Washington Political Consultant Pleads Guilty In Fraud And Corruption Scheme

The U.S. Justice Department released the below information:

Political consultant Thomas Lindenfeld, 59, of Washington, D.C., pleaded guilty today in the Eastern District of Pennsylvania to conspiracy to commit wire fraud for his role in a fraud and corruption scheme related to illegal campaign contributions.

Assistant Attorney General Leslie R. Caldwell of the Justice Department’s Criminal Division, U.S. Attorney Zane David Memeger of the Eastern District of Pennsylvania, Special Agent in Charge Edward J. Hanko of the FBI’s Philadelphia Field Office and Acting Special Agent in Charge Richard Gross of the Internal Revenue Service – Criminal Investigation (IRS-CI) made the announcement.

According to admissions in his plea agreement, Lindenfeld agreed to route an illegal $1 million political contribution for “Elected Official A” during a 2007 campaign for elected office. The contribution was in the form of a loan routed through Lindenfeld’s political consulting firm, LSG Strategic Services Corporation (LSG). 

When the campaign donor attempted to collect on the outstanding balance of the $1 million loan, however, Lindenfeld and his co-conspirators, at the direction of Elected Official A, engaged in a complicated series of transactions using federal grant money and monies from Sallie Mae’s charitable arm illegally to repay the loan.  These transactions were routed through several entities, including LSG, and were all falsely labeled as payments for services that were never actually rendered.

Lindenfeld admitted that, in exchange for the work he had done on the campaign, which included concealing the illegal campaign contribution, Elected Official A agreed to use his elected position to steer federal funding to Lindenfeld’s proposed environmental advocacy group, Blue Guardians.  Lindenfeld further admitted that he created Blue Guardians at the direction of Elected Official A for the purpose of receiving the federal funding.

According to Lindenfeld, Elected Official A advocated for $15 million in federal funding for Blue Guardians as a reward for Lindenfeld’s services.  Five hundred thousand dollars was approved in 2009 as an earmark through the National Oceanic and Atmospheric Administration (NOAA).  Lindenfeld admitted, however, that the Blue Guardians did not exist in December 2009, and that he only created an email address, articles of incorporation, and a tax identification number for Blue Guardians in April 2010. 

After receiving questions from NOAA and members of the press, Lindenfeld declined the funding, stating that he and Elected Official A decided it could be better spent on the oil spill in the Gulf. 

NOAA did not disburse the $500,000 to Lindenfeld or Blue Guardians.

U.S. District Court Judge Harvey Bartle III scheduled a sentencing hearing for March 25, 2015.
The case is being investigated by the FBI and the IRS-CI with assistance provided by NASA’s Office of Inspector General and the Department of Commerce’s Office of Inspector General. 

This case is being prosecuted by Assistant U.S. Attorney Paul L. Gray of the Eastern District of Pennsylvania and Trial Attorney Eric L. Gibson of the Criminal Division’s Public Integrity Section.

Note: You can also read Jason Nark's piece in the Philadelphia Daily News on the above case and Congressman Chaka Fattah, described as "Elected Official A" in the above release, via the below link:

http://www.philly.com/philly/news/20141106_Another_member_of_Chaka_Fattah_s_inner_circle_flips.html
 

One Of America's Greatest Heroes: Defense Secretary Praises Neil Armstrong's Legacy

By John Valceanu
American Forces Press Service

WASHINGTON, Aug. 25, 2012 - Defense Secretary Leon E. Panetta said he was deeply saddened by death of Neil Armstrong today, calling the pioneering astronaut "one of America's greatest heroes and naval aviators."

Armstrong was the first man to walk on the moon, during the 1969 Apollo 11 mission he commanded as a NASA civilian. He also had a distinguished career as a Navy combat aviator during the Korean War. He died from complications resulting from cardiovascular procedures, according to a statement released by his family. He was 82.

"On behalf of the Department of Defense, I express my condolences to the Armstrong family during this difficult time," Panetta said in his statement. The defense secretary called Armstrong "one of our own," praising his service to the nation both in and out of military uniform.

"As a decorated Korean War veteran, as an astronaut for NASA, and as the first man to walk on the moon, Neil inspired generations of Americans to believe that as a nation we are capable of achieving greatness that only comes with determination, perseverance, and hard work," Panetta said.

"As a true pioneer, his one small step showed all mankind the great feats we can accomplish when we set ourselves to the task," the secretary said.

Panetta said Armstrong may be gone, but "his legacy of American achievement and national pride will live forever."

