trial Attorney Mona Sedky of the Computer Crime and Intellectual Property Section in the Justice Department’s Criminal Division and Assistant U.S. Attorney Arnold H. Huftalen of the District of New Hampshire.  The Department would like to thank the cooperation of the Dover, N.H., and Kittery, Maine, police departments and the Naval Criminal Investigative Service (NCIS).

 The details contained in the complaint are allegations.  The defendant is presumed to be innocent unless and until proven guilty beyond a reasonable doubt in a court of law.

Virginia Beach Man Sentenced to Fourteen Years in Prison on Gun Charges

NORFOLK, Va. – Leonard Clarence Davis, 43, of Virginia Beach, Va., was sentenced today in Norfolk federal court to nine years in prison for transferring 16 unregistered machine guns, and to five years in prison for possession of a firearm after having been convicted of a felony. The sentences are to run consecutively.

Neil H. MacBride, United States Attorney for the Eastern District of Virginia, made the announcement after Davis was sentenced by United States District Senior Judge Robert G. Doumar. Davis previously pled guilty to the charges on December 20, 2011.

According to court records, Davis and co-defendant Christopher Aaron Phillips were the targets of a joint investigation in the fall of 2011. During the investigation, Davis and Phillips sold 26 fully automatic machine guns and 65 homemade pipe bombs to an undercover Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF) agent in a series of undercover purchases that took place in September and October of 2011. At the conclusion of the investigation, agents and police detectives executed federal search warrants and arrest warrants on October 28, 2011, at Davis’ residence on Sunstream Parkway, and Phillips’ place of business, Combat Weapons’ Coatings on Pleasure House Drive, both located in Virginia Beach. Davis’ co-defendant Phillips pled guilty in federal court to one count of conspiracy to transfer machine guns on May 8, 2012. His sentencing is scheduled for September 6, 2012.

This case was investigated by the ATF; the Chesapeake Police Department; and Naval Criminal Investigative Services. Assistant United States Attorney Sherrie S. Capotosto is prosecuting the case on behalf of the United States.

A copy of this press release may be found on the website of the United States Attorney’s Office for the Eastern District of Virginia at http://www.justice.gov/usao/vae. Related court documents and information may be found on the website of the District Court for the Eastern District of Virginia at http://www.vaed.uscourts.gov or on https://pcl.uscourts.gov.

Former Navy Seaman Convicted in Child Pornography Case

WASHINGTON – Former U.S. Navy Seaman James Driver, 24, of Midland, Mich., was convicted today by a federal jury in the Eastern District of Michigan on one count of possession of child pornography, announced Assistant Attorney General Lanny A. Breuer of the Justice Department’s Criminal Division.

 According to court documents and testimony presented during the trial, the case originated from a Naval Criminal Investigative Service (NCIS) investigation into an individual, later identified as James Driver, suspected of possessing and distributing child pornography using a peer-to-peer file sharing network.  Driver, who at the time was a U.S. Navy seaman stationed in Japan, admitted in an interview to being interested in child pornography for the past five years.

 At sentencing, Driver faces a maximum sentence of 10 years in prison, a $250,000 fine and lifetime supervised release. Sentencing is scheduled for Sept. 6, 2012.

 This case was brought as part of Project Safe Childhood, a nationwide initiative to combat the growing epidemic of child sexual exploitation and abuse, launched in May 2006 by the Department of Justice.  Led by U.S. Attorneys’ Offices and the Child Exploitation and Obscenity Section (CEOS) of the Justice Department’s Criminal Division, Project Safe Childhood marshals federal, state and local resources to better locate, apprehend and prosecute individuals who exploit children via the Internet, as well as to identify and rescue victims.  For more information about Project Safe Childhood, please visit www.projectsafechildhood.gov.

 The case is being prosecuted by CEOS Trial Attorneys Thomas Franzinger and Mi Yung Park.  The case was investigated by NCIS and CEOS’s High Technology Investigative Unit.  Assistance was provided by the FBI’s Innocent Images Unit.

Members of Drug Smuggling Organization Sentenced

TAMPA, FL—U.S. Attorney Robert E. O’Neill announces that earlier this week, U.S. District Judge Elizabeth A. Kovachevich sentenced Elias Estupinan Rengifo (48, Colombia, South America) to 135 months in federal prison for conspiring with others to possess with intent to distribute five or more kilograms of cocaine on board vessels subject to the jurisdiction of the United States. Rengifo pled guilty on October 12, 2011.

