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WASHINGTON (AP) — A former senior CIA official pleaded guilty on Tuesday in Virginia to a charge that he abused his position and government funds to enrich himself by acquiring Florida real estate and hundreds of gold bars worth over $40 million, according to court records.
David J. Rush fabricated a “highly classified” government program to justify the acquisition of luxury property in south Florida that he intended to resell for personal profit, according to a court filing. Rush separately concocted a bogus “sensitive government activity” to obtain the gold bars, the filing says.
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Rush’s fraudulent conduct cost the federal government approximately $194 million in total losses, according to the Justice Department.
Prosecutors also accuse Rush of lying to colleagues and government contractors about his military and academic credentials and the fake program that he invented, falsely claiming it 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.
Rush, 49, of Ashburn, Virginia, pleaded guilty to one count of wire fraud, which carries a maximum prison sentence of 20 years, court records show. District Judge Michael Nachmanoff is scheduled to sentence Rush on Jan. 28 in Alexandria, Virginia.
Several months ago, Rush tried to fraudulently authorize the release of $100 million from a government contract, according to Tuesday’s filing.
He directed somebody else to transfer approximately $145 million to a holding company formed at his direction, then used those funds to acquire four “luxury” properties in Palm Beach and Hobe Sound, Florida, the filing says.
In previous court filings, prosecutors said Rush stashed roughly $46 million worth of gold bars from the federal government at his Virginia home. They also accused him of fraudulently claiming tens of thousands of dollars in compensation for military leave after he was honourably discharged from the U.S. Navy in 2015.
“Federal employees are entrusted with serving the American people, not themselves,” Attorney General Todd Blanche said in a statement.
CIA Director John Ratcliffe said the agency immediately referred the matter to the FBI after an internal investigation turned up evidence of Rush’s crimes.
“David Rush abused his position and betrayed the public trust and should be held fully accountable for his actions,” Ratcliffe said in a statement.
Rush was arrested after investigators searched his home and seized approximately 300 gold bars, roughly $2 million in U.S. currency and about 35 luxury watches, according to an FBI agent’s affidavit. A judge ordered Rush to be held without bond after his initial court appearance earlier this year.
During a hearing in June, defence attorney Jessica Carmichael said Rush wasn’t charged initially with any crimes related to the discovery of the gold bars, which she referred to as “basically a nonissue” and “nothing more than a sensational tidbit.” She said her client properly obtained the gold bars and kept them locked in a safe in his basement.
“Mr. Rush never claimed they were his,” Carmichael said.
Carmichael declined to comment on Rush’s guilty plea after Tuesday’s hearing.
Authorities say Rush lied about his education and military background on job applications, falsely claiming to be a former Navy pilot who graduated with a bachelor’s degree from Clemson University in South Carolina and a master’s degree from Rensselaer Polytechnic Institute in New York.
Investigators determined that he didn’t serve as a Navy pilot and didn’t attend either school. Rush enlisted in the Navy in 1997 and was honourably discharged from the U.S. Navy Reserve as a lieutenant in 2015, according to the FBI affidavit.
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