P.J. O'Rourke On The Late, Great U.S. Space Program

 

The conservative humorist P.J. O'Rourke wrote a clever and funny piece on the U.S. space program, for the Weekly Standard.

You can read the piece via the below link:

http://www.weeklystandard.com/articles/candidates-orbit_634906.html?page=1 

Space Capability Integral To All Military Operations, Says Commander Of Air Force Space Command

By Cheryl Pellerin
American Forces Press Service

WASHINGTON, March 23, 2012 - Space capabilities have become integral to all military operations, the commander of Air Force Space Command told reporters here during a Defense Writers Group breakfast yesterday.

"It's hard to imagine what life was like before we had ... GPS providing very accurate targeting capability, military satellite communications providing all the reach-back that's needed, [and] missile warning providing cover for our deployed forces," Air Force Gen. William L. Shelton said.

The Air Force launched and maintains the 24 satellites that make up the GPS navigation system. The all-weather, 24-hour system was intended for military use, but in 1983 President Ronald Reagan made it freely available to civilians, for the public good, after a Korean Air Lines flight carrying 269 people was shot down for straying into Soviet airspace.

The first GPS satellite was launched in 1989, and the 24th in 1994. In 2000, Congress authorized a modernization effort called GPS-III that will improve position, navigation and timing services and add advanced anti-jam capabilities to the constellation.

"The biggest concern is that GPS's signal is a very weak [one]," Shelton said. "It's a spread-spectrum signal, and it is not difficult to jam. ... In fact, you can buy [a GPS jammer] online, and we're starting to see even criminal elements use GPS jamming to cover their tracks. The game afoot here is to continue to drive a no-kidding adversary to higher powers of their jammers. Once you get to a significant power level, those are called targets."

The Air Force is cranking up power on the satellites to force adversaries to use higher-power jammers that can then be found and targeted, Shelton said.

"One of the design features of GPS-III is higher power," Shelton said, "and we also can do some things with antenna technology and the way we operate our platforms to protect ourselves from jamming."

For the Air Force satellite effort, space launch -- getting satellites from Earth to orbit -- is truly foundational, Shelton said. In 2011, the Defense Department and intelligence community succeeded in all 49 attempts to launch evolved expendable launch vehicles, or EELVs, that carried satellites into orbit.

The Air Force EELV program, replacing the existing launch fleet with two families of vehicles that use common components and infrastructure, seeks to make space launch more reliable and affordable, the general explained.

United Launch Alliance, which Shelton called "the only supplier of the full gamut of launch capabilities," now handles space launches for the Defense Department, NASA, and the intelligence community -- including the National Reconnaissance Office, the government agency that designs, builds, launches and maintains U.S. intelligence satellites.

ULA, formed in 2006, is a joint venture by Lockheed Martin and the Boeing Co. that uses Atlas V and Delta II and Delta IV launch vehicles to support strategic U.S. space initiatives.

"We are very proud of our success record in the launch business, unprecedented in the history of space flight, ... but at the same time, with costs spiraling like they are, we have to take action to reduce the cost," Shelton said.

One action, he said, is to ask ULA to come in with priced options for booster cores, or rocket stages, over three to five years. "Somewhere in there," the general added, "we believe there will be a sweet spot for us."

The other action, Shelton said, is to use commercial services whenever possible, citing military use of wideband communications as an example.

"If all I'm concerned about is volumes of data moving around in space and ultimately down on the ground, commercial space knows how to do that very well and very economically," he explained. "If you look at the bandwidth coming back from Afghanistan, somewhere in the 70 percent to 80 percent range is commercial satellite communications. We've already proven in warfare that we can rely on commercial satellite communication."

But the services must be assured of worldwide capability, the general said.

"If you tell me where I'm going to fight, it's easy," Shelton said. "But if I have to protect the capability to fight anywhere, any time, can I do it commercially, or do I have to have a dedicated military capability to do that? Those are all the kinds of things we are exploring with the commercial community."

Using commercial space launch services for national security satellite launches is not an option today, he said, because the capability doesn't yet exist in the commercial world.

"A national security payload on top of a commercial asset has to be a proven capability," Shelton said. "When you're talking $1 billion for a satellite, as well as the national security capability that satellite represents, as well as how long it would take you to get replacement capability for that, you just don't want to take the risk."

Two U.S. commercial space companies, Orbital Sciences Corp. and Space Exploration Technologies Corp., have the potential to launch national security assets.

Orbital, based in Virginia, has delivered or had under contract 1,000 satellites, launch vehicles and other space-related systems since 1982. The company says it provides full-service engineering, production and technical services for NASA, DOD and commercial and academic space programs, and is supplying commercial cargo resupply services for the International Space Station.

