Idaho CEO arrested for allegedly hiding company’s Russian ties to win U.S. Gov. contracts

BOISE, Idaho (KIFI) — An Idaho tech CEO has been arrested as part of what the New York Post has dubbed a "Cold War-style plot" to land lucrative U.S. government contracts.

Oxygen Forensics CEO Lee Reiber, 55, of Boise, Idaho, and a Russian national have been charged in federal court with conspiracy to commit wire fraud after allegedly concealing the Russian ownership and development of the company, the U.S. Attorney's Office of Idaho announced today.

Reiber was arrested Sunday, September 20th, by federal agents in Idaho. He made his initial appearance Tuesday, Sept. 22, in U.S. District Court in Boise, where he was released on bond.

His co-defendant, 52-year-old Oleg Sergeyevich Davydov of Moscow, was arrested the same day at London’s Heathrow Airport while attempting to board a flight to Istanbul. The U.S. is currently seeking Davydov’s extradition.

Among the deals landed through the alleged scheme was a five-year contract with the U.S. Secret Service’s National Computer Forensics Institute, alongside contracts with the Department of Defense and components of the Department of Homeland Security (DHS).

Digital forensics software is used by law enforcement agencies "to recover, preserve, and analyze electronic data from digital devices while keeping the original files unchanged," according to the U.S. Attorney’s Office.

Concealing Russian Ownership and Sanctions Evasion

According to the U.S. Attorney's Office, after the United States imposed expanded sanctions on Russia in early 2022 in response to Russia’s invasion of Ukraine, Davydov, Reiber, and the Russian co-conspirators agreed to conceal Oxygen Forensics’ true ownership and the development of its software in Russia.

In reality, federal prosecutors allege Oxygen Forensics was secretly owned and controlled by five Russian nationals through a Cyprus-based holding company. The owners also control MKO Systems LLC (formerly Oxygen Software LLC), a Russian firm co-founded by Davydov in 2000.

"Davydov was the Russian company’s chief technology officer and was responsible for the development of its software. He helped establish Oxygen Forensics in Virginia in 2013. Reiber joined the company in August 2015," said Ciaran McEvoy, Public Information Officer for the U.S. Attorney’s Office for the Central District of California, in a news release.

The court affidavit states that developers writing the software worked in Russia. Under different product names, MKO sold the same software in Russia to high-profile state entities, including the Federal Security Service (FSB), the Russian Investigative Committee, and the Ministry of Internal Affairs.

Beginning in March 2022 and continuing to the present, Reiber was installed as the company’s CEO, president, and chairman of the board, and Russian owners were then removed from the company’s public corporate filings in a conspiracy to secure contracts from federal agencies through Oxygen Forensics Inc.

"The company’s Russian owners continued to make significant decisions and set Reiber’s compensation, overruled him on payments, and held signatory authority over the company’s bank accounts," prosecutors noted.

Prosecutors allege Reiber also actively misled government officials about the software’s background. In his role as CEO, Reiber repeatedly certified to government agencies that Oxygen Forensics had no foreign ownership or control and that its software was developed in the United States, according to court filings.

The complaint does not allege that the software contained malicious code or that it was used to gain unauthorized access to any customer’s computer systems or data.

What Happens Now

If convicted, each defendant faces a statutory maximum penalty of 20 years in federal prison.

The case is being investigated by the U.S. Department of Commerce’s Bureau of Industry and Security, with assistance from the Department of Defense Office of Inspector General’s Defense Criminal Investigative Service Cyber Field Office. The Justice Department’s Office of International Affairs is assisting with Davydov’s extradition.

A criminal complaint merely contains allegations. All defendants are presumed innocent until proven guilty beyond a reasonable doubt in a court of law.

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