Crooks target National Security Agency

Intelligence agency repeatedly scammed

May 29, 2011|By Tricia Bishop, The Baltimore Sun

For 11 years, prosecutors say, William Turley and two of his children used their Maryland manufacturing business to brazenly bill nearly $1.5 million in overcharges to a single customer: the National Security Agency.

The scam, described in a federal indictment, seems a foolish venture; after all, the NSA is the intelligence agency that helped find Osama bin Laden. Even more surprising — the scam is not unique.

The Turleys, who all pleaded not guilty this month in Baltimore's U.S. District Court, are just the latest in a string of people prosecuted by the Maryland U.S. attorney's office for similar crimes involving non-classified work for the NSA, records show.

The year 2006 was particularly rough: At least nine people were defrauding the nation's chief secret-keeper in three separate schemes.

"If it wasn't so sad it would be very funny," said Matthew M. Aid, author of "The Secret Sentry: The Untold History of the National Security Agency."

"This stuff goes on all the time. NSA is just so awash in money, and it has so few people who actually know how to manage programs" that the agency becomes a target for crooks, he said.

Some analysts who study the NSA say the crimes, which involve basic fraud, rather than stealing secrets, are symptomatic of an organization that grew too fast after the terrorist attacks of Sept. 11, 2001, and has repeatedly failed to repair management problems.

But the NSA says scams are rare, and Maryland's U.S. attorney says that the agency's pursuit of such criminal cases could show that it is adequately hunting out fraud.

The Baltimore Sun identified 11 defendants accused within the past five years of bilking the agency. Nine of the cases were filed in the past two years, even though some of the alleged crimes reach back to the late 1990s and mid-2000s.

All of the defendants, except for the Turleys, pleaded guilty, and at least one of them, Wayne Schepens of Severna Park, still touts his NSA experience in an online bio for his Canton-based companies: WayneWright Strategy and WayneWright Construction.

"Wayne Schepens brings a long record of distinguished government service," his websites state, neglecting to mention that he pleaded guilty in 2007 to using his job as an NSA employee to steer $770,000 in government contracts to companies he and his wife owned. Schepens did not return a message seeking comment.

Maryland U.S. Attorney Rod J. Rosenstein said it's a "priority" to pursue contract cases where government agencies work with businesses. His office handles most NSA-related matters, because the agency is based at Fort Meade in Anne Arundel County.

Less clear is how people were able to cheat the NSA so easily and for so long, and why they would even want to — it puts them at risk of losing their security clearances, careers and reputations. For some, greed played a likely role, while one man, who declined to be quoted, said illness was the impetus — depression and alcoholism that made it impossible for him to work.

In a written statement to The Sun, spokeswoman Judith A. Emmel said, "NSA takes its fiduciary responsibility seriously and works diligently to ensure that appropriate action is taken when violations are suspected. … The actions of a very few do not represent or reflect on the diligent work and extraordinary accomplishments of the thousands of men and women who serve across the NSA/CSS [Central Security Service, the cryptology side of the intelligence organization]."

And Rosenstein said the spate of prosecutions, initiated by the NSA's Office of the Inspector General, could signal that the agency is "on the ball and actually policing" its contractors and employees, while other agencies may not be.

Still, some outsiders say that mismanagement is to blame for the criminal opportunities.

"That's my money they're giving away," said John E. Pike, a national security analyst and director of, an online clearinghouse for defense information. The NSA is funded with U.S. tax dollars. "The bottom line was, nobody was paying attention."

Funds flowed into the military and intelligence communities for years after the bin Laden-led terrorist attacks — something William "Bill" Turley noticed, according to a Sun story from 2002. He told a reporter that business at his $14 million family business, Bechdon Inc., was up about 20 percent because of defense-related orders.

And the NSA, whose budget is as secret as the information it gathers, was one of the big beneficiaries of funds. By 2007, its budget doubled to roughly $8 billion, according to a Baltimore Sun estimate that year, and some analysts say it has nearly doubled again since then.

"Their problem is how to get rid of all this money, so I could imagine a certain laziness crept in and nobody cared" how it was spent, Pike said. He said the agency may have hired inexperienced people who didn't know what contracts should cost, a situation ripe for abuse.

The NSA has been accused of mismanagement before.

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