The initial package with the "teaser" documents alone would probably be a lot of trouble given the claim that it already had restricted documents.

And probably a bunch of extra violations around military or clearance holder rules, depending on what specifically applies to him. Presumably doing things that make you an extortion target for a foreign power is not well-regarded for such personnel.

And there's always tax fraud.

Tax fraud would only apply if he failed to disclose the income.

Sure, but I'd bet on someone working with sensitive stuff not randomly admitting to getting $30k in Monero they can't really explain a source for.

Monero catching strays here

How do you disclose income from crimes?

You include it on your tax return.

https://www.irs.gov/publications/p17

> Income from illegal activities, such as money from dealing illegal drugs, must be included in your income on Schedule 1 (Form 1040), line 8, or on Schedule C (Form 1040) if from your self-employment activity.

You're theoretically safe from them disclosing this to other law enforcement agencies. (I wouldn't want to test that, though.)

https://money.cnn.com/2013/02/28/news/economy/illegal-income...

> If you tell the IRS you made $1 million from stealing money or dealing drugs, does the agency tip off the cops?

> Legally, it can't, unless a law-enforcement agency gets a court order granting it access to a specific taxpayer's return. The IRS isn't supposed to proactively alert other agencies about misdeeds unless terrorism is involved. In that case, it still needs a court order to disclose anything, but the IRS can initiate the legal process on its own.

To get around this restriction, IRS special agents work on task forces w/DEA, FBI or Homeland Security (aka Customs) so they can request the records directly.

See my comment about the Chicago Outfit in this thread. They figured out the best way if you have a lot of illegal income.

If the IRS asked for records or sources of the income, I would guess you can legally not answer those requests by pleading the 5th. Of course that would be a big red flag...

No, the IRS actually defends people if their tax information is used against them to prevent people from pleading the 5th.

In theory. In actuality I think you could make a reasonable argument that the suspicion of parallel construction means that you may plead the 5th.

Where do dispensaries put their revenue? Selling weed is illegal federally but legal on the state level

IRS is federal isn’t it? Does that mean they would consider weed sales illegal?

> they would consider weed sales illegal?

Weed is illegal under US law. Nothing meaningful about the federal prohibition on weed has changed for decades.

AFAICT all dispensaries are admitting federal crimes when they file federal tax returns. I believe the statute of limitations on controlled substances violations is 5 years, meaning dispensers are theoretically always under threat that the next administration will bring down the hammer and prosecute them for sales occurring today.

The IRS doesn't care if your income is legal or not, they just care if it is reported truthfully and the taxes owed on is are paid.

The Chicago Outfit figured this out after Capone's conviction. What you do is fill out a tax return and pay the tax owed, without a signature, without any form of identification. Failure to file when taxes are paid is a misdemeanor; the maximum penalty, 365 days in jail (minus 55 days for good time=310 days, minus 3 months halfway house). So it's not the end of the world. Failure to file when taxes are owed is a felony and a whole other matter entirely: five years (or is it 10? I don't remember and I'm too lazy to look it up)in federal prison.

You are dreaming if you think a tax return which shows both illegal income and personal identifying information won't be shared with other enforcement agencies. Even the Post Office reports suspicious mail. Ditto FedEx and the "American kilo" (two pounds instead of 2.2). Even Amtrak alerts the DEA of suitcases containing legally-purchased California weed when the train will leave the State.

> How do you disclose income from crimes?

You report the amount as "other income", I believe. You don't have to say that it is from crimes.

I don't do crypto currency and have been wondering whether you are supposed to report it and pay tax on it when you receive it, or only when you sell it. Before you sell it, maybe it is an unrealized gain, which is currently not taxed.

It is an unrealized gain if you bought it and it appreciates. If you receive it in exchange for services, it is income. This is the same for non-crypto:

1. You buy an artwork by a famous artist for $10k and it appreciates to $20k. This is an unrealized gain and you are not taxed until you sell it. Note that trading one crypto for another is effectively a sale of the first crypto and a purchase of the second, such that you pay gain depending on the value of the second crypto at the time of the trade.