Rengifo had three co-conspirators—Horacio Aguirre Perea (42), Vicente Aguirre Perea (45), and Wilson Vallejo (41)—all of Colombia, South America. All three were arrested in Colombia, extradited to the United States, subsequently pled guilty to the same drug conspiracy charge, and were previously sentenced.

Horacio Aguirre Perea was arrested in Colombia on August 5, 2009 and pled guilty on October 27, 2010. On January 28, 2011, he was sentenced to 235 months in federal prison.

Vicente Aguirre Perea was arrested in Colombia on August 6, 2009 and pled guilty on January 26, 2011. On April 13, 2011, he was sentenced to 180 months in federal prison.

Wilson Vallejo was arrested in Colombia on March 16, 2010 and pled guilty on March 29, 2011. He was sentenced on June 17, 2011 to 135 months in federal prison.

According to court documents, Rengifo and his co-conspirators were knowing and willing participants in an on-going maritime cocaine smuggling organization operating along Colombia’s southern coast. Between 2005 and 2009, Rengifo and his co-conspirators organized multiple maritime cocaine smuggling trips, including: (1) the stateless go-fast vessels interdicted by the United States in the Pacific Ocean on February 19, 2005 and December 2, 2006; and (2) the stateless self-propelled semi-submersible (SPSS) vessels interdicted by the United States in the Pacific Ocean on March 1, 2008 and June 16, 2008. Coast Guard officers seized more than 1,000 kilograms of cocaine from both of the interdicted go-fast vessels. The SPSS vessels were also carrying cocaine, but were scuttled before Coast Guard officers could recover any cocaine. The mariners on the four interdicted vessels were first brought into the United States in the Middle District of Florida.

This case was investigated by OCDETF’s Panama Express Strike Force South. The strike force includes agents and analysts from the Federal Bureau of Investigation, the Drug Enforcement Administration, U.S. Immigration and Customs Enforcement, the United States Coast Guard Investigative Service, the Naval Criminal Investigative Service, and Joint Interagency Task Force South. It was prosecuted by Assistant United States Attorney Christopher F. Murray.

Noted Scientist Pleads Guilty to Attempted Espionage

Scientist Arrested in 2009 Following Undercover Operation

WASHINGTON - Stewart David Nozette, a scientist who once worked for the Department of Energy, the Department of Defense, the National Aeronautics and Space Administration and the White House’s National Space Council, pleaded guilty today to attempted espionage for providing classified information to a person he believed to be an Israeli intelligence officer.

The guilty plea, which took place this morning in the U.S. District Court for the District of Columbia, was announced by Lisa Monaco, Assistant Attorney General for National Security; Ronald C. Machen Jr., U.S. Attorney for the District of Columbia; and James W. McJunkin, Assistant Director in Charge of the FBI’s Washington Field Office.

Nozette, 54, of Chevy Chase, Md., pleaded guilty to one count of attempted espionage.   Senior Judge Paul L. Friedman, who presided at the plea hearing, scheduled a status hearing for Nov. 15, 2011.   No sentencing date was set.  The plea agreement, which is subject to the judge’s approval, calls for an agreed-upon prison term of 13 years.

Nozette has been in custody since his arrest on Oct. 19, 2009.   FBI agents arrested him following an undercover operation in which he provided classified materials on three occasions, including one occasion that forms the basis for today’s guilty plea.   He was subsequently indicted by a federal grand jury.   The indictment does not allege that the government of Israel or anyone acting on its behalf committed any offense under U.S. laws in this case.

“ Stewart Nozette betrayed America’s trust by attempting to sell some of the nation’s most closely-guarded secrets for profit.   Today, he is being held accountable for his actions.    As this case demonstrates, we remain vigilant in protecting America’s secrets and in bringing to justice those who compromise them,” said Assistant Attorney General Monaco.        

“Stewart Nozette was once a trusted scientist who maintained high-level government security clearances and was frequently granted access to classified information relating to our national defense.   Today he is a disgraced criminal who was caught red-handed attempting to trade American secrets for personal profit.  He will now have the next 13 years behind bars to contemplate his betrayal,” said U.S. Attorney Machen.  “The FBI and its partners deserve tremendous credit for their outstanding work on this case.   This investigation and prosecution demonstrate our commitment to identifying and punishing those who would put our national security at risk.”

