US nuclear submarine engineer and his wife are charged with passing secrets to a foreign government hidden in PEANUT BUTTER sandwiches after being paid $70,000 in crypto – but they were actually dealing with undercover FBI agents
A U.S. Navy nuclear engineer and his wife have been charged with selling secret information about nuclear submarines to an undercover FBI agent who posed as an operative for a foreign country, the Justice Department said on Sunday.
In a criminal complaint detailing espionage-related charges against Jonathan Toebbe, 42, and his wife Diana, 45, the government said he sold information for nearly the past year to a foreign power representative.
The FBI says in April 2020 Toebbe sent a package of Navy documents to a foreign government and wrote that he was interested in selling information on Virginia-class nuclear submarine reactors.
The unidentified foreign government sat on the documents before turning them over to the US in December 2020, after the election.
Toebbe was arrested in West Virginia on Saturday along with his wife, a teacher, after he had placed a removable memory card at a prearranged 'dead drop' in the state, according to the Justice Department.
He hid encrypted memory cards a peanut butter sandwich, a chewing gum packet and band-aid wrapper.
Toebbe worked for 15 months in the office of the chief of naval operations, the top officer in the military's branch.
He has worked on naval nuclear propulsion since 2012, including secret technology devised to reduce the noise and vibration of submarines, factors that can give away their location.
Toebbe stated in one message that he had hoped the foreign government would be able to extract him and his family if he was ever tracked down, saying 'we have passports and cash set aside for this purpose.'
PICTURED: Diane Toebbe, 45, and Jonathan Toebbe, 42, were charged with espionage and violation of the Atomic Energy Act after the FBI received a package from an unidentified foreign country saying it had received sensitive classified information on American nuclear submarines in December 2020, a month after President Biden was elected
Authorities say he provided instructions for how to conduct the furtive relationship, with a letter that said: 'I apologize for this poor translation into your language. Please forward this letter to your military intelligence agency. I believe this information will be of great value to your nation. This is not a hoax.'
An undercover FBI agent posing as a representative of the foreign government made contact with Toebbe and agreed to pay thousands of dollars in cryptocurrency for the information he was offering.
The emails show that at first Toebbe remained wary but that he came to trust the undercover agent due to the hefty amount he was going to be paid. It was agreed he would receive $100,00 in crypto and was paid $70,000 before he was caught.
The FBI also arranged a 'signal' to Toebbe from the country's embassy in Washington over the Memorial Day weekend. The papers do not describe how the FBI was able to arrange such a signal.
In June 2021, the FBI says, the undercover agent sent $10,000 in cryptocurrency to Toebbe, describing it as a sign of good faith and trust.
Weeks later, federal agents watched as the Toebbes arrived at an agreed-upon location in West Virginia for the exchange, with Diana Toebbe appearing to serve as a lookout for her husband during a dead-drop operation for which the FBI paid $20,000, according to the complaint.
Diane Toebbe (left) and Jonathan Toebbe (right)
The FBI recovered a blue memory card wrapped in plastic and placed between two slices of bread on a peanut butter sandwich, court documents said.
The FBI provided the contents of the memory card to a Navy subject matter expert who determined that the records included design elements and performance characteristics of Virginia-class submarine reactors, the Justice Department said.
The FBI conducted similar dead-drop exchanges over the next several months, including one in August in Virginia in which Toebbe was paid roughly $70,000 and concealed in a chewing gum package a memory card that contained schematic designs for the Virginia-class submarine, according to court documents.
One memory card included a typed message that said, in part: 'I hope your experts are very happy with the sample provided and I understand the importance of a small exchange to grow our trust.'
Many of the emails that were exchanged between Toebbe and the representative of the foreign country were transcribed in the court documents. He used two pseudonyms: Alice Hill and Bob Burns.
The messages suggest that Toebbe was offering the classified information to a power that already has nuclear submarines.
Toebbe states in one message that the information 'reflects decades of U.S. Navy 'lessons learned' that will help keep your sailors safe.'
