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Nuclear engineer sells classified data to undercover FBI agents for crypto

The FBI paid tens of thousands worth of cryptocurrency to a nuclear engineer in exchange for SD cards containing classified data.

A nuclear engineer and his wife have been arrested in West Virginia on charges of espionage and selling restricted data.

The couple sold classified information regarding the designs of nuclear-powered warships to an individual they believed to represent a foreign nation for almost a year. However, the contact was an undercover FBI agent who sent payments for the data in cryptocurrency.

Jonathan and Diana Toebbe were apprehended by the FBI and the Naval Criminal Investigative Service (NCIS) on Saturday, Oct. 9. They will appear in federal court on Tuesday, Oct. 12. According to a statement from Attorney General Merrick B. Garland:

“The complaint charges a plot to transmit information relating to the design of our nuclear submarines to a foreign nation.”

Jonathan Toebbe served as a nuclear engineer assigned to the Naval Nuclear Propulsion Program and held active national security clearance through the U.S. Department of Defense.

In April 2020, the FBI became suspicious of Toebbe after spotting that he sent a package containing sample data and instructions on how to establish covert communications and purchase more information.

In June of this year, an undercover agent sent $10,000 in an unspecified cryptocurrency to Toebbe as “good faith” payment after receiving some sample data. The couple used a “dead drop” to hide an SD card containing more information inside half a peanut butter sandwich for which the agent paid a further $20,000 in crypto for the decryption keys.

A second dead drop saw the FBI pay a further $70,000 worth of crypto to Toebbe in exchange for further data on U.S. nuclear submarines. The FBI nabbed the couple after a third drop was organized.

Related: Blockchain could become a part of the US military’s strategic weaponry

The incident is not the first time U.S. federal agencies have used cryptocurrency as part of investigations targeting criminal activity.

In August, the U.S. State Department began offering compensation in the form of cryptocurrency through its “rewards for Justice” website in exchange for information leading to the capture of high-ranking foreign terrorism suspects.

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