2. Someone gives you a $10k artwork as partial payment for some work you do, eg web design. This is income and taxed as if they paid you $10k. Mining crypto is also income I believe.

3. Someone gifts you an artwork worth $10k. You don’t pay tax.

Etc.

I would think the best way to characterize this transaction is that it is income, although it’s certainly unusual enough that I won’t say I’m certain.

Not tax advice / speak to your own accountant.

In point 1, why does trading of crypto incur a taxable event? If I buy a Picasso for $20 million and then later trade it to a friend for a Van Gogh which is worth $40 million, is that taxable?

Yes it most certainly is.

In this scenario, what is the taxable base ?

You would need a valuation for the painting you disposed of. The fact that you never actually received USD is irrelevant.

I had this problem in 2018 - I bought BTC in 2017 before the boom, exchanged a bunch for ETH at the peak of 2018, and then rode the ETH all the way back down. I had to pay a bunch of taxes on the BTC gains I “realised” even though I didn’t get any actual cash out. I had to pick a price settle for BTC/USD on the day I bought ETH.

Same in French law if you move a company abroad: You need a valuation on the day of departure, and are taxed on it, even if you don’t realize the gains.

If you receive it as income then it's taxable at that point at $ value. If you later sell or trade it you realize capital gains (or losses) and that is a further taxable event.

If he doesnt give them data, there is no crime?

42 U.S.C. § 2274(a) Attempting or conspiring to do so is enough (IANAL).

https://www.law.cornell.edu/uscode/text/42/2274

Or declare crypto accounts on the new 2020 1040.

He allegedly initiated the whole thing, which is presumably a crime on its own.

He allegedly sent a package to a foreign government offering to sell them classified info, and the foreign government gave that package to the FBI.

EDIT: Also the initial package contained classified info, which doesn't help.

Suppose I tell you - give me $50,000 and I will assassinate the president. If i never had intention of doing so, and just meant to keep the money, i dont know what crime this would be.

If you wanted to sue me foe fraud, you would be admitting to hiring an assasin

This is called conspiracy. [1] How intentional, motivated, and opportunistic you were, and what actions you actually undertook all add up to the offense you committed.

A random person saying they'll assassinate the president probably won't be a serious threat, but if you have military clearance, access to secrets, show intent to trade those secrets, and initiate communications with foreign powers then that's more than enough to prosecute. Saying you were "just joking" to scam some money isn't much of a defense.

https://en.wikipedia.org/wiki/Conspiracy_(criminal)

Well, if anyone desired they could arrest you both for conspiracy, since ‘I was just joking’ is a pretty hard defense to prove. If you had a bunch of documents showing you were actually not intending to do it and just scamming, and they were all solidly timestamped maybe. If you had an independent co-conspirator who could attest, also maybe.

I believe that generally folks don’t do this type of thing often because the type of person that would pay you $50k in this situation might also be very prone to just murder you if they thought you were playing with them hah

Either way, no fun for anyone.

Except for narcotics conspiracies (Title 21), plain old Title 18 conspiracies require an act "in furtherance" of the conspiracy by ONE of the conspirators. Buying a map of the area around the bank your team plans to rob is sufficient.

(A drug conspiracy requires no "act in furtherance.")

So if you are "just joking" with your team and one of them takes your joke seriously and purchases bank robbery supplies or puts an SD card into a sandwich you are liable.

Wouldn’t receiving payment count?

"If you had a bunch of documents showing you were actually not intending to do it and just scamming, and they were all solidly timestamped maybe."

I think the most solid proof thats its not a geuine conspiracy would be

A) if you lied to the person giving you the money, about owning a gun or something else relevant, showing your intentions weren't genuine

B) showing the conspiracy is not credible, i.e. you are conspiring ro use a sniper rifle but you don't k ow how to shoot.

A transaction where you lied about your side of the deal is still fraud, and yes that can still be charged by the state independently.

Also conspiracy doesn't require you to be proficient at executing your plan but rather the intention and motivation and opportunity to do so. You can still shoot a gun and cause harm even if you don't know how to shoot, and there's no way to really prove you don't either.