Only six countries currently operate nuclear-powered submarines — China, France, India, Russia, the UK and the US. The US and UK are set to provide Australia with the technology to deploy nuclear-powered submarines, as part of the first initiative under the new trilateral security partnership AUKUS.
Prior to the new deal, which ignited a diplomatic row between Washington and Paris, the US had only shared the technology of its submarines with Britain. Each of these underwater craft costs an estimated $3billion to build.
The leaked secrets contained 'militarily sensitive design elements, operating parameters and performance characteristics of Virginia-class submarine reactors,' according to a federal court affidavit.
According to public Navy records, he worked for 15 months in the office of the chief of naval operations, the top officer in the military's branch.
Since 2012, Toebbe has worked for the Navy and he had high-level clearances in nuclear engineering.
Toebbe started working in the military as a civilian in 2017. He was commissioned in the Navy and rose to the rank of lieutenant before moving to the Navy Rescue, which he left in December 2020 — the month the FBI established contact with him.
According to court documents, he has worked on naval nuclear propulsion since 2012, including on technology devised to reduce the noise and vibration of submarines, factors that can give away their location.
He also worked on naval reactors in Arlington, Virginia, from 2012 to 2014. He then was a student at naval reactor school in Pittsburgh before returning to Arlington to work on reactors again.
The complaint alleges violations of the Atomic Energy Act, which restricts the disclosure of information related to atomic weapons or nuclear materials.
It is unclear how many counts the couple, who have two children and live in Annapolis, Maryland, face. However, espionage carries a maximum sentence of ten years under US law.
Diana Toebbe is a humanities teacher at the Key School, a private school in Annapolis. The K-12 school said on Sunday that she had been suspended indefinitely.
A bird's eye show of Bettis Atomic Power Laboratory lab, where the FBI claims is the only place where Toebbe could have obtained the classified information on US nuclear subs
The Toebbes are expected to have their initial court appearances Tuesday in Martinsburg, West Virginia.
No one answered at the Toebbe residence on Sunday afternoon in a waterside Annapolis community by the South River.
An outside light was on above the door of their home, and a dog barked inside.
John Cooley, who lives across the street from the Toebes, said he counted more than 30 FBI agents on his block on Saturday from about 2.30 p.m. until after dark. He said agents went inside the home.
Jerry LaFleur, a neighbor of the Toebbes, said he would occasionally waive to the Toebbes, but the only time they spoke was when to ask permission to trim the weeds on the family's side of the backyard fence they share.
'He seemed like a nice, ordinary guy, nothing that would make me think twice,' Mr. LaFleur said.
The residence of Jonathan and Diana Toebbe is shown on Sunday in Annapolis, Maryland, a day after it was searched by FBI agents
It wasn't immediately clear whether the Toebbes, who are from Annapolis, Maryland, have lawyers. The Navy declined to comment to the Associated Press on Sunday.
The Toebbe's arrest has already been compared to Jonathan Pollard, a former US intelligence analyst who served 30 years in jail for selling navy secrets to Israel.
He is the only American in US history to receive a life sentence for spying for an ally, and the only one to serve more than 10 years in prison for the crime.
Both, Diana and Jonathan Toebbe are scheduled to appear in a West Virginia federal court on Tuesday.
Emails exchanged between Jonathan Toebbe and FBI agent posing as representative of unidentified country
On December 26, 2020, the FBI initiated the first of several emails to 'ALICE' on ProtonMail. The FBI utilized a ProtonMail account utilizing the pseudo name 'BOB.' The email stated, 'We received your letter. We want to work with you. It has been many months, so we need to know if you are still out there. Please respond to this message, then we will provide instructions on how to proceed.'
On February 10, 2021, 'ALICE' responded and stated, 'Thank you for contacting me. I am still here. The covid disease has made it more difficult to find chances to check this email. Let us discuss how to proceed.'