SpaceX, established in 2002, reports that it has developed two new launch vehicles; has a manifest for light, medium and heavy-lift space launches into 2017; and has received commercial off-the-shelf funding from NASA to demonstrate delivery and return of cargo to the space station.

Shelton said the Air Force distributed a step-by-step guide to certification for national security launches in October. Commercial companies, he said, "just need to give us adequate insight to [their history of] commercial missions so we can assure ourselves that no corners were cut, that we understand their process, the reliability of the components [and] their capabilities."

"Once they've proven that with a number of missions," he added, "they'll be ready to go."

Noted Scientist Sentenced To 13 Years In Prison For Attempted Espionage, Fraud And Tax Charges

The U.S. Justice Department released the below information today:
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WASHINGTON – Stewart David Nozette, 54, a scientist who once worked for the Department of Energy, the Department of Defense, the National Aeronautics and Space Administration and the White House’s National Space Council, was sentenced today to 13 years in prison for attempted espionage, conspiracy to defraud the United States and tax evasion.

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The sentence covered charges in two cases. In one, Nozette pleaded guilty in September 2011 to attempted espionage for providing classified information to a person he believed to be an Israeli intelligence officer. In the other, he pleaded guilty in January 2009 to fraud and tax charges stemming from more than $265,000 in false claims he submitted to the government.

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The sentencing, which took place this morning in the U.S. District Court for the District of Columbia, was announced by Ronald C. Machen Jr., U.S. Attorney for the District of Columbia; Lisa Monaco, Assistant Attorney General for National Security; and Principal Deputy Assistant Attorney General John A. DiCicco of the Tax Division.

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Joining in the announcement were James W. McJunkin, Assistant Director in Charge of the FBI’s Washington Field Office; Paul K. Martin, Inspector General for the National Aeronautics and Space Administration (NASA OIG); Eric Hylton, Acting Special Agent in Charge of the Washington Field Office of the Internal Revenue Service-Criminal Investigation (IRS-CI); and John Wagner, Special Agent in Charge of the Washington, D.C., Office of the Naval Criminal Investigative Service (NCIS).

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In addition to the prison term, the Honorable Paul L. Friedman ordered that Nozette pay more than $217,000 in restitution to the government agencies he defrauded.

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Nozette has been in custody since his arrest for attempted espionage on Oct. 19, 2009. At the time, he was awaiting sentencing on the fraud and tax evasion charges. FBI agents arrested Nozette following an undercover operation in which he provided classified materials on three occasions, including one that formed the basis for his guilty plea. He was subsequently indicted by a federal grand jury. The indictment does not allege that the government of Israel or anyone acting on its behalf committed any offense under U.S. laws in this case.

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“Stewart Nozette's greed exceeded his loyalty to our country” said U.S. Attorney Machen. “He wasted his talent and ruined his reputation by agreeing to sell national secrets to someone he believed was a foreign agent. His time in prison will provide him ample opportunity to reflect on his decision to betray the United States.”

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“Stewart Nozette betrayed his country and the trust that was placed in him by attempting to sell some of America’s most closely-guarded secrets for profit. Today, he received the justice he deserves. As this case demonstrates, we remain vigilant in protecting America’s secrets and in bringing to justice those who compromise them,” said Assistant Attorney General Monaco. “I thank the many agents, analysts and prosecutors who worked on this important case.”

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“As this case demonstrates, those who attempt to evade their taxes by abusing the tax-exempt status of non-profit entities will be investigated, prosecuted and punished,” said Principal Deputy Assistant Attorney General DiCicco.
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“Today’s sentencing demonstrates that espionage remains a serious threat to our national security,” said Assistant Director in Charge McJunkin. “The FBI and our partners in the defense and intelligence communities work every day to prevent sensitive information from getting into the wrong hands, and I commend the hard work of the dedicated agents, analysts and prosecutors who spent a significant amount of time bringing this case to resolution.”

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“We are particularly proud that NASA OIG’s fraud investigation of Nozette, which began in 2006, served as the catalyst for further investigation and today's outcome,” said NASA Inspector General Martin.

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“IRS-Criminal Investigation provides financial investigative expertise in our work with our law enforcement partners,” said Acting Special Agent in Charge Hylton. “Pooling the skills of each agency makes a formidable team as we investigate allegations of wrongdoing. Mr. Nozette decided to betray his country to line his own pockets rather than play by the rules. He now is being held accountable for his actions.”