“Preventing the loss or compromise of high-technology and vital national security information is a top priority of the FBI,” said Assistant Director in Charge McJunkin.  “This case is a prime example of what happens when a person decides to sell our nation’s most valuable secrets for individual gain.”

Background

Nozette received a Ph.D. in Planetary Sciences from the Massachusetts Institute of Technology in 1983.   He has worked in various capacities on behalf of the U.S. government in the development of state-of-the-art programs in defense and space.   For example, Nozette worked at the White House on the National Space Council, Executive Office of the President, from approximately 1989 through 1990.   He also worked as a physicist for the U.S. Department of Energy’s Lawrence Livermore National Laboratory from approximately 1990 to 1999, where he designed highly advanced technology.

Among other things, Nozette assisted in the development of the Clementine bi-static radar experiment which purportedly discovered water ice on the south pole of the moon.   A version of the Clementine satellite currently hangs on display at the National Air and Space Museum of the Smithsonian Institution in Washington, D.C., and was later hailed as the vanguard of the new “faster, cheaper, better” revolution in space exploration.

Nozette was also the president, treasurer and director of the Alliance for Competitive Technology (ACT), a non-profit organization that he organized in March 1990.   Between January 2000 and February 2006, Nozette, through his company, ACT, entered into agreements with several government agencies to develop highly advanced technology.   Nozette performed some of this research and development at the U.S. Naval Research Laboratory in Washington, D.C., the Defense Advanced Research Projects Agency in Arlington, Va., and the National Aeronautics and Space Administration Goddard Space Flight Center in Greenbelt, Md.

According to a factual proffer in support of the guilty plea, from 1989 through 2006, Nozette held security clearances as high as TOP SECRET and had regular, frequent access to classified information and documents related to the national defense of the United States.    The factual proffer also provides details about the undercover operation that led to Nozette’s arrest.  

The Investigation

According to the factual proffer, on Feb. 16, 2007, law enforcement agents executed a search warrant at Nozette’s home in Maryland as part of a fraud investigation and found classified documents.   Further investigation into the classified documents revealed that in 2002, Nozette sent an e-mail threatening to take a classified program he was working on, “to [foreign country] or Israel and do it there selling internationally...” As a result of this and other information giving rise to suspicion of espionage, the FBI decided to conduct an undercover operation.

On Sept. 3, 2009, Nozette was contacted via telephone by an individual purporting to be an Israeli intelligence officer from the Mossad, but who was, in fact, an undercover employee of the FBI.   During that call, the defendant agreed to meet with the undercover employee that day on Connecticut Avenue N.W., in front of the Mayflower Hotel in downtown Washington, D.C.  

Later that day, Nozette met with the undercover employee and had lunch in the restaurant of the Mayflower Hotel.   After the undercover employee made it clear that he was a “Mossad” agent, Nozette stated, “Good.   Happy to be of assistance.”

After lunch in the hotel restaurant, Nozette and the undercover employee retired to a hotel suite to continue their discussion.   During the conversation, the defendant informed the undercover employee that he had clearances “all the way to Top Secret SCI, I had nuclear…,” that “anything that the U.S. has done in space I've seen,” and that he would provide classified information for money and a foreign passport to a country without extradition to the United States.

The defendant and the undercover employee met again on Sept. 4, 2009, at the Mayflower Hotel.   During this encounter, Nozette assured the undercover employee that, although he no longer had legal access to any classified information at a U.S. government facility, he could, nonetheless, recall the classified information to which he had been granted access.   The defendant said, “It’s in my” head, and pointed to his head.  

Undercover Operation Continues

On Sept. 10, 2009, FBI agents left a letter in the prearranged “dead drop” facility for the defendant.   In the letter, the FBI asked Nozette to answer a list of questions concerning classified U.S. satellite information.   FBI agents also provided signature cards, in the defendant’s true name and an alias, for Nozette to sign and asked the defendant to provide four passport sized photographs for the Israeli passport the defendant requested.   The FBI agents also left $2,000 cash for the defendant in the “dead drop” facility, which Nozette retrieved the same day, along with the questions and signature cards.