On February 24, 2021, an FBI agent acting in an undercover capacity ('the UC') responded and stated, 'We understand the delay and hope you are well. Our experts reviewed the information you provided. We would like to sample your [US. Navy Information — Specific Sections].' We have a trusted friend in your country who has a gift for you to compensate for your efforts...
On March 5, 2021, 'ALICE' replied with the following. ' I am uncomfortable with this arrangement. Face to face meetings are very risky for me, as I am sure you understand. I propose exchanging gifts electronically, for mutual safety. I can upload documents to a secure cloud storage account, encrypted with the key I have provided you. You can send me a suitable gift in Monero cryptocurrency to an address I will provide. 100,000 usd should be enough to prove to me that you are not an unwelcome third party looking to make trouble for me. When I have confirmed receipt of your gift, I will provide you with the download link. We are both protected. I understand this is a large request. However, please remember I am risking my life for your benefit and I have taken the first step. Please help me trust you fully.'
On March 18, 2021, the UC posing as a representative of COUNTRY1 wrote, 'We understand a face to face meeting would be uncomfortable. We suggest a neutral drop location. When you visit the location alone, you retrieve a g~fi and leave behind the sample we request. We hope to have a very long friendship that benefits mutually.'
On March 22, 2021, 'ALICE' replied. 'I understand your proposal to start a dead drop. I am concerned that using a dead drop location your friend prepares makes me very vulnerable. If other interested parties are observing the location, I will be unable to detect them. I am not a professional, and do not have a team supporting me. I am also concerned that a physical gift would be very difficult to explain if I am questioned. For now, I must consider the possibility that you are not the person I hope you are. It would be very easy for the serial numbers of bills to be recorded. Tracking devices and other nasty surprises must be considered as well. I propose to mod~ your plan in the following ways:
1. I will place the sample you requested on a memory card and place it in a drop location of my choosing... . I am not a professional and I am sure that publicly available information on this subject is incomplete.
2. The samples will be encrypted using GnuPG symmetric encryption with a randomly generated passphrase.
3. I will tell you the location and how to find the card. I will also give you a Monero address. This form of gift protects both of us very well. I am very aware of the risks of blockchain analysis of BitCoin and other cryptocurrencies, and believe Monero gives both of us excellent deniability.
4. Once I confirm receipt of my gift, I will give you the passphrase.
Your friend and I will never go to the same drop location twice. I will give you a new Monero address each time. The decryption key will be different each time. No patterns for third parties to observe. The only electronic footprints will be Proton to Proton, so there is less risk of encrypted traffic being collected for future analysis by third parties. That part is not perfect. Perhaps as our friendship develops we will change addresses periodically?'
On April 1, 2021, the UC posing as a representative of COUNTRY1 responded to 'ALICE' and stated, 'We understand your concern and appreciate the thoughtful plan... as a sign of good faith and trust we wish to pay you the equivalent of 10,000 USD immediately on Monero to address you provided.
Drop locations are safest and allow us to make exchanges without coming in contact and of course leave no electronic footprint... Your proposed method of memory card with encryption/passphrases is acceptable. For the small sample we requested you will receive another 20,000 USD. Once you confirm Monero address we will activate payment. Our next step will be information on the drop location we have selected. This method will build trust between usfor a larger transaction in future. Our experts are interested in the information you have but we insist on maintaining our discretion and security as a priority.'
On April 9, 2021, 'ALICE' wrote, 'I am sorry to be so stubborn and untrusting, but I can not agree to go to a location of your choosing. I must consider the possibility that l am communicating with an adversary who has intercepted my first message and is attempting to expose me. Would not such an adversary wish me to go to a place of his choosing, knowing that an amateur will be unlikely to detect his surveillance? If you insist on physically delivering the package, then it must be a place of my choosing.
I ask you to consider the viability of an electronic dead drop. I can establish an encrypted online storage account without providing any identifying information and without provoking any suspicion...Another possibility occurs to me: is there some physical signal you can make that proves your identity to me? I could plan to visit Washington D.C. over the Memorial Day weekend. I would just be another tourist in the crowd. Perhaps you could fly a signal flag on your roof? Something easily observable from the street, but nothing to arouse an adversary's suspicion?... '.
