Lee Reiber, CEO of Virginia-based Oxygen Forensics, and Russian national Oleg Davydov were arrested on federal conspiracy charges after prosecutors alleged they concealed the firm’s Russian ownership and software development for years. The software, used by agencies like the U.S. Secret Service, was covertly controlled via a Cyprus holding company.
The Arrests and International Coordination
Federal authorities moved against the executives earlier this week, executing coordinated arrests on Sunday. Lee Reiber, 55, was taken into custody in Boise, Idaho, where he resides, according to statements from the U.S. Attorney’s Office for the Central District of California. He made his initial appearance in a federal court in Idaho before being released on bond, with an upcoming arraignment scheduled in Los Angeles.
Co-defendant Oleg Davydov, 52, of Moscow, met a different fate abroad. British authorities apprehended Davydov at London’s Heathrow Airport as he prepared to board a flight bound for Istanbul. U.S. prosecutors have confirmed that extradition proceedings will be initiated to bring Davydov to California to face charges. Both men are facing federal counts of conspiracy to commit wire fraud, an offense carrying a maximum potential sentence of 20 years behind bars.
Concealing Russian-Developed Software from U.S. Agencies
At the center of the indictment is Oxygen Forensics Inc., a digital forensics company based in Alexandria, Virginia. The firm specializes in software designed to extract, preserve, and analyze electronic data from smartphones and computers while maintaining the integrity of original files. These tools are heavily relied upon by domestic law enforcement and national security institutions.
According to the criminal complaint and related court documents, the affected customer agencies include the U.S. Department of War, Homeland Security Investigations, the U.S. Secret Service, and its National Computer Forensics Institute. For years, these agencies purchased software under the explicit assurance that Oxygen Forensics was independently owned and operated entirely within the United States.
Prosecutors allege that those certifications were fraudulent. Davydov and four other Russian nationals allegedly retained secret ownership and control of the Virginia firm through a holding company based in Cyprus. The underlying code was written and managed by a development team located inside Russia, directed by Davydov. Court records note that Davydov co-founded the original Russian entity—known until September 2022 as Oxygen Software LLC and subsequently as MKO Systems LLC—back in 2000. That Russian counterpart reportedly sold forensic tools to domestic Russian security services, including the FSB and the Ministry of Internal Affairs.
The 2022 Pivot and False Certifications
Operations shifted drastically following the geopolitical fallout of early 2022. In the wake of expanded U.S. sanctions imposed on Moscow after the invasion of Ukraine, the conspirators moved to scrub Russian ties from public view. Reiber was installed as CEO, president, and chairman of the board in March 2022, while the real Russian owners were systematically removed from public corporate filings.
Despite these cosmetic changes on paper, the underlying power structure remained intact. The Russian owners continued to dictate Reiber’s compensation, authorize corporate expenditures, and maintain signatory control over bank accounts. In December 2022 and October 2023, Reiber allegedly signed official paperwork declaring the company entirely free of foreign ownership or control. This documentation paved the way for Oxygen Forensics to secure lucrative federal business, including a five-year contract with a Secret Service training unit valued at up to $12 million awarded in 2024.
Internal communications cited by prosecutors underscore the acute awareness of the stakes involved. When a reporter inquired about the company’s Russian ties in late 2023, Reiber warned his partners that exposure “could destroy this entire opportunity” and that the existence of the company hung in the balance. Even as recently as March of this year, Reiber allegedly denied any foreign ownership during a recorded call with undercover agents posing as Homeland Security personnel.
Whistleblower Warnings and Cyber Infrastructure Seizures
The government’s case mirrors public allegations brought forward months prior by Max Weissberg, a former employee of Oxygen Forensics. Weissberg published a YouTube video in February detailing claims that the firm was secretly controlled by a Russian entity with close ties to the Kremlin and that all programmers operated inside Russia. Rather than addressing the claims internally, Oxygen Forensics responded by filing a defamation lawsuit against Weissberg in federal court in Virginia in August.
Federal investigators eventually corroborated the whistleblower’s assertions, leading to sweeping enforcement actions. On September 19, a federal magistrate judge issued seizure warrants. Law enforcement authorities moved swiftly the following day to seize corporate bank accounts, alongside roughly 57 web domains and related cyber infrastructure utilized by the enterprise. The Department of Commerce’s Bureau of Industry and Security led the investigation, receiving investigative support from the Department of War Office.
| Defendant | Role | Location of Arrest | Primary Charge |
|---|---|---|---|
| Lee Reiber | CEO, Oxygen Forensics Inc. | Boise, Idaho, U.S. | Conspiracy to Commit Wire Fraud |
| Oleg Davydov | CTO, MKO Systems / Co-founder | Heathrow Airport, London, U.K. | Conspiracy to Commit Wire Fraud |
The Broader Geopolitical Fallout
While the criminal complaint explicitly notes that prosecutors do not currently allege the software contained malicious code or unauthorized backdoors for data exfiltration, the case lays bare profound vulnerabilities in federal procurement vetting procedures.
