Ex-CIA Officer Arrested for Stealing USD40M in Gold Bars

(MENAFN) A former CIA officer has been arrested on allegations that he swindled approximately $40 million in gold bars from government defense contractors by fabricating an elaborate covert intelligence program — one of the most audacious insider fraud cases in recent U.S. intelligence history, The Washington Post reported Friday.

David Rush was taken into custody last month after FBI agents raided his home and recovered 303 gold bars, $2 million in cash, and 35 luxury watches, according to a government affidavit. Authorities allege Rush constructed a fictitious "black box" program — a term used to describe a highly classified intelligence operation reserved for the most sensitive covert activities — and used it as a vehicle to siphon millions of dollars in government funds for personal gain.

Rush, who served in the CIA's Directorate of Science and Technology, enlisted two colleagues to help execute the scheme, according to people familiar with the investigation who spoke to the Post — effectively drawing them in as potentially unwitting participants and insulating the operation from outside scrutiny.

"He persuaded one of them to transfer millions of dollars to the program via a government contract that was also fraudulent," sources told the Post. "He made up a contract."

The fraudulent program, sources told the Post, was tied to so-called "continuity of government" operations — highly sensitive contingency programs designed to keep federal institutions functioning in the event of nuclear war, natural disaster, or comparable catastrophe.

"Rush apparently used the fake government continuity program and the contract to persuade a government defense contractor to purchase large amounts of gold," one source said.

Rush now faces one count of theft of public money. At a federal detention hearing in Virginia on Friday, a judge ordered him held pending his next court appearance, citing a significant flight risk. He has not yet entered a plea.

In the fallout from Rush's arrest, the CIA has placed several agency officials on administrative leave as parallel investigations by the FBI and the spy agency continue, media reported.

The case has rattled the intelligence community and triggered urgent questions about internal oversight. Among the most pressing: how Rush allegedly constructed an entirely fictitious covert program — without authorization from superiors — and whether his two colleagues had any knowledge that the operation was fraudulent, according to the Post.

At Friday's hearing, Assistant U.S. Attorney Gavin Tisdale did not mince words in characterizing the defendant.

Rush was a "master manipulator" who "lied to colleagues" about basic facts of his pedigree and "lied to neighbors" about working as a Navy pilot, which he also lied about to the CIA when obtaining his position in the agency, Tisdale told the court.

The revelation has drawn sharp condemnation on Capitol Hill. U.S. Rep. Jim Himes, the ranking Democrat on the House Intelligence Committee, reacted with undisguised outrage.

"This is just staggering," Himes said in a statement. "Keeping gold bars and wads of cash in your house is not exactly top-notch tradecraft. From an oversight standpoint, how the hell did this happen?"

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