On Sept. 16, 2009, Nozette left a manila envelope in the “dead drop” facility in the District of Columbia. One of the “answers” provided by the defendant contained information classified as SECRET/SCI which related to the national defense, in that it directly concerned classified aspects and mission capabilities of a prototype overhead collection system and which disclosure would negate the ability to support military and intelligence operations.   In addition to disclosing SECRET/SCI information, Nozette offered to reveal additional classified information that directly concerned nuclear weaponry, military spacecraft or satellites, and other major weapons systems.  

On Sept. 17, 2009, FBI agents left a second communication in the “dead drop” facility for the defendant.   In the letter, the FBI asked Nozette to answer another list of questions concerning classified U.S. satellite information.   Nozette retrieved the questions from the “dead drop” facility later that same day.

On Oct. 1, 2009, Nozette left a manila envelope in the “dead drop” facility in the District of Columbia.   The FBI also left a cash payment of $9,000 in the “dead drop” facility.   Later that day, the FBI agents retrieved the sealed manila envelope left by the defendant.   Inside the envelope, FBI agents discovered the encrypted thumb drive that was provided to Nozette on Sept. 17, 2009, which included another set of “answers” from the defendant.   The “answers” contained information classified as TOP SECRET/SCI and other information classified as SECRET/SCI.   This classified information related to the national defense, in that it directly concerned satellites, early warning systems, means of defense or retaliation against large-scale attack, communications intelligence information, and major elements of defense strategy.   (This information is what formed the basis for the charge in today’s guilty plea.)

On Oct. 5, 2009, Nozette left a manila envelope in the “dead drop” facility in the District of Columbia.   Later that day, the FBI agents retrieved the sealed manila envelope left by the defendant.    Inside the envelope, FBI agents discovered the encrypted thumb drive that was provided to Nozette on Oct. 1, 2009, which included another set of “answers” from the defendant.   The “answers” contained information classified as TOP SECRET/SAR.   This classified information related to the national defense, in that it directly concerned capabilities of a U.S. military weapon system research and development effort.

Nozette and the undercover employee met again on Oct. 19, 2009, at the Mayflower Hotel.   During that meeting, the following exchanges took place:

NOZETTE:    “So, uh, I gave you even in this first run, some of the most classified information that there is. . . .   I’ve sort of crossed the Rubicon. . . .   Now the, uh, so I think when I said like fifty K, I think that was probably too low. . . .The cost to the U.S. Government was two hundred million. . . .   to develop it all.   Uh, and then that’s not including the launching of it. . .Uh, integrating the satellites. . . .   So if you say okay that probably brings it to almost a billion dollars. . .   So I tell ya at least two hundred million so I would say, you know, theoretically I should charge you certainly, you know, at most a one percent.”

Nozette was arrested soon after he made these statements.   He was subsequently indicted on four charges of attempted espionage.   Under the plea agreement, Nozette pleaded guilty to the third count of the indictment, arising out of his passing of TOP SECRET/SCI information on Oct. 1, 2009.

At the time of his arrest, Nozette was awaiting sentencing in another federal case. On Jan. 30, 2009, he pleaded guilty in the U.S. District Court for the District of Columbia to charges of conspiracy to defraud the U.S. government with respect to false claims and tax evasion in an amount up to $399,999.   In that case, Nozette agreed to pay restitution of $265,205 to the U.S. government.   Nozette is awaiting sentencing in the case.   Under terms of today’s plea, the sentence in the fraud case is to run concurrently with the sentence for attempted espionage.  

This investigation was conducted by the FBI’s Washington Field Office, with assistance from the Naval Criminal Investigative Service, Naval Audit Service, National Reconnaissance Office, Air Force Office of Special Investigations, Defense Computer Forensics Laboratory, Defense Advanced Research Projects Agency, Defense Criminal Investigative Service, Defense Contract Audit Agency, U.S. Army 902nd Military Intelligence Group, National Aeronautics and Space Administration (NASA) Office of Counterintelligence, NASA Office of Inspector General, Department of Energy , Internal Revenue Service (IRS) Criminal Investigation Division, IRS Tax Exempt & Government Entities group, U.S. Customs and Border Protection and U.S. Postal Inspection Service, as well as other partners in the U.S. intelligence community.

