Monday, February 24, 2020

Former JBLM soldier sentenced to 15 years in prison for production of child pornography

Sentence to run concurrent with ten-year term imposed by U.S. Army

Tacoma, Washington – A former U.S. Army Chief Warrant Officer at Joint Base Lewis-McChord was sentenced today in U.S. District Court in Tacoma to 15 years in prison for production of child pornography, announced U.S. Attorney Brian T. Moran.  JOHN F. RINDT, 50, was previously sentenced to ten years in prison by a military tribunal for the same conduct.  U.S. District Judge Robert J. Bryan ordered the 15-year sentence to run concurrent to the military prison term.

According to records filed in the case, in 2012, while living in Lacey, Washington, RINDT made a video of himself molesting a sleeping child who was under the age of 12.  As part of his sentence, RINDT is required to pay $9,900 in restitution for counseling for the young child.

Following his release from prison, RINDT will be on lifetime supervised release and will be required to register as a sex offender.

The case was investigated by the FBI and U.S. Army Criminal Investigation Division (CID).

The case was prosecuted by Assistant United States Attorney Grady Leupold.

Saturday, February 22, 2020

Former DIA Employee Pleads Guilty to Leaking Classified National Defense Information to Journalists

An employee of the Defense Intelligence Agency (DIA) pleaded guilty today to charges related to his disclosure of classified national defense information (NDI) to two journalists in 2018 and 2019.

“Frese violated the trust placed in him by the American people when he disclosed sensitive national security information for personal gain,” said Assistant Attorney General for National Security John C. Demers. “He alerted our country’s adversaries to sensitive national defense information, putting the nation’s security at risk.  The government takes these breaches seriously and will use all the resources at our disposal to apprehend and prosecute those who jeopardize the safety of this country and its citizens.”

“Henry Kyle Frese was entrusted with Top Secret information related to the national defense of our country,” said G. Zachary Terwilliger, U.S. Attorney for the Eastern District of Virginia. “Frese violated that trust, the oath he swore to uphold, and engaged in felonious conduct at the expense of our country. This case should serve as a clear reminder to all of those similarly entrusted with National Defense Information that unilaterally disclosing such information for personal gain, or that of others, is not selfless or heroic, it is criminal.”

“Mr. Frese violated his sworn oath to protect the American people and uphold the Constitution of the United States by using his access to the United States’ most sensitive information and steal state secrets for nothing more than personal gain,” said Robert Wells, Acting Assistant Director of the FBI's Counterintelligence Division. “The men and women of the FBI who investigated this case swore the same oath but unlike Mr. Frese, they chose to uphold it. I am proud of the work they did to hold Mr. Frese accountable for his actions.”

"By disseminating the same classified information he had pledged to protect, Henry Kyle Frese put the US and our national defense equities in danger," said Timothy R. Slater, Assistant Director in Charge of the FBI's Washington Field Office.  "The US Government and the American public depend on trusted government employees to keep such information out of the hands of our adversaries, who could use it to cause us harm.  The FBI's counterintelligence mission is to protect our country's information and secrets in order to safeguard our future; and the men and women of the FBI will continue to work hard to preserve that information."

According to court documents, Henry Kyle Frese, 31, of Alexandria, was employed by DIA as a counterterrorism analyst from February 2018 to October 2019, and held a Top Secret//Sensitive Compartmented Information security clearance. United States government agencies have confirmed that in the spring and summer of 2018, News Outlet 1 published eight articles, all authored by the same journalist (Journalist 1) that contained classified NDI that related to the capabilities of certain foreign countries’ weapons systems. These articles contained classified intelligence from five intelligence reports (the Compromised Intelligence Reports) made available to appropriately cleared recipients in the first half of 2018. The topic of all of these initial five Compromised Intelligence Reports – foreign countries’ weapons systems – was outside the scope of Frese’s job duties as an analyst covering CT topics. The media articles, and the intelligence reporting from which they were derived, both contained information that is classified up to the TS//SCI level, indicating that its unauthorized disclosure could reasonably be expected to result in exceptionally grave damage to the national security. The intelligence reporting was marked as such.