On April 23, 2021, the UC posing as a representative of COUNTRY1 emailed the following: 'You do not need to apologize. We appreciate you being careful. That is much better than someone reckless. Your thoughtful plans indicate you are not amateur. This relationship requires mutual comfort. There is risk on both sides and we understand your need for safety assurance of who you are communicating with. As you suggest we can accommodate a signal in Washington D.C. over the Memorial Day weekend. We will set a signal from our main building observable from the street. It will bring you comfort with signals on display from the area inside our property that we control and not a [sic] adversary. If you agree please acknowledge. We will then provide more instruction about the signal. We hope this plan will continue to build the necessary trust and comfort of our identity.'
On May 5, 2021 'ALICE' wrote, 'I will make plans to be in the capitol [sic] over the Memorial Day weekend. It would be best to leave the signal visible for the entire holiday weekend so I can plan to pass by in the natural course of my tourist day. I may be on foot or passing by in a bus or car or bicycle, so please plan for something easy to spot.
On May 17, 2021, the UC posing as a representative of COUNTRY1 responded and said, in part, 'We are happy to set a signal to bring you comfort and build necessary trust between us. The signal will be inside our main building from Saturday morning until Sunday evening Memorial Day weekend.'
During the weekend of May 29-30, 2021, the FBI conducted an operation in the Washington, D.C. area that involved placing a signal at a location associated with COUNTRY1 in an attempted effort to gain bona fides with 'ALICE.'
On May 31, 2021, the FBI received confirmation via the ProtonMail from 'ALICE' that the signal was received. 'ALICE' also wrote that, 'Now Jam comfortably telling you your assumption that Pittsburgh would be a convenient location for me is incorrect.. for now I can tell you I am located near Baltimore, Maryland. Please let me know when you are ready to proceed with our first exchange. Once you have dropped location details for me, I will give you the Monero address and prepare the sample you have requested.' 'ALICE' went on to request clarity of the U.S. Navy information requested by the UC posing as a representative of COUNTRY1.
On June 4, 2021, the UC posing as a representative of COUNTRY1 requested the Monero address to provide 'ALICE' a payment of $10,000 USD as a sign of good faith and trust. The UC also informed 'ALICE' that new communication instructions would be provided at the exchange location.
On June 8, 2021, 'ALICE' wrote that, 'For maximum security it is very important that you do not send Monero to the same address twice.' 'ALICE' then provided the FBI with a payment address. 'ALICE' then went on to state, 'I will place information you have requested~ encrypted, on a memory card along with the address for the second payment you offered in a plain text file. After I confirm the second payment I will provide you with the decryption passphrase using the new communication method. I am also excited to continue our relationship...'
On June 10, 2021, the FBI paid 'ALICE' approximately $10,000 USD in Monero cryptocurrency.
On June 17, 2021, 'ALICE' thanked the FBI for the first payment and stated that he/she was 'eagerly waiting for your instructions.'
On June 18, 2021, the UC posing as a representative of COUNTRY1 emailed 'ALICE' to provide detailed instructions on servicing a dead drop location in Jefferson County, West Virginia to occur on June 26, 2021.
The UC discussed instructions regarding the next payment to 'ALICE' as well as additional assurance that 'ALICE' would be paid $20,000 upon the sample verification and authenticity of the information provided at the drop location.
On June 23, 2021, 'ALICE' sent the FBI a confirmation email stating, 'I understand your instructions and am ready to move forward.'
On June 26, 2021, at approximately 10.41 a.m., the FBI observed Jonathan Toebbe physically service a dead drop location in Jefferson County, West Virginia. Records show that Jonathan Toebbe is a government employee working as a nuclear engineer for the United States Navy and holds an active Top Secret Security Clearance through the United States Department of Defense and an active Q clearance from the United States Department of Energy.
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