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“Federal agents take an oath to protect our nation ‘against all enemies, foreign and domestic.’ That would include ‘insider threats’ like Stewart Nozette,” said Special Agent in Charge Wagner. “NCIS is committed to working with our law enforcement partners and prosecutors to find and hold accountable those like Nozette who put personal gain above national security.”

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Nozette received a Ph.D. in Planetary Sciences from the Massachusetts Institute of Technology. Beginning in at least 1989, he held sensitive and high-profile positions within the U.S. government. He worked in various capacities on behalf of the government in the development of state-of-the-art programs in defense and space. During his career, for example, Nozette worked at the White House on the National Space Council, Executive Office of the President. He also worked as a physicist for the U.S. Department of Energy’s Lawrence Livermore National Laboratory, where he designed highly advanced technology.

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Nozette was the president, treasurer and director of the Alliance for Competitive Technology (ACT), a non-profit organization that he organized in March 1990. Between January 2000 and February 2006, Nozette, through his company, ACT, entered into agreements with several government agencies to develop highly advanced technology. Nozette performed some of this research and development at the U.S. Naval Research Laboratory (NRL) in Washington, D.C., the Defense Advanced Research Projects Agency (DARPA) in Arlington, Va., and NASA’s Goddard Space Flight Center in Greenbelt, Md.

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In connection with the fraud and tax case, Nozette admitted that, from 2000 through 2006, he used ACT to defraud the NRL, DARPA and NASA by making and presenting more than $265,000 in fraudulent reimbursement claims, most of which were paid. He also admitted that, from 2001 through 2005, he willfully evaded more than $200,000 in federal taxes. In addition, he admitted using ACT, an entity exempt from taxation because of its non-profit status, to receive income and to pay personal expenses, such as mortgages, automobile loans, sedan services and other items.

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The investigation concerning ACT led investigators to suspect that Nozette had misused government information. From 1989 through 2006, Nozette held security clearances as high as TOP SECRET and had regular, frequent access to classified information and documents related to the national defense of the United States.

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On Sept. 3, 2009, Nozette was contacted via telephone by an individual purporting to be an Israeli intelligence officer from the Mossad, but who was, in fact, an undercover employee of the FBI. That same day, Nozette informed the undercover employee that he had clearances “all the way to Top Secret SCI” and that anything “that the U.S. has done in space I’ve seen.” He stated that he would provide classified information for money and a foreign passport to a country without extradition to the United States.

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A series of contacts followed over the next several weeks, including meetings and exchanges in which Nozette took $10,000 in cash left by the FBI at pre-arranged drop-off sites. Nozette provided information classified as SECRET/SCI and TOP SECRET/SCI that related to the national defense. Some of this information directly concerned satellites, early warning systems, means of defense or retaliation against large-scale attack, communications intelligence information and major elements of defense strategy.

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Nozette and the undercover employee met for the final time on Oct. 19, 2009, at the Mayflower Hotel. During that meeting, Nozette pushed to receive larger payments for the secrets he was disclosing, declaring that, “I gave you even in this first run, some of the most classified information that there is. . . . I’ve sort of crossed the Rubicon.”

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Nozette was arrested soon after he made these statements.

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The investigation of the fraud and tax evasion case was conducted by NASA-OIG, NCIS, the Defense Criminal Investigative Service (DCIS), IRS-CI, the IRS Tax Exempt & Government Entities Group, the Naval Audit Service, the Defense Contract Audit Agency and the FBI’s Washington Field Office.

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The prosecution of the fraud and tax evasion case was handled by Assistant U.S. Attorney Michael K. Atkinson from the Fraud and Public Corruption Section of the U.S. Attorney’s Office for the District of Columbia and Trial Attorney Kenneth C. Vert from the Department of Justice’s Tax Division.

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The investigation of the attempted espionage case was conducted by the FBI’s Washington Field Office, with assistance from NCIS; Naval Audit Service; National Reconnaissance Office; Air Force Office of Special Investigations; Defense Computer Forensics Laboratory; Defense Advanced Research Projects Agency; DCIS; Defense Contract Audit Agency; U.S. Army 902^nd Military Intelligence Group; NASA Office of Counterintelligence; NASA-OIG; Department of Energy Office of Intelligence and Counterintelligence; IRS-CI; IRS Tax Exempt & Government Entities group; U.S. Customs and Border Protection; and the U.S. Postal Inspection Service, as well as other partners in the U.S. intelligence community.

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The prosecution of that case was handled by Assistant U.S. Attorney Anthony Asuncion, from the National Security Section of the U.S. Attorney’s Office for the District of Columbia, and Trial Attorneys Deborah A. Curtis and Heather M. Schmidt, from the Counterespionage Section of the Justice Department’s National Security Division.