Ex-CIA official found with gold bars pleads guilty to $194 million fraud
Version 2: Additional outlets confirmed the guilty plea and added details on fabricated credentials, the $145 million transfer and gold bars, while The Boston Globe alone reported an admission involving a foreign government official.
In short
David J. Rush, a former senior CIA official, pleaded guilty Tuesday in federal court in Alexandria, Virginia, to one count of wire fraud in a scheme prosecutors say cost the federal government about $194 million. Prosecutors said Rush fabricated a classified program to steer roughly $145 million into luxury Florida real estate and invented a separate bogus government activity to obtain hundreds of gold bars. He faces up to 20 years in prison and is scheduled to be sentenced on Jan. 28; outlets have given differing figures for the number and value of the gold bars and the total amount involved.
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David J. Rush, a former senior CIA official, pleaded guilty Tuesday in federal court in Alexandria, Virginia, to one count of wire fraud, court records show. The Justice Department said his fraudulent conduct cost the federal government approximately $194 million in total losses. Rush, 49, of Ashburn, Virginia, faces up to 20 years in prison and is scheduled to be sentenced by U.S. District Judge Michael Nachmanoff on Jan. 28 in Alexandria. [ 5 , 8 , 10 , 12 ]
Prosecutors said Rush fabricated a “highly classified” government program to justify the acquisition of luxury property in south Florida that he intended to resell for profit, and separately concocted a bogus “sensitive government activity” to obtain gold bars. A court filing said he directed someone to transfer approximately $145 million to a holding company he formed and used the funds to acquire four “luxury” properties in Palm Beach and Hobe Sound, Florida. The filing also said he tried to fraudulently authorize the release of $100 million from a government contract. [ 5 , 8 , 10 , 12 ]
Prosecutors accused Rush of lying to colleagues and government contractors about his military and academic credentials and about the fake program, which he falsely claimed was authorized by high-ranking U.S. officials. “Rush used his legitimate government authority and manufactured personal bona fides to create confidence in his directions,” the court filing says. Fox News reported that on job applications Rush claimed to be a graduate of the U.S. Air Force Test Pilot School and director of test operations for a joint Army/Navy unit, but was never a pilot, held no FAA licenses and served primarily as an information systems technician in the Navy. [ 6 , 8 , 9 , 10 , 12 ]
Outlets differed on the assets and total loss. NBC News initially reported 303 gold bars worth $40 million; Fox News reported 298 gold bars worth $46 million, plus $2.1 million in cash and dozens of luxury items. AP, CNN and The Seattle Times cited hundreds of gold bars worth over $40 million, and previous filings cited roughly $46 million. CBS News reported a plea agreement forfeiture of at least $194 million, including 298 gold bars, two BMWs, 35 luxury watches and four Florida homes; other outlets did not list all those items. ABC News said he admitted defrauding the government of nearly $200 million, and The New York Times headlined a $145 million scam. [ 1 , 2 , 4 , 5 , 8 , 9 , 12 , 13 ]
The CIA conducted an internal investigation into the movement of funds and referred the matter to the FBI, the documents say. CIA Director John Ratcliffe said Rush “abused his position and betrayed the public trust and should be held fully accountable for his actions.” Attorney General Todd Blanche said: “Federal employees are entrusted with serving the American people, not themselves.” [ 5 , 6 , 9 ]
The New York Times reported the plea hearing revealed a far larger pattern of fraud while keeping key secrets hidden; NBC News reported a plea agreement would let the government avoid a lengthy trial that could bring further attention to any CIA mistakes and prevent disclosure of additional information on agency operations. The Boston Globe reported Rush admitted to a $145 million scam involving luxury real estate and to providing sensitive intelligence to a foreign government official, a claim not corroborated in other documents. NBC News also reported the case has drawn attention to Deputy Defense Secretary Steve Feinberg, who had a close professional relationship with Rush, according to sources; Feinberg denied that through a Pentagon spokesperson, has not been accused of wrongdoing and the FBI said he was not under investigation. [ 1 , 4 , 11 ]
Why it matters
The case involves a senior official with top secret clearances at the CIA and work on classified Pentagon programs, and a plea agreement lets the government avoid a lengthy trial that could bring further attention to any CIA mistakes and prevent disclosure of additional information on agency operations, according to NBC News. The CIA said it opened an internal investigation and referred the matter to the FBI. NBC News reported the case has also drawn attention to Deputy Defense Secretary Steve Feinberg, who has not been accused of wrongdoing and whose relationship with Rush he denies.
