Marco Rubio handed a fresh deal to a scandal-hit tech company months after officials were first warned about its Kremlin links.
Prosecutors have charged Oxygen Forensics’ CEO Lee Reiber with “concealing from U.S. government agencies” that his company was “owned and controlled” by Russians, the Justice Department announced last week.
It came after claims about the firm’s ties to Putin circulated around federal agencies for months. U.S. officials were alarmed that such a firm supplied phone-hacking software to federal departments, law enforcement, and national security agencies.
Despite the repeated warnings, the State Department gave them a new contract—on the same day Oxygen filed a lawsuit against the former employee who publicly raised the issue.
The $50,000 deal was reached on Aug. 28, while Oxygen was suing Max Weissberg for more than $1.85 million in damages, according to PunchUp, the Daily Beast’s sister Substack.
Weissberg began publicly airing his claims in late February, posting on LinkedIn and Reddit while contacting Oxygen’s employees and customers directly. He later released a 15-minute YouTube video in June, claiming the company was secretly Russian-owned, had links to the FSB, and had duped U.S. law enforcement agencies into buying software developed in Russia.
The group flatly denied Weissberg’s allegations in its August lawsuit and asked the court to stop him from repeating them, court filings show. It said multiple government customers had contacted the firm about Weissberg from as early as Feb. 23, and that a document had started circulating inside DHS and other agencies.
The State Department awarded Oxygen the new $50,000 contract through the U.S. Embassy in Zagreb, Croatia, according to federal procurement data. The deal, which runs until September 2027, was for software for a Justice Department program that trains and advises foreign law-enforcement agencies, and was awarded without competition.
PunchUp asked the State Department whether it knew of concerns among other federal departments and agencies over Weissberg’s claims about Oxygen’s true ownership when it awarded the August contract, and if not, why.
A spokesperson for the department said only that it is “aware” of the allegations against Oxygen, and that it “takes seriously the security of its systems and the integrity of its procurement processes.” It referred further questions to the DOJ.
Authorities detained Reiber, 55, in Idaho on Sept. 20 at around the same time as Sergeyevich Davydov, 52, one of the Russian nationals allegedly behind the group, was arrested at London Heathrow Airport in the U.K. Reiber has since been released on bail.
Both men face charges of conspiracy to commit wire fraud over Oxygen’s dealings with the Defense Department and agencies within the Department of Homeland Security, including the Secret Service, Homeland Security Investigations, its Office of Inspector General, and the National Computer Forensics Institute. The U.S. is expected to request Davydov’s extradition.
Prosecutors accuse Oxygen of pretending to be an “independent, U.S.-based company” when it was, in fact, owned and controlled by Davydov and four others through a holding company in Cyprus. They allegedly concealed their ownership of the firm after the U.S. imposed sanctions in response to President Vladimir Putin’s full-scale invasion of Ukraine in 2022.
The five Russians allegedly continued throughout that period to provide digital forensics technology to Kremlin customers, including the Russian Investigative Committee, the Ministry of Internal Affairs, and the Federal Security Service (FSB), the successor to the KGB. PunchUp has contacted Oxygen’s lawyers for comment on those claims.
Federal records had already classified Oxygen as a foreign-owned U.S. company two years earlier, identifying Cyprus-based Oxygen Forensics Limited as its immediate owner. The group had also previously worked with State, under a $180,000 contract awarded in May of last year.
Tom Latchem exposes the secrets, scandals, and stories that powerful people and institutions want to keep under wraps. Follow all of his reporting at PunchUp on Substack.
