Judge rejects plea agreements from US Navy engineer and wife charged with conspiracy to sell classified information to foreign country
CNN
By Ellie Kaufman, CNN
A federal judge in West Virginia rejected proposed plea agreements made between federal prosecutors and a US Navy nuclear engineer and his wife who pleaded guilty to conspiring to sell classified information to a foreign country in exchange for thousands of dollars in cryptocurrency.
Judge Gina Groh rejected the plea agreements, stating it was not in the best interest of the country or the community to accept them. Under the agreements, Jonathan Toebbe could have been sentenced to between 12 and 18 years in prison, while his wife, Diana Toebbe, could have been sentenced to up to three years in prison.
They withdrew their guilty pleas after the judge rejected the plea agreeements and asked the judge to set a date for trial. The judge scheduled a future hearing to begin preparations for a trial in the case.
Groh read from a victim impact statement prepared by Vice Admiral William Houston, Commander of Naval Submarine Forces and US Atlantic Fleet, Allied Submarine Command, before announcing the rejection of the plea agreements. Vice Admiral Houston said the actions of the Toebbes posed a “very real and profound threat to national security,” in his statement given to the court.
“I find the sentencing options for the court in this case deficient,” Groh said in court.
Groh said she believed both proposed sentences in the plea agreements were not sufficient for the “very serious crimes” the two were charged with.
Both Jonathan and Diana Toebbe were initially charged with three federal felonies — one count of conspiracy to communicate restricted data and two counts of communication of restricted data, each carrying a sentence of up to life in prison.
Toebbe and his wife are accused of acting together to coordinate three separate drop-offs of SD cards containing classified information about nuclear submarines, specifically Virginia-class vessels.
Groh said she was heavily impacted by Vice Admiral Houston’s statement to the court. In the victim impact statement, Houston said Jonathan Toebbe’s actions have caused information that is a “critical component of national defense” to be “irreparably compromised.”
“Resources will now be needed to account for the information Mr. Toebbe compromised,” and “the lives of 25,000 active-duty submarine sailors today are at greater risk … directly due to Mr. Toebbe’s actions,” Houston wrote in his statement.
“I don’t find any justifiable reason for accepting either one of these plea agreements,” Groh said after reading from the Vice Admiral’s statement.
Judge Groh scheduled a hearing to begin preparations for a trial.
Classified information in a sandwich
Jonathan Toebbe is accused of taking classified information from the US Navy and putting it into encrypted SD cards before leaving them at dead-drop locations for what he believed were members of a foreign government in exchange for thousands of dollars in cryptocurrency. At the fourth dead-drop, the FBI, who had been communicating with Toebbe as a part of a sting operation, arrested the couple in October 2021.
Toebbe first sent a package to an undisclosed foreign government in April 2020 offering to sell nuclear secrets, and that government turned over the offer letter to the FBI, according to a criminal complaint. The FBI then conducted a year-long sting operation.
An FBI agent responded to Toebbe several months after he first reached out to the foreign government, eventually entering into an agreement with Toebbe to exchange thousands of dollars in cryptocurrency for the nuclear secrets.
The couple allegedly went to great lengths to hide the SD cards at the dead-drop locations over the course of several months, tucking an SD card into a saran-wrapped peanut butter sandwich in one instance, while others were hidden inside a packet of gum and a sealed Band-Aid wrapper.
FBI agents were monitoring and surveilling the Toebbes for months until they were eventually arrested on October 9 at what was to be their fourth dead-drop location.
The testifying special agent noted that the FBI moved quickly after discovering the couple was trying to sell these secrets in December 2020 because they were concerned the couple might try to sell the information to multiple countries.
After their arrest, the FBI searched their home in Annapolis, Maryland, where they discovered $11,300 in cash — all one hundred-dollar bills wrapped in rubber-bands; a crypto wallet; passports for their two children; and a go-bag containing a laptop computer, a USB drive and latex gloves.
As part of Toebbe’s plea agreement, he agreed to cooperate with government investigators — allowing them access to his electronic devices and accounts — and also assisted federal officials to find all of the classified information he allegedly stole from the US Navy.
This cooperation was significant, federal prosecutors said in court on Tuesday, allowing them to understand the full scope of his crimes.
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