Navy Engineer Sought Cryptocurrency Payments to Share Nuclear Submarine Secrets: FBI

A nuclear engineer with the U.S. Navy stands accused of trying to sell secrets about the country's nuclear submarines to a foreign nation in exchange for cryptocurrency payments.

The espionage scheme was uncovered by the FBI late last year and a criminal complaint was subsequently filed against engineer Jonathan Toebbe and his wife Diane Toebe in West Virginia, according to The Washington Post.

The complaint alleged that Toebbe "has passed, and continues to pass, Restricted Data as defined by the Atomic Energy Act . . . to a foreign government . . . with the witting assistance of his spouse," according to court documents that were unsealed on Sunday.

cryptocurrency nuclear secrets scheme
A Navy engineer stands accused of selling nuclear submarine secrets to a foreign nation in exchange for cryptocurrency. In this photo, a representational image of a Bitcoin is seen. Dan Kitwood/Getty Images

The FBI became aware of the scheme in December when it received a package delivered to a foreign nation, the Post reported. It contained several documents pertaining to U.S. Naval operations, a letter, and an explanation of how to encrypt further communications.

"Please forward this letter to your military intelligence agency," the letter read. "I believe this information will be of great value to your nation. This is not a hoax."

Toebbe was caught after FBI agents posed as representatives of a foreign government and began reaching out about the offer. Email conversations included in the court documents showed that the engineer was extremely cautious and refused early on to meet with the agents in person, stating that he was risking his life to make the offer.

The emails also show that Toebbe was allegedly requesting $100,000 in cryptocurrency, according to the Post. The type of currency was not specified.

"I understand this is a large request," the engineer wrote. "However, please remember I am risking my life for your benefit and I have taken the first step. Please help me trust you fully."

The FBI eventually arranged a plan whereby it would pay Toebbe in chunks and the engineer would leave the information he was offering at designated locations in Jefferson County, West Virginia.

Toebbe was spotted by agents allegedly carrying out two drops after initial payments of $10,000 and $20,000, with his wife appearing to act as a lookout. Later, the agents paid Toebbe the final $70,000 and were sent a key with which the information on the cards could be decrypted.

The information Toebbe had given included details about the design and functions of Virginia-class nuclear submarine reactors. These state-of-the-art submarines boast "the latest in stealth, intelligence-gathering, and weapons system technology," according to court documents, and cost about $3 billion each.

Toebbe and his wife were arrested on October 2 and made their first court appearance on Tuesday. They each stand charged with conspiracy to communicate restricted data and the communication of restricted data.

Toebbe has worked for the U.S. Navy since 2012 and his wife is a high school teacher. They live together in Annapolis, Maryland.

Toebbe claimed in an email that his information was gathered slowly and methodically during his normal work duties so as not to arouse suspicion. It is not known at this time what foreign nation the FBI agents posed as while communicating with him, or which nations he might have been in contact with before the law enforcement agency caught wind of his alleged plans.