FBI busts US couple in submarine data-for-crypto bribery scheme

Couple arrested for allegedly selling nuclear-powered submarine secrets for $100,000

Logo for Monero (XMR)                                 
U.S. authorities allege a Navy engineer was paid a bribe in Monero (XMR) - Photo: GetMonero.org
                                

The US Department of Justice alleges a couple near Washington DC sold secrets about nuclear-powered submarines in exchange for $100,000 in cryptocurrency. 

FBI and Naval Criminal Investigative Services officers arrested Jonathan Toebbe, 42, and Diana Toebbe, 45, in Jefferson County, West Virginia, on 9 October.

The Toebbes are charged with conspiracy to communicate restricted data and communication of restricted data under the Atomic Energy Act. 

Documents filed in the US District Court for the Northern District of West Virginia allege Department of the Navy nuclear engineer Jonathan Toebbe communicated in March 2020 under a pseudonym, via encrypted ProtonMail. He contacted a person he believed to be an agent for a foreign government, which is not specified in the court documents. It was in fact an undercover FBI agent.

They negotiated to swap restricted data on submarine designs, specifications and operational instructions for three payments in the Monero (XMR) cryptocurrency. 

“According to public sources, Monero is a decentralized cryptocurrency that uses a publicly distributed ledger with privacy-enhancing technologies that obfuscate transactions to achieve anonymity and fungibility,” said the court filing. 

Jonathan Toebbe has national security clearance, and is assigned to the Naval Nuclear Propulsion Program. The court documents describe how Toebbe is alleged to have downloaded the restricted submarine data on SD cards.

He hid them in a peanut butter sandwich, chewing gum package and Band-Aid in a Zip-Loc bag for the deliveries at so-called “dead drop” locations. Toebbe's wife, Diana, aided the scheme, including in the capacity as a "lookout" for the dead drops. 

The court documents say some of the data included schematic designs for the Virginia-class submarine, which costs $3bn per unit, and boasts stealth intelligence-gathering and weapons systems. 

Toebbe allegedly went by the pseudonym Alice Hill. One of the messages he allegedly sent to the agent, who used the pseudonym Bob Burns, proposed charging up to $5m in Monero payments for 49 more packages of top secret information on the nuclear subs.

The website for 2014-launched Monero boasts that it is confidential and untraceable, because it “uses various privacy-enhancing technologies to ensure the anonymity of its users.”

In September 2020, the Internal Revenue Service offered a $625,000 bounty to crack Monero.

The couple from Annapolis, Maryland, will make a first appearance on 12 October in a West Virginia court.

Read more: Monero vs Bitcoin: The pros and cons

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