This is why it is so hard to catch arsonists. You pay in advance and if they don't torch the building, a conviction is very difficult.

Well if they don't torch any buildings, they're not arsonists. They might be guilty of conspiracy or fraud or something though.

This would be illegal. You have credibly expressed an intention to murder someone. However, if during your trial you could somehow prove that you had planned not to actually harm anyone, that would certainly reduce the severity of the crime.

Expressing a credible threat of violence is a crime in most countries, I believe.

"credibly expressed an intention"

'Credible' is a key word though, a random joe who doesn't own a gun is not credible to assasinate a President.

If you are the FBI, like in this case, admitting your part would not be much of a hurdle - unless you crossed over into entrapment territory, and even then the agent wouldn't go to prison for entrapment.

> Suppose I tell you - give me $50,000 and I will assassinate the president.

There is a specific law for exactly that, however, making threats against the president. And those threats do not actually have to be communicated to the president in order for them to be illegal.

I don't know how things works in USA, but it definitely a fraud i.e. in Russia.

Not an expert, but I think different rules apply to holders of security clearances.

It's all in good faith, and you can't trust criminals because, well, criminals lol.

That said, on the other hand, if someone wants repeat business they will do what you pay them for. It's why ransomware works - if a ransomware guy doesn't unlock things after being paid, nobody will pay ransomware guys.

TL;DR like most business, it's based on trust.

Anyway, anyone want to buy some secret documents? Just send me 50K worth of bitcoin, you can trust me.

If they turned him over to the FBI, I think it's safe to say that whatever government he contacted already had those documents.

Only $30k for secret military information? The couple were really desperate.

He split the data into 50 packets. He was asking for $100k per packet, or $5mil. They nabbed him after the first packet.

Where are you getting this information?

It's in the DoJ PDF - https://www.justice.gov/opa/press-release/file/1440946/downl...

Thanks!

At an old job we used to get regular talks given by the FBI about espionage cases. A common theme was just how cheaply most sell themselves for. Motivations tend to be as much titillation (playing spy) and revenge (passed over for promotion, for example) as it is for pure money.

Or just political beliefs/idealism. Some people thought for instance that being the sole possessor of atomic weapons was too much power for any country, even the US. I believe I read something that gave the impression that certain secrets were given to the Soviets, not for money, out of narcissism, or love of Communism, but just the belief that a balance of power was better for the world.

Huh. That kind of makes sense. The thought of a single country being able to nuke anyone it disagrees with basically without consequence is pretty terrifying.

Or, as the saying goes "absolute power corrupts absolutely".

It kinda makes sense, because MAD has kept people from nuking freely. But there were a few close calls.

That said, if e.g. only the US had nukes after WW2, they would be the world's dictator. I mean they already are very influential everywhere, but they don't have absolute power at least. Still wouldn't want to be at war with them though.

"the earlier development of the Soviet bomb may have had one significant benefit to the world, a balance of power; the author is convinced that this prevented the United States from using their bomb on North Korea"

The other side of the coin was the Rosenbergs were blamed for casualties in the Korean war.

Please share where if you recall.

IIRC it was indicated as the motivation behind convicted spy Christopher John Boyce in the movie The Falcon and the Snowman.

https://en.wikipedia.org/wiki/The_Falcon_and_the_Snowman

Well, this is who I was thinking of. Apparently the motivation is disputed though.

https://en.wikipedia.org/wiki/Klaus_Fuchs

"In her 2020 book, Atomic Spy: The Dark Lives of Klaus Fuchs, Nancy Thorndike Greenspan concluded that "Fuchs sought 'the betterment of mankind' [when sharing secrets with the Soviets] ... because "his goal became to balance world power and to prevent nuclear blackmail" according to a New York Times review by the conservative historian Ronald Radosh. Radosh wrote that "this was a post facto justification. The reason Fuchs spied was simply that he was a Communist and a true believer in Stalin and the Soviet Union"."

not surprising, politicians hand out million dollar contracts for pennies on the dollar

Not reporting a 30k lump sum from a foreign agency, or even from a domestic one, would alone be enough for them to loose their security clearances. Then there is failure to report communications with a foreign agency. Once they travel to hand over physical object, even if blank, then there is probably enough for a conspiracy charge.