According to court documents, Frese and Journalist 1 lived together at the same residential address from January 2018 to November 2018. Throughout 2018 and 2019, Frese and Journalist 1 “followed” each other on Twitter, and on at least two occasions Frese re-Tweeted Journalist 1’s Tweets announcing the publications of articles containing NDI classified at the Top Secret level.

In or about April of 2018, Journalist 1 introduced Frese to a second journalist (Journalist 2).  Subsequently, Frese began texting and speaking with Journalist 2 by telephone. Between mid-2018 and late September 2019, Frese orally transmitted NDI classified at the Top Secret level to Journalist 1 on 12 separate occasions, and orally transmitted NDI classified at the Secret level to Journalist 1 on at least four occasions. Frese knew the information was classified at the Secret and Top Secret levels because the intelligence products from which he had learned the classified information had visible classification markings as to the classification level of the information, and the intelligence products accessed by Frese were stored on secure, classified government information systems.

In relation to one of the 12 times Frese orally transmitted Top Secret NDI to Journalist 1, in or about mid-April to early May 2018, Frese accessed an intelligence report unrelated to his job duties on multiple occasions, which contained NDI classified at the Top Secret//SCI level (Intelligence Report l). A week after Frese accessed Intelligence Report 1 for the second time, Frese received an April 27, 2018 Twitter Direct Message (DM) from Journalist 1 asking whether Frese would be willing to speak with Journalist 2. Frese stated that he was “down” to help Journalist 2 if it helped Journalist 1 “progress.” During the same April 27, 2018, Twitter exchange, Journalist 1 indicated that a certain United States military official told Journalist 2 that the official was not aware of the subject matter discussed in Intelligence Report 1. Frese characterized the official’s denial as “weird” and commented on the source of information contained within Intelligence Report 1.

Several days after the April 27, 2018, Twitter exchange, Frese searched on a classified United States government computer system for terms related to the topics contained in Intelligence Report 1. A few hours after searching for terms related to the topic of Intelligence Report l, Frese spoke by telephone with Journalist 1, and several hours later he spoke by telephone with Journalist 2.  Immediately after the call with Journalist 2, Journalist 1 called Frese. During at least one of the calls with Journalist 1 and Journalist 2, Frese orally passed Top Secret NDI derived from Intelligence Report 1. Approximately 30 minutes after Frese spoke with the two journalists, Journalist 1 published an article (Article 1) which contained Top Secret NDI, orally communicated by Frese and derived from Intelligence Report 1 classified at the Top Secret//SCI level.

On at least 30 separate occasions in 2018, Frese conducted searches on classified government systems for information regarding the classified topics he discussed with Journalists 1 and 2. On multiple occasions in 2018 and 2019, Frese conducted searches on classified government systems because of specific requests for information from Journalists 1 and 2.

Additionally, between early 2018 and October 2019, Frese communicated with an employee of an overseas CT consulting group (Consultant 1) via social media. On at least two occasions, Frese transmitted classified NDI related to CT topics to Consultant 1, using a social media site’s direct messaging feature.

Frese pleaded guilty to the willful transmission of Top Secret national defense information, and faces a maximum penalty of 10 years in prison when sentenced on June 18, 2020, at 9:30 am. Actual sentences for federal crimes are typically less than the maximum penalties. A federal district court judge will determine any sentence after taking into account the U.S. Sentencing Guidelines and other statutory factors.

Assistant U.S. Attorneys Neil Hammerstrom and Danya E. Atiyeh, and Trial Attorney Jennifer Kennedy Gellie of the National Security Division’s Counterintelligence and Export Control Section are prosecuting the case.

Sunday, February 09, 2020

Former Employee of Walter Reed National Military Medical Center Facing Federal Indictment in Maryland

Allegedly Failed to Report Financial Benefits He Received from Individuals and Companies Doing Business with Walter Reed

Greenbelt, Maryland – A federal grand jury has indicted David Laufer, age 63, of Pittsburgh, Pennsylvania, formerly of Bethesda, Maryland, on five counts of the federal charge of making false statements.  The indictment was returned on December 16, 2019, and was unsealed upon his arrest on January 28, 2020.  Laufer had his initial appearance yesterday in U.S. District Court in Greenbelt and was released pending trial.

