Feds accuse Secret Service software provider of hiding Russian ties

Federal prosecutors say the CEO of Oxygen Forensics told the government that the company had no foreign ownership, when it was actually controlled by five Russian nationals.LOS ANGELES (CN) — A Virginia-based company that was secretly owned by a group of Russian nationals surreptitiously sold forensic software developed in Russia to the U.S. Secret Service, federal prosecutors said Wednesday.Lee Reiber, the CEO of Oxygen Forensics Inc., was arrested Sunday in Idaho, the U.S. Attorney’s Office in Los Angeles said in a statement. Oleg Davydov, one of the Russian owners of the company, was arrested the same day at London Heathrow Airport. Both are charged with conspiracy to commit wire fraud.The Justice Department accuses Reiber of telling the federal government that the company had no foreign ownership or control and that its software was developed in the U.S. — when in fact five Russian nationals, including Davydov, owned and controlled the company and its software was developed in Russia.The feds stopped short of claiming the software contained malicious code or that it was used to gain unauthorized access to the Secret Service’s computer systems or data. The digital forensic software Oxygen Forensics sold to the Secret Service is used to recover, preserve and analyze electronic data from digital devices while keeping the original files unchanged, they said.“Reiber knew from 2018 that the U.S. government had security concerns about Russian-developed software, and he was told in writing in January 2024 that foreign government customers would not buy the forensic software if its development in Russia were disclosed,” a U.S. Department of Commerce special agent said in the criminal complaint.“In March 2022, he and Davydov arranged for Reiber to initiate the software build on U.S.-based cloud infrastructure so that Reiber, in his words, could say ’this is what I do or what we do in the US,’ while the code continued to be written, reviewed, and managed by the team in Russia,” according to the special agent.Davydov co-founded Oxygen Software LLC in Russia in 2000 and serves as chief technology officer responsible for the development of its forensic software. He helped set up the company’s U.S. affiliate in 2013 and was listed as Oxygen Forensics’ vice president in its U.S. corporate filings.In 2022, when the U.S. imposed sanctions on Russian companies in response to the invasion of Ukraine, Davydov’s name was removed from the Virginia company’s corporate filings and the Russian company changed its name to MKO-Systems LLC.The Russian company also sells its forensic software to Russian secret service.In November 2023, a reporter asked Reiber about Oxygen Forensics’ ownership and its connection to the Russian company, federal prosecutors said. Reiber then wrote to Davydov and two other Russian owners that public reporting on the connection “could destroy this entire opportunity,” referring to a pending contract with the National Computer Forensics Institute, and that the “current existence of this company hangs in the balance.”In September 2024, the NCFI awarded a five-year contract, with a ceiling of $12 million, for the software, according to the Justice Department. The award file included Reiber’s October 2023 certification that the company had no immediate or highest-level owner.An attorney for Reiber didn’t immediately respond to a request for comment.Subscribe to our free newslettersOur weekly newsletter Closing Arguments offers the latest about ongoing trials, major litigation and rulings in courthouses around the U.S. and the world, while the monthly Under the Lights dishes the legal dirt from Hollywood, sports, Big Tech and the arts.Additional Reads