United States v. Mallory, Case No. 1:17–cr–154

268 F.Supp.3d 854

UNITED STATES of America

v.Kevin Patrick MALLORY, Defendant.

Case No. 1:17–cr–154

United States District Court, E.D. Virginia, Alexandria Division.

Signed July 7, 2017

John T. Gibbs, US Attorney's Office, Alexandria, VA, for Plaintiff.

Geremy C. Kamens, Todd M. Richman, Office of Federal Public Defender, Alexandria, VA, for Defendant.

ORDER

T. S. Ellis, III, United States District Judge

This prosecution for espionage came before the Court on the government's motion to revoke defendant's bond pending trial pursuant to 18 U.S.C. §§ 3142 and 3145.¹

At issue is whether there is any condition or combination of conditions (i) that can reasonably assure the defendant's appearance at trial, and (ii) that can reasonably assure the safety of the community.

I.

A.

The facts recited below are derived from the criminal complaint; the pretrial services report; the affidavit and testimony of Special Agent Stephen Green of the Federal Bureau of Investigation ("FBI"); the declaration of Information Review Officer Antoinette B. Shiner ("Officer Shiner") of the Central Intelligence Agency ("CIA"); the seven exhibits admitted at the hearings that took place on July 6 and 7, 2017, including a memorandum from the Deputy Director of the Defense Intelligence Agency ("DIA"); and the proffers of defense counsel.

The record establishes the following facts relating to defendant's personal history and characteristics.

• Defendant is a 60 year old male.

• He is a United States citizen.

• Defendant is married to a naturalized United States Citizen of Taiwanese descent and has six children, three of whom are the products of a previous marriage and one of whom is a minor residing in the family home.²

• Defendant has three living siblings and one half-sibling, all of whom reside in the United States. His parents are deceased.

• Defendant holds a Bachelor's degree in political science from Brigham Young University.

• Defendant is fluent in Mandarin Chinese.

• Defendant was an active duty military officer from 1981 to 1986.

• He was an Army reservist from 1986 to 2013.³

• Defendant was a Special Agent for the State Department Diplomatic Security Service from 1987 to 1990.

• Between 1990 and 1996, defendant was employed as a covert agent and case officer at the CIA.⁴

• Defendant was also employed by the DIA for an unidentified period of time.

• Defendant again worked for the CIA as a contractor from 2010 to 2012.⁵

• Defendant maintained a top secret security clearance throughout the majority of his career in government service, but his security clearance was terminated in 2012 after he left the CIA.

• Since 2013, defendant has operated his own consulting business, Global Ex.

• Defendant and his wife own a home in Loudoun County, Virginia; two vehicles, including a 1996 Toyota Avalon and 2000 Toyota LX 470; and have approximately $2,500 in cash and other investments.

• Defendant's home is currently under water, as the home is currently valued at $754,920 but defendant owes $850,000 on the mortgage. In addition, defendant is approximately five months in arrears on his home mortgage.

• Defendant has $50,000 in credit card debt.

• Defendant has at least one foreign bank account located in Hong Kong with a balance of at least $6,000.⁶

• Defendant has earned little to no income in the past two years and his wife is a school bus driver and earns approximately $9,000 per year.

The following factual allegations relate to defendant's purported commission of the crime of espionage:

• In February 2017, an alleged Chinese intelligence officer, who is identified in the criminal complaint as "PRO," purportedly contacted defendant on a social media website.⁷

• After this initial contact, defendant had several telephonic interviews or discussions with PRC2 and was ultimately introduced to PRC1, an employee of the Shanghai Academy of Social Sciences and an alleged intelligence agent for the People's Republic of China ("PRC" or "China").⁸

• PRC2 set up a meeting in China between defendant, PRC1 and PRC3, PRC1's boss.

• Defendant claims that before travelling to China he contacted two former co-workers at the CIA and requested that they facilitate a meeting with CIA officials.

• Defendant did not meet with any CIA official before travelling to China.

• On two occasions in March and April 2017, defendant flew to Shanghai, China and met with PRC1 and PRC2.

• Defendant claims that PRC1 and PRC2 wanted him to consult for the Shanghai Academy of Social Sciences and that while he was in China defendant drafted two "white papers" using publicly available information.

• Defendant claims he was paid $25,000 for his consulting services.

• Defendant reentered the United States on April 21, 2017, following a flight from Shanghai to Chicago. When asked on U.S. Customs and Border Patrol ("CBP") form 6059b whether he possessed more than $10,000 in U.S. currency, the defendant marked "no." After being stopped, interviewed and searched by CBP, however, defendant admitted to carrying $16,500 in cash.

• After this incident, defendant arranged several meetings with U.S. law