The indictment was announced by United States Attorney for the District of Maryland Robert K. Hur; Special Agent in Charge Robert E. Craig, Jr. of the Defense Criminal Investigative Service - Mid-Atlantic Field Office; and Special Agent in Charge Maureen Dixon, Office of Investigations, Office of Inspector General of the Department of Health and Human Services.

According to the indictment, until May 2019, Laufer worked as the Chief of the Prosthetics and Orthotics Department at Walter Reed National Military Medical Center, the largest joint military medical center in the United States.  Walter Reed is located in Bethesda and provides medical services, including orthotic and prosthetic services to U.S. service members and their dependents, including wounded soldiers.  Laufer’s job required him to complete annual Confidential Financial Disclosure forms which required him to report: all sources of outside income greater than $200; any business outside the U.S. Government in which Laufer or his spouse was an employee or consultant, whether or not compensated; any agreements or arrangements concerning past, current, and future employment; and travel-related reimbursement or other gifts totaling more than $350 from any one source during the reporting period.

The indictment alleges that Laufer failed to report financial benefits he received from Person B and Company B, located in Germantown, Maryland and owned, operated, and controlled by Person B.  Company B provided prosthetics and orthotics materials to Walter Reed in return for payments from the government.  According to the indictment, Person B regularly interacted with Laufer about Company B’s business with Walter Reed.  Further, the indictment alleges that Laufer falsely told federal agents that he had never received money, gifts, or sporting event tickets from any vendor doing business before the Prosthetics and Orthotics Department when in fact Laufer had received financial benefits, including travel and sporting event tickets, from Person B and Company B.

In a related case that was recently unsealed, Timothy Hamilton, age 58, of Columbia, Maryland, and an employee in the Walter Reed Prosthetics and Orthotics Department from 1991 to 2017, pleaded guilty to conspiracy to commit health care fraud and to acts affecting a financial interest.  Hamilton admitted that beginning in 2009, he allowed Person A to use his Orthotist certification for Person A’s business, Company A.  Hamilton was aware that Company A used his certification to obtain national accreditation and as part of its documentation for Medicare credentialing, which allowed Company A to bill insurers for medical treatment that required the involvement of a certified Orthotist, even though Hamilton was not providing those services in the vast majority of cases.  Hamilton admitted that he received monthly financial payments from Company A from 2009 until October 2015, totaling more than $45,000.  From 2011 to 2015, Company A used Hamilton’s credentials to submit more than 225 fraudulent insurance claims of more than $150,000.

Further, Hamilton admitted receiving more than $15,000 in gift cards, checks, and other benefits such as tickets and lodging, from Company B, which was run by Person B and which had business with Walter Reed’s Prosthetic and Orthotics Department.  During the time that Hamilton was receiving payments from Company A and Company B, Hamilton ordered products on behalf of Walter Reed from both companies.

Hamilton faces a maximum penalty of 10 years in prison for conspiracy to commit health care fraud and a maximum of one year in prison for acts affecting a financial interest.  Hamilton is awaiting sentencing.

If convicted, Laufer faces a maximum sentence of five years in prison for each of the five counts of making a false statement.  Actual sentences for federal crimes are typically less than the maximum penalties. A federal district court judge will determine any sentence after taking into account the U.S. Sentencing Guidelines and other statutory factors.

An indictment is not a finding of guilt.  An individual charged by indictment is presumed innocent unless and until proven guilty at some later criminal proceedings.

United States Attorney Robert K. Hur commended the DCIS and HHS OIG for their work in the investigation and thanked the FBI, the Veterans Administration Office of Inspector General, the Army CID Major Procurement Fraud Unit, and the Office of Personnel Management Office of Inspector General for their assistance.  Mr. Hur thanked Assistant U.S. Attorneys Harry M. Gruber and Dana Brusca, who are prosecuting these cases.