U.S. Navy Nuclear Engineer Busted Selling Secrets for Crypto

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In Brief
  • US Navy nuclear engineer Jonathan Toebbe and his wife, Diana, have been charged with selling restricted information for cryptocurrency.

  • For almost a year, Toebbe, 42, sold restricted information on the design of nuclear-powered warships to someone they believed was a representative of a foreign power.

  • However, the representative, who sent Toebbe a total of $100,000 in cryptocurrency for the information, was actually an undercover FBI agent.

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U.S. Navy nuclear engineer Jonathan Toebbe and his wife, Diana, have been charged with selling restricted information for cryptocurrency. 

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The couple were arrested in Jefferson County, West Virginia, by the FBI and the Naval Criminal Investigative Service (NCIS) on Saturday, October 9. For almost a year, Toebbe, 42, sold restricted information on the design of nuclear-powered warships to someone they believed was a representative of a foreign power. However, the representative, who sent Toebbe a total of $100,000 in cryptocurrency for the information, was actually an undercover FBI agent.

The Toebbes have been charged in a criminal complaint for allegedly violating the Atomic Energy Act. They will have their initial appearances in federal court on Tuesday, Oct. 12, in Martinsburg, West Virginia. 

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“The complaint charges a plot to transmit information relating to the design of our nuclear submarines to a foreign nation,” said Attorney General Merrick B. Garland. “The work of the FBI, Department of Justice prosecutors, the Naval Criminal Investigative Service and the Department of Energy was critical in thwarting the plot charged in the complaint and taking this first step in bringing the perpetrators to justice.”

Toebbe’s treason

Serving as a nuclear engineer in the Department of the Navy, Toebbe was assigned to the Naval Nuclear Propulsion Program. He also held an active national security clearance through the U.S. Department of Defense, giving him access to restricted data. 

After soliciting the restricted information to a foreign government in April 2020, Toebbe began corresponding via encrypted email with an individual he believed to be a representative of the foreign government. He continued this correspondence for several months, leading to an agreement to exchange the restricted information for thousands of dollars in cryptocurrency.

In June, the undercover agent sent $10,000 in cryptocurrency to Toebbe in “good faith,” after which Toebbe proceeded to a location in West Virginia. There, with his wife standing guard, Toebbe left an SD card concealed within half a peanut butter sandwich at a pre-arranged “dead drop” location. Toebbe then emailed the undercover agent a decryption key for the SD Card after receiving an additional $20,000 in crypto.

In August, Toebbe made another “dead drop” of an SD card, this time in Eastern Virginia, concealing the SD card in a chewing gum package. He then received an additional $70,000 in cryptocurrency after sending the decryption key. However, upon attempting another pre-arranged “dead drop” at a second location in West Virginia on October 9, Toebbe and his wife were arrested by the FBI.

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Nick is a data scientist who teaches economics and communication in Budapest, Hungary, where he received a BA in Political Science and Economics and an MSc in Business Analytics from CEU. He has been writing about cryptocurrency and blockchain technology since 2018, and is intrigued by its potential economic and political usage. He can best be described as an optimistic center-left skeptic.

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