That concept would make for excellent espionage comedy story bait.

It’s pretty close to the plot of “Burn After Reading.”

Two people have access to (what they believe to be) state secrets and try to sell them to a foreign government, but are unknowingly dealing with a US agent the whole time

I just watched it recently and I made similar connection. I naturally hope the connection is in my head only. Plus, in this case, it would appear the couple was already a part of IC. Does someone remember of the top of their head percent of US population engaged in it? Past 10% leaks like that are practically guaranteed.

10 Ways To Lose Your Freedom

I don’t think it would be “legal trouble” he would have to worry about if he lied to and stole from foreign agents attempting to buy state secrets.

I am sure there would be some rules saying you have to tell the FBI or some other dept if you get contact from someone who wants these secrets.

His chain of command and the OSI (military equivalent of the FBI)

NCIS is the equivalent here, not AF OSI.

The initial package probably violated the law by itself.

If he didn't transmit sensitive information, I don't see how he could be convicted of doing so. Maybe some other lesser charge of some kind? (The idea of prosecuting such a person for fraud is hilarious but seems unlikely).

I'm sure he wouldn't have a security clearance ever again.

Attempt is a crime. So is conspiracy. His wife was in on it.

But there are two questions: how did the FBI find out about it? Was Toebbe targeted by an informant?

Secondly, which country was he offering the secrets to? This makes a big difference. "Enemy" or ally? Maybe he felt sorry for the way France was effed over by AUKUS and wanted to make amends.

Looks like there was no informant. He contacted the French Embassy on his own and after that, the French government cooperated with the FBI.

Prediction: he'll take a plea. In mitigation, France is an ally. Aggravation: these are nuclear secrets. France will not come to his aid, as Israel did for Pollard for many years, unsuccessfully. Fortunately, there was no real harm. 20 years unless he gets a particularly harsh judge. Worst case: 40.

If he's willing to sell the information to France, France would rightly be concerned that he'd be willing to also sell the information to countries France isn't friendly with.

Even if France didn't care about the information being shared elsewhere, they would still likely care about potentially breaching the classified information treaty they signed with the USA back in 1977[1]. When France received the information, they may have assumed it was a test from the USA to see if France was still upholding their treaty obligations to report unauthorised distribution of US classified information?

[1] https://treaties.un.org/doc/Publication/UNTS/Volume%201114/v...

> This makes a big difference. "Enemy" or ally?

Makes a big difference to what, are you suggesting?

In the law? How does Russia vs France make a difference? we have declared war against neither. Sharing national security secrets with either is a crime in fact.

How it looks in the news and to the social media mob? Sure.

Don't you need standing in order to bring fraud charges? If so, you would have to be admitting that you solicited someone for government secrets, which is very illegal.

The state always has standing to prosecute crimes, regardless of whether the victim wants them to or not.

I mean, I guess it's not illegal if you were the FBI, which is what happened here? But yes, it seems a stretch.

This sounds increasingly like a Coen brothers movie though, yeah.

The complaint was filed by FBI Special Agent Justin Van Tromp. That definitely sounds like a character in a Coen brothers movie.

Something I've always wondered is, why are they all special agents? Is there some place they put all the ordinary agents? Are they the ones that just spend their whole careers in cubicles?

> Something I've always wondered is, why are they all special agents?

Because that's the job title?

> Is there some place they put all the ordinary agents?

Training. That is, the lowest rank on the FBI agent career path is apparently “New Agent Trainee” and the next step up is “Special Agent”.

FBI, DEA, ATF, Secret Service: they are all "special agents."

Ok, moving on...you know what the French call (or called) their nuclear deterrent? "Force de Frappe"!

In Lake Wobegon FBI, all the agents are special.

They'd probably nab him for bullshit and then make him waste at least 30k defending himself in court. Three letter agencies didn't get their reputation for being vengeful jerks from nowhere.

There's nothing vengeful in bringing a mole to justice.

You're not wrong but just going by TLA press releases it's pretty impossible to tell genuine moles from people getting railroaded because the TLAs are allergic to being wrong.

What about getting assasinated? Surely that’s a motivation to deliver?

I'm pretty sure that fits the definition of fraud.

they couldn't be charged for fraud. illegal activities don't get legal protection. this is why you can't e.g. sue your drug dealer for breach of contract because he didn't deliver those kilos of cocaine he promised.

they could get them on tax evasion, though, assuming they didn't report their ill-gotten gains (which you can do without incriminating yourself, amazingly.)

In CA at least there are legal penalties for selling fake illegal drugs so some illegal activities get legal protection.

https://codes.findlaw.com/ca/health-and-safety-code/hsc-sect...

I don't think that protects the buyers of the fake illegal drugs, it just allows prosecutors to charge dealers of fake illegal drugs as if they were the real deal.

Under the Analog Act, fake drugs are considered as illegal as what they're represented to be (even if it's just baby powder.) I assume CA's law is the state counterpart of that Federal statute.

Most American States have laws against selling ersatz narcotics.

Generally just the notion of doing this qualifies as a conspiracy against the United States. It’s one of the core statutes that Federal Prosecutors abuse to ensnare defendants.

Then it's mail and wire fraud.

I mean, if it hadn't been a honeypot, he might have got killed for pulling a stunt like that.

I’d imagine foreign governments have more clever ways of getting info, like paying our research university professors to just go work for them.

They plant grad students on their research teams.

Exactly.

all key research is open and googleable. There is no need to do that.

No it isn't. Many schools do DARPA work on their own or in partnership with commercial operations. These frequently involve data with restricted access (not classified but still sensitive) and there are active espionage efforts to retrieve that information by taking advantage of lax academic security.

I’m not sure what secret information the US thinks it has about nuclear science that you can’t just buy from Russia, India or China if you are a nation state.

Though maybe not for $30,000, so if anything this article is more of an advertisement than a warning to others, isn’t it? Though often these kind of information spreads are more about public agencies showing the politicians that they aren’t a waste of money. Because what if that hadn’t been a honey pot, but ISIS or whatever!!! Best keep spending those surveillance billions.

Or pair them off with someone who will pass everything up to the mothership.

If he is dealing with a government agent and receiving money then he has to report it at his work.

Even if he 'knows' it's an undercover US department.

So, they would and should still throw the book at him.

He'd be secretly dealing in 'data', fake or not, and money related to his classified job. Not hard to see that's very illegal. He would be leaking info as well just talking to them. They might collate speech structure that links him to other non classified/leaked projects. Or know where he lives or work hours.

> If he is dealing with a government agent and receiving money then he has to report it at his work.

Has to, or get fired, and probably never have a security clearance again. But is it a criminal matter? No idea. (This hypothetical is probably not the most important part of this story, obviously, but it does seem to have captured our interest)

Lets take his job out of it- suppose it was all a lie, and he actually works as a cleaner? I cannot aee what law he wouod be breaking

I’m no lawyer but I do recall an episode of Cops waaaay back where a guy got busted for selling “weed” except it was actually oregano. He still got charged with something. But I can’t remember what.

All American States punish the sale of ersatz narcotics, under special statutes.

That makes sense. I was sort of thinking there’s likely something similar with regard to selling national secrets.

Thanks for pointing this out, i didnt know that, and it's really weired.

Did he end up doing hard thyme?

Don't know, but perhaps he was trying to fennel money?

I think it all stems from a misunderstanding between buyer and seller.

Mail fraud. Wire fraud. Attempt. Conspiracy.

Are they actually applicable?

Conspiracy requires intent, which has to be proven beyond reasonable doubt. Good luck convincing a jury that cleaner had intent to sell gov. secrets, and it wasnt a joke.

Fraud, entering into a contract without intent to fullfill it? I don't think it works if the obligations would be illegal