ANALYSIS:
A Northern Virginia software CEO duped U.S. front-line defense agencies, including the president’s personal security team, by boasting American ownership when Russians actually owned and operated the tech company and built the codes, new court files show.
Oxygen Forensics of Arlington sold the exported Russian anti-crime technology to the Defense Department, as well as to vital Department of Homeland Security branches, including the Secret Service.
The Russian-built software could perform the tricky tasks of password-cracking and snatching data from digital devices without leaving a trace. The Moscow-based techies commingled software products given to high-ranking Russian agencies, such as the Federal Security Service (FSB) — the successor to the notorious KGB — with the same applications given to the Secret Service.
The duplicity occurred as the U.S. was highly suspicious of using any Kremlin-approved digital products.
“Oxygen Russia thus sold the same software under different branding to the Russian security services that Oxygen US was concurrently selling to U.S. federal law enforcement agencies,” said a Department of Commerce special agent in a court affidavit reviewed by The Washington Times.
For all the Defense Department and DHS knew, Oxygen Forensics was led by Lee Reiber, a 55-year-old tech executive living in Boise, Idaho, who was a city police detective. He repeatedly assured the government his company was American-owned and its products were produced here, the Justice Department said in a statement issued by the U.S. attorney’s office in Los Angeles.
But the true owner was Oleg Sergeyevich Davydov, a Moscow resident and Kremlin contractor, and four other Russians who built the software in Russia, not America.
Mr. Reiber was arrested Sunday in Idaho and charged with conspiracy to commit wire fraud. Mr. Davydov was at Heathrow Airport on Sunday about to board a flight to Istanbul when he was nabbed.
“Oxygen Forensics held itself out to the U.S. government as being an independent, U.S.-based company,” Justice said. “In fact, Davydov and four other Russian nationals owned and controlled the company through a holding company based in Cyprus.”
The statement said the department is not alleging the Russian-created code was used to hack the Secret Service or other U.S. agencies.
But this statement does not rule out that the Russians surely learned about how DHS, and the Secret Service, conduct criminal investigations.
Here is how the scam worked:
Mr. Davydov co-founded a software company, MKO Systems LLC, in 2000. MKO provided software to the highest levels of the Kremlin’s security force – the FSB and the Russian Ministry of Internal Affairs. Mr. Davydov and his four associates also owned a Russian company, Oxygen Software LLC. In 2022, it was absorbed by MKO.
The date was important. In 2022, Russian President Vladimir Putin’s forces invaded Ukraine. The Biden administration imposed sanctions on Russian companies.
Mr. Davydov decided to conceal Russian ownership in Oxygen Forensics in Virginia by installing Mr. Reiber as CEO and chairman of the board. Mr. Davydov’s name disappeared from public documents.
Here is how Mr. Reiber carried out the fraud, according to the Justice Department:
— In 2022 and the next year, he falsely certified to the U.S. that Oxygen did not have a higher-ranking owner than him. At the time, Oxygen had a pending contract with the Secret Service’s National Computer Forensics Institute. Two years later, a five-year $11 million contract came through.
— In 2024, Mr. Reiber lied again, authorizing Oxygen to certify to the Defense Department that no foreigner controlled the firm, when actually the Russians were making all the decisions.
“As Mr. Reiber then knew, the company’s Russian owners were foreign persons who controlled its decisions and one of them had recently been appointed to its board under a Turkish identity,” the Justice Department said.
— Mr. Reiber told DHS that no one in Russia was developing his software, when in fact Davydov conducted the projects there.
According to the affidavit reviewed by The Times, the deceit went deeper.
The Russian owners laundered one comrade as a Turk with a new name so he could work for Oxygen in Arlington.
Said the Affidavit, “He rejoined Oxygen US’s executive management and Board of Directors in November 2024 but under a different name and identity, using a Turkish passport he had obtained in 2023…. In truth, Oxygen US was owned and controlled by Davydov and the other four shareholders, who were Russian nationals and residents.”
Even before 2022, the U.S. became suspicious of any Russian-produced software.
“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,” the affidavit said.
The affidavit said Mr. Reiber deliberately deceived the Secret Service.
The special agent, assigned to Commerce’s Bureau of Industry and Security, said, “While the code continued to be written, reviewed, and managed by the team in Russia, Reiber thereafter caused Oxygen US to present itself to the Secret Service as a ’forensic software development company’ and ’an American company,’ and in 2026 he and Oxygen US’s Vice President of Operations told DHS that no member of the development team was based in Russia and that no person in Russia had any role in developing the software or any access to its development environment. Reiber understood that disclosure of the truth would end Oxygen US’s business with the U.S. government customers.”
In February, a former Oxygen Forensic employee came forward to blow the whistle: Forensic was Russian owned. The next month, an undercover agent posed as a DHS contracting employee and spoke with Mr. Reiber by phone. Mr. Reiber falsely asserted no Russian was involved in any software application.
The Times submitted a query to DHS, asking if any of the Russian-supplied software was not as ordered. The Times did not receive a reply. The DHS X account and its press release file do not address the Russian scandal.
Mr. Reiber’s X social media page has no recent posts. Oxygen Forensics has posted this month on product demonstrations in Budapest and Germany, and a “training bonanza” at the Arlington headquarters. Its company webpage appears to have been taken down.
Twenty years ago, The Washington Post quoted Mr. Reiber in a story about the rich trove of information that can be harvested from an active, or deleted and discarded, mobile phone.
The story said:
“Lee Reiber, a Boise, Idaho, police detective specializing in cellphone forensics, has used recovered phone data to crack homicide, child abuse, domestic abuse cases. This year alone he has examined more than 100 phones in criminal and civil investigations and recovered data from 90 percent of them, he said. A man suspected of being a pedophile was undone by his phone. ’We had all his pictures,’ Reiber said.”
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