Former CIA official pleads guilty to wire fraud in gold bar scheme

Filing says Rush directed $145M to holding company for Florida properties

Former senior CIA official David J Rush pleaded guilty on Tuesday in Alexandria, 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 tens of millions of dollars, according to court records.

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 Tuesday court filing. He separately concocted a bogus “sensitive government activity” to obtain the gold bars, the filing also said.

Prosecutors also accused Rush of lying to colleagues and government contractors about his military and academic credentials and the fabricated program, 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 said.

The single count of wire fraud to which Rush pleaded guilty was entered during a hearing in Alexandria, court records show. U.S. District Judge Michael Nachmanoff is scheduled to sentence Rush on 28 January.

Several months before the plea, Rush attempted to fraudulently authorize the release of $100 million from a government contract, according to Tuesday’s filing. He directed someone 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 said.

In earlier court filings, prosecutors said Rush had stashed more than $40 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 honorably discharged from the U.S. Navy in 2015.

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 held without bond after his initial court appearance earlier this year.

During a hearing in June, defense attorney Jessica Carmichael said Rush was not charged initially with any crimes tied to the discovery of the gold bars, which she referred to as “basically a non-issue” 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.

Authorities said Rush also 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 did not serve as a Navy pilot and did not attend either school. Rush enlisted in the Navy in 1997 and was honorably discharged from the Navy reserves as a lieutenant in 2015, according to the FBI affidavit.