The prosecution is being handled by Trial Attorneys Deborah A. Curtis and Heather M. Schmidt, from the Counterespionage Section of the Justice Department’s National Security Division, and Assistant U.S. Attorney Anthony Asuncion, from the U.S. Attorney’s Office for the District of Columbia.

U.S. Citizen Arrested Pursuant to an Official Request by the Government of Mexico for Extradition

United States Attorney Laura E. Duffy announced today that United States citizen Cruz Edward Dominguez was arrested on June 23, 2011, pursuant to an official request by the Government of Mexico for his arrest and extradition on charges of aggravated homicide.

According to a complaint filed in U.S. federal court, Dominguez is wanted for killing Joshua Allen Dietrich, a United States Navy seaman, in a nightclub in Tijuana, Baja California, on June 9, 2002. The complaint alleges that during a fight between various patrons of the “Myster E’s” nightclub, Dominguez stabbed Dietrich with a folding pocket knife that Dominguez had brought into the nightclub.

Dominguez' s arrest concludes a nine-year investigation involving substantial diplomatic efforts, complex international issues and extensive legal processes. The Government of Mexico worked closely with the U.S. Department of Justice, the Naval Criminal Investigative Service, U.S. State Department, the Federal Bureau of Investigation and U.S. Marshals Service.

Dominguez appeared today before United States Magistrate Judge Jan M. Adler and was held without bail pending a further hearing on July 19, 2011.

Founder and President of Rhode Island & Georgia Based Technology Firm Pleads Guilty in Multi-Million Dollar Naval Kickback Scheme

More Than 9 Million Dollars in Kickbacks Paid to Naval Civilian Contract Officer and Others

PROVIDENCE, RI—The founder and president of a technology services company located in Rhode Island and Georgia pleaded guilty Thursday in U.S. District Court in Providence to bribing a public official in a kickback scheme netting more than $9 million of naval funds, it was announced by United States Attorney Peter F. Neronha.

Anjan Dutta-Gupta, 58, of Roswell, GA, founder and president of Advanced Solutions for Tomorrow (ASFT), pleaded guilty to paying bribes to a civilian program manager and senior systems engineer with the United States Navy’s Naval Sea Systems Command (NAVSEA), who maintained offices in Newport, R.I and Washington, D.C., and to others, to ensure payment and additional funding to existing Naval contracts and work orders for work purportedly to be performed at ASFT.

According to information presented in court and in court documents, from about 1996 through January 2011, at least $8,000,000 was paid by ASFT (largely through its subcontractors) to a co-defendant in this case, Ralph Mariano, 52, of Arlington, VA, a civilian program manager and senior systems engineer with NAVSEA, to Mariano’s family members and to a Senior Vice President at ASFT. In addition, at least $1,200,000 was paid to subcontractors based on inflated invoices and funneled back to SIC, a corporation owned by Dutta-Gupta.

In exchange for Dutta-Gupta and ASFT’s kickbacks of millions of dollars from 1996 through 2011, according to court documents, Mariano took steps to ensure that ASFT received payment on invoices submitted, and that additional funds were added to existing ASFT contracts when needed. In his position as program manager, Mariano regularly instructed Navy contracting officers to add funding to ASFT contracts and delivery orders.

In addition, according to court documents, Mariano completed numerous Funding Certification forms when he added funds to the ASFT contracts. Through these and other mechanisms, Mariano was able to utilize his position as a program manager with the NAVSEA to add millions of dollars to existing ASFT contracts. In exchange, defendant Dutta-Gupta agreed to make regular payments to Mariano.

Anjan Dutta-Gupta is scheduled to be sentenced by U.S. District Court Chief Judge Mary M. Lisi on December 9, 2011. Dutta-Gupta faces up to 15 years in federal prison, and a fine of $250,000 or three times the value of the bribe payments – whichever is greater.

Ralph Mariano, charged by way of a Criminal Complaint with participating in the kickback scheme, is awaiting trial.

The case is being prosecuted by Assistant U.S. Attorneys Lee H. Vilker and Andrew J. Reich.

This matter was investigated by agents from the Defense Criminal Services, Naval Criminal Investigative Service, Federal Bureau of Investigation, and Internal Revenue Service—Criminal Investigations.