A former CIA officer was arrested for allegedly stealing $40 million worth of gold bars by creating a fake spy program to dupe government defense contractors into funding the operation, according to a report Friday by The Washington Post.
David Rush was arrested last month after authorities found 303 gold bars in his house that he obtained by allegedly creating what is called a "black box" spy program, which is a "highly classified intelligence program ... for the most secret intelligence operations," people familiar with the investigation told the Post.
The report said that Rush used the sham spy program as a "conduit to funnel millions of dollars for his personal use," and enlisted two colleagues to help him carry out the fake operation, "effectively cultivating them as perhaps unwitting accomplices and preventing them from talking to others about it."
"He persuaded one of them to transfer millions of dollars to the program via a government contract that was also fraudulent," sources told the Post. "He made up a contract."
Rush, who worked in the CIA’s Directorate of Science and Technology, was charged with one count of theft of public money in the government criminal probe. He has not pleaded to the charges, and at a detention hearing in a federal court Friday in the US state of Virginia, a judge ruled that Rush will remain in jail until his next hearing, as he poses a significant flight risk.
In the wake of Rush's arrest, the CIA has put several agency officials on leave as FBI and spy agency investigations continue into the fake scheme, according to NBC News.
Rush's ability to come up with such a large-scale fraudulent program under the guise of the CIA has insiders questioning the vetting of people working within the agency, according to the Post. The bombshell revelation of the "black box" scheme has left officials with more questions than answers, including "how Rush could single-handedly create a 'black box' for a fictional spy program without sign-off from his superiors." Investigators are also looking into whether the two colleagues Rush brought into the fake program knew that it was fraudulent.
Sources familiar with the probe told the Post that the fake program involved "continuity of government" operations, or programs to keep the federal government running in the event of nuclear war, natural disasters or other catastrophes.
"Rush apparently used the fake government continuity program and the contract to persuade a government defense contractor to purchase large amounts of gold," said one source.
Rush was arrested May 18 after the FBI raided his house and agents seized 303 gold bars worth roughly $40 million, $2 million in cash and 35 luxury watches, according to a government affidavit.
At Friday's hearing, Assistant US Attorney Gavin Tisdale told the judge that Rush was a "master manipulator" who "lied to colleagues" about basic facts of his pedigree and "lied to neighbors" about working as a Navy pilot, which he also lied about to the CIA when obtaining his position in the agency.
US Rep. Jim Himes, the top Democrat on the House Intelligence Committee, was incensed after learning about Rush's arrest.
"This is just staggering," Himes said in a statement. "Keeping gold bars and wads of cash in your house is not exactly top-notch tradecraft. From an oversight standpoint, how the hell did this happen?"
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