NEWS AND ANALYSIS:
The FBI sting operation that ensnared an Annapolis U.S. Navy engineer and his wife in a conspiracy to sell nuclear submarine secrets involved an unidentified foreign nation that could be China, The Washington Times has learned.
Jonathan Toebbe and his wife Diana Toebbe were arrested Oct. 9 on charges of conspiracy to sell restricted nuclear data to a foreign nation whose identity was kept secret throughout the prosecution.
But while prosecutors still won’t say what country was involved, details of the case and court records suggest the foreign nation identified in court papers as “Country 1” could be China.
Jonathan Toebbe, a civilian nuclear engineer assigned to the Naval Nuclear Propulsion Program, known as Naval Reactors, pleaded guilty on Monday. On Friday, his wife Diana Toebbe, a schoolteacher, pleaded guilty to conspiracy charges as well. A Justice Department spokesman had no comment for the record as to whether China is the “Country 1” that the couple approached to sell documents on the secret information.
If China was the country that the Toebbes reached out to regarding U.S. nuclear submarine secrets. it would be among the hundreds of FBI investigations involving Chinese spying and technology theft.
“The Chinese government steals staggering volumes of information and causes deep, job-destroying damage across a wide range of industries—so much so that … we’re constantly opening new cases to counter their intelligence operations, about every 12 hours or so,” FBI Director Christopher Wray said earlier this month.
According to a criminal complaint in the case, an FBI legal attache in an undisclosed foreign country obtained an April 2020 letter and documents with a spying offer that would later be traced to Jonathan Toebbe.
“I apologize for this poor translation into your language,” the letter stated. “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.”
The FBI affidavit laying out the case provides the sole public clue linking China to the case. The FBI agent who signed the affidavit was Jason Van Tromp, with the bureau’s Pittsburgh office, who has won awards for his work on Chinese counterintelligence cases.
Mr. Van Tromp along with two other federal agents received the Justice Department award in 2020 for work on two successful prosecutions of China-related criminal cases. The cases involved West Virginia university professors Qingyun Sun and James Patrick Lewis.
Both academics pleaded guilty in cases traced to China’s Thousand Talents Program, a Beijing government program that critics say was used to recruit American university professors to obtain advanced technology and other know-how for China’s military-civilian development. FBI counterintelligence agents traditionally remain tasked with working cases in their geographical area of expertise.
The signs are not all clearly pointing to Beijing, however. Evidence that China may not have been the target of the espionage offer includes the fact that instead of accepting the proffered nuclear submarine secrets, representatives of “Country 1” instead gave Mr. Toebbe’s letter to the FBI in that country, something the Chinese intelligence service would be unlikely to do.
Only six nations operate nuclear submarines: the United States, Russia, Britain, France, China and India. Australia is expected to acquire nuclear submarines in a recent deal with the United States and Britain.
Another possible clue as to the identity of the country involved in the operation was Mr. Toebbe’s response to an FBI undercover agent posing as an agent of Country 1. The naval engineer at one point in his communications said he would look forward to one day having a glass of wine with his foreign agent, suggesting France may be the country.
The sting operation also involved the FBI placing a signal on the facility of the foreign nation, suggesting it was a friendly power cooperating with the FBI.
The case had many trappings of an espionage novel. After the letter was obtained by the FBI in December 2020, an extensive counterintelligence sting operation involving encrypted email exchanges, dead drops involving an SD memory card with secrets hidden in a sandwich, covert encrypted communications exchanges, a message displayed on a foreign nation’s building in Washington and the transfers of funds using untraceable cryptocurrency.
According to the FBI affidavit, the most detailed explanation of fact in the case, Mr. Toebbe’s letter to the foreign nation was pivotal.
“On or about December 20, 2020, the FBI’s attache in Country 1 obtained a package representatives from Country 1 had received in April 2020 through a mail carrier from the U.S. by an unidentified subject in an attempt to establish a covert relationship,” states the 23-page criminal complaint from Mr. Van Tromp. “The package contained U.S. Navy documents, a letter containing instructions, and an SD card containing specific instructions on how Country 1 should respond using an encrypted communication platform, and additional documents.”
The package was described as a brown envelope with four U.S. postage stamps and a postal bar code with a return address in Pittsburgh.
As to why the foreign intelligence did not pursue the spying officer, analysts say the foreign nation may have not needed the submarine secrets or may have considered the offer part of a counterintelligence “dangle” operation. Court papers in the case identified the reactor technology as linked to the Virginia-class attack submarine.
Virginia-class fast-attack submarines are among the Navy’s most powerful nuclear-powered underwater vessels and can fire both torpedoes and missiles. The submarines would play a major role in any conflict with China.
The sub is powered by the SG9 nuclear reactor, a ninth-generation power plant built by General Electric. GE has been a frequent target in recent years of Chinese economic espionage and trade secrets theft.
The FBI and CIA both employ what are called “dangles” — controlled agents that pose as people offering to spy for other nations as a way to gain intelligence or to conduct disinformation operations.
Whatever the reason, the initial package obtained by the FBI contained “confidential” Navy secrets with promises of more detailed information if a clandestine relationship could be set up, the affidavit states.
To lure Mr. Toebbe into a covert relationship, the FBI sting operation turned to the use of encrypted emails to communicate after the engineer rejected as too risky a request to meet in-person with an agent posing as a foreign intelligence officer.
“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 instruction on how to proceed,” the FBI, posing as a Chinese agent, said.
Mr. Toebbe replied in February 2021 and blamed COVID-19 pandemic restrictions for his delayed response.
Next, the FBI asked for specific nuclear propulsion information that could be provided to their undercover agent in the United States.
Mr. Toebbe again balked at a face-to-face meeting and instead asked for $10,000 in Manero cryptocurrency, a digital currency with privacy features that make it popular for illicit transactions. Manero describes its crypto currency on its website as “secure, private untraceable.”
Mr. Toebbe later received $20,000 and $70,000 in cryptocurrency in exchange for supplying Navy submarine reactor secrets.
Two of the dead drops involved the engineer placing SD cards containing encrypted nuclear secrets inside a half of a peanut butter sandwich, and in a piece of chewing gum. Toebbe later emailed decryption keys to hsi supposed handler after he received cryptocurrency payments.
At another point in the sting operation, the FBI managed to plant a meeting signal over the Memorial Day weekend from a building operated by the foreign government that would be seen from the street by Mr. Toebbe.
“It will bring you comfort with signal on display from area inside our property that we control and not a [sic] adversary,” the complaint quotes the FBI posing as a Chinese agent as saying. “If you agree please acknowledge. We will then provide more instruction about the signal. We hope this plan will continue to build necessary trust and comfort of our identity.”
The FBI from May 29 to May 30, 2021 “conducted an operation in the Washington, D.C. area that involved placing a signal at a location associated with Country 1 in an attempted effort to gain bona fides with ‘ALICE,’” the complaint said. “Alice” was Mr. Toebbe’s code name in communications.
During pre-trial document exchanges, Jonathan Toebbe denied his wife was involved in the case. Prosecutors, however, countered that Mrs. Toebbe knew about the spying and “acted as a lookout” for Toebbe during a drop off of secrets at one dead drop.
A lawyer for Toebbe did not respond to a request for comment. Diana Toebbe’s lawyer declined to comment until after sentencing.
Mr. Toebbe’s plea agreement calls for him to receive a prison term of between 12 and 17 1/2 years. Diana Toebbe could receive a sentence of up to three years in prison.
The couple pleaded guilty to conspiracy to communicate restricted data to a foreign power. The maximum penalty for the charge is life in prison.