Key facts
- David J. Rush, 49, of Ashburn, Virginia, pleaded guilty Tuesday to one count of wire fraud in federal court in Alexandria, Virginia. [ 5 , 6 , 8 , 10 , 12 ]
- The Justice Department said his fraudulent conduct cost the federal government approximately $194 million in total losses. [ 5 , 6 , 8 , 9 , 12 ]
- Prosecutors said Rush fabricated a “highly classified” government program to justify $145 million in Florida property purchases and a separate bogus “sensitive government activity” to obtain gold bars. [ 5 , 8 , 10 , 12 ]
- Prosecutors accused Rush of lying to colleagues and government contractors about his military and academic credentials and about the fake program, which he claimed was authorized by high-ranking U.S. officials. [ 6 , 8 , 9 , 10 , 12 ]
- Judge Michael Nachmanoff is scheduled to sentence Rush on Jan. 28 in Alexandria; wire fraud carries a maximum of 20 years in prison. [ 5 , 8 , 10 , 12 ]
- The CIA conducted an internal investigation into the movement of funds and referred the matter to the FBI, and CIA Director John Ratcliffe said Rush “abused his position and betrayed the public trust.” [ 5 , 6 , 9 ]
- Attorney General Todd Blanche said federal employees are entrusted with serving the American people, not themselves. [ 6 , 9 ]
Confirmed by several sources
- David J. Rush pleaded guilty to one count of wire fraud in federal court in Virginia. [ 2 , 3 , 5 , 6 , 8 , 9 , 10 , 12 ]
- The Justice Department said the fraudulent conduct cost the federal government approximately $194 million in total losses. [ 5 , 6 , 8 , 9 , 12 ]
- Rush fabricated a “highly classified” government program to justify the acquisition of luxury property in south Florida that he intended to resell for profit. [ 5 , 8 , 10 , 12 ]
- Rush separately concocted a bogus “sensitive government activity” to obtain the gold bars. [ 5 , 8 , 10 , 12 ]
- Rush directed the transfer of approximately $145 million to a holding company formed at his direction and used the funds to acquire four “luxury” properties in Palm Beach and Hobe Sound, Florida. [ 5 , 8 , 10 , 12 ]
- Rush is scheduled to be sentenced by Judge Michael Nachmanoff on Jan. 28 in Alexandria, Virginia. [ 8 , 10 , 12 ]
- Prosecutors accused Rush of lying to colleagues and government contractors about his military and academic credentials and about the fake program, which he claimed was authorized by high-ranking U.S. officials. [ 6 , 8 , 9 , 10 , 12 ]
- The CIA conducted an internal investigation and referred the matter to the FBI. [ 5 , 6 , 9 ]
- CIA Director John Ratcliffe said Rush “abused his position and betrayed the public trust and should be held fully accountable.” [ 6 , 9 ]
- Attorney General Todd Blanche said federal employees are entrusted with serving the American people, not themselves. [ 6 , 9 ]
Still unclear
- The number and value of the gold bars found in Rush’s home. Outlets give different figures: NBC News initially reported 303 bars worth $40 million; Fox News reported 298 bars worth $46 million plus $2.1 million in cash; AP, CNN and The Seattle Times cited hundreds of bars worth over $40 million and previous filings cited roughly $46 million; NBC News later reported seeing 298 bars.
- The total amount Rush is said to have taken. The Justice Department figure cited by several outlets is approximately $194 million; ABC News said he admitted defrauding the government out of nearly $200 million; The New York Times headlined a $145 million scam; CBS News and UPI said nearly $200 million.
- The Boston Globe report that Rush admitted to providing sensitive intelligence to a foreign government official. This claim appears in only one document and is not corroborated by any other outlet in the set.
- The nature of Rush’s relationship with Deputy Defense Secretary Steve Feinberg. NBC News, citing sources, reported a close professional relationship; Feinberg, through a Pentagon spokesperson, denied the two had a close relationship. Feinberg has not been accused of wrongdoing and the FBI said he was not under investigation.
- What remains undisclosed about the case. NBC News reported a plea agreement would prevent disclosure of additional information on the agency’s operations, and The New York Times said the hearing kept some key secrets hidden; the documents do not say what those are.
- CBS News reported that Rush agreed to forfeit at least $194 million, including 298 gold bars, two BMWs, 35 luxury watches and four luxury homes in Florida. This detailed forfeiture list appears in only one document; other outlets mention gold bars, cash and luxury items but do not list all these assets.
What local media are saying
Timeline, local time
- On Oct. 5, NBC News reports a plea agreement hearing is set for Tuesday afternoon before U.S. District Judge Michael Nachmanoff in Alexandria, Virginia, and that Rush has not yet entered a plea. [ 1 ]
- ABC News reports a plea hearing is set for the former CIA officer and that prosecutors previously described him as a “master manipulator.” [ 2 ]
- NBC News reports Rush pleaded guilty to wire fraud under an agreement with federal prosecutors. [ 3 ]
- The New York Times reports the plea hearing revealed a far larger pattern of fraud, while keeping some key secrets hidden. [ 4 ]
- CBS News reports Rush admitted inventing fake classified programs to divert nearly $200 million, and that he agreed to forfeit at least $194 million including 298 gold bars. [ 5 ]
- The New York Post reports the guilty plea and carries statements from Attorney General Todd Blanche and CIA Director John Ratcliffe. [ 6 ]
- The Seattle Times reports via AP that Judge Nachmanoff is scheduled to sentence Rush on Jan. 28 in Alexandria. [ 8 ]
- Fox News reports the plea and cites 298 gold bars worth $46 million, $2.1 million in cash and dozens of luxury items seized from his home. [ 9 ]
- The Boston Globe reports Rush admitted to a $145 million scam and to providing sensitive intelligence to a foreign government official. [ 11 ]
- CNN reports Rush, 49, of Ashburn, Virginia, pleaded guilty and is scheduled to be sentenced on Jan. 28. [ 12 ]
- NBC News reports seeing 298 gold bars, stacks of cash and luxury watches seized from Rush’s home. [ 13 ]