Oxygen Forensics Leadership Arrested in International Fraud Scheme
The U.S. Department of Justice announced the arrest of two executives from Oxygen Forensics on charges of conspiracy to commit wire fraud, alleging the company concealed its Russian ownership to secure federal contracts. Lee Reiber, CEO of Oxygen US based in Boise, Idaho, was arrested at his residence. Oleg Davydov, identified as one of five Russian nationals who actually controlled the company, was apprehended in London, where U.S. authorities plan to pursue his extradition.
Alleged Deception to Bypass Federal Procurement Rules
According to the criminal complaint, Oxygen Forensics publicly portrayed itself as a U.S.-owned company headquartered in Alexandria, Virginia, with Reiber as its independent leader. However, the DOJ alleges that Russian-based executives, including Davydov, repeatedly overruled Reiber’s decisions despite his public role. The company allegedly misrepresented its ownership to U.S. government agencies including the Department of Defense, Department of Homeland Security, and the U.S. Secret Service to avoid scrutiny under federal acquisition regulations.
Impact of 2022 Sanctions Triggered Ownership Concealment
The scheme intensified following the expansion of U.S. sanctions against Russia in March 2022 after its invasion of Ukraine. In response, Oxygen Forensics installed Reiber as CEO and removed the true Russian owners from public corporate filings. Despite this, an unnamed co-conspirator referenced in the complaint stated that ‘fateful decisions will be made by’ the five shareholders, including Davydov, indicating continued Russian control behind the scenes.
Millions in Contracts Won After Sanctions
After the 2022 sanctions, Oxygen Forensics secured more than $2 million in contracts and purchases from U.S. government entities, including the U.S. Secret Service and its National Computer Forensics Institute (NCFI). The complaint notes that Reiber affirmed the company’s U.S. ownership as recently as February 2024 when dealing with the NCFI, even as internal communications showed he was aware of the need to conceal the firm’s true Russian ties.
Background: Allegations of Code Sharing and FSB Ties
Oxygen Forensics has faced prior scrutiny over its software’s origins. In 2023, the company was accused by competitors of using code reverse-engineered from Elcomsoft’s products in both its U.S. and Russian operations. The complaint highlights that Oxygen Russia’s clients included the Russian Federal Security Service (FSB), and Reiber reportedly worried that acknowledging this link would force disclosure that Oxygen US and Oxygen Russia shared the same software, development team, and ownership — information that, according to the complaint, would have changed procurement outcomes.
Government Officials Say They Would Have Rejected Contracts
The DOJ complaint includes statements from unnamed U.S. government procurement officials who asserted they would not have awarded or renewed contracts for Oxygen’s forensic software had they known the company was Russian-owned. This alleged deception, prosecutors argue, allowed the firm to exploit loopholes in federal vetting processes designed to prevent adversarial nations from gaining access to sensitive U.S. law enforcement and intelligence systems.
Civil Society Welcomes Action but Warns of Delayed Response
Natalia Krapiva, senior tech-legal counsel at Access Now, praised the DOJ’s move as overdue but necessary. ‘For years, civil society warned that Oxygen Forensics was owned and built from Russia. Now the Justice Department confirmed it,’ she told CyberScoop. She added that the same technology used to extract data in U.S. investigations has been deployed inside Russia to jail journalists, activists, and dissenters, emphasizing that the software’s use does not stop at national borders.
Call for Broad Sanctions and Investigations
Krapiva urged the U.S. and over 100 governments using Oxygen’s technology to immediately sever ties with the company, impose sanctions, and launch full investigations into how Russian-developed tools designed for the FSB ended up in sensitive Western law enforcement operations for years. The DOJ, in its announcement, clarified that the complaint does not allege the software contained malicious code or was used for unauthorized access to customer systems.
Court-appointed attorneys for Lee Reiber did not respond to requests for comment, and no legal representation for Oleg Davydov could be located at the time of reporting.
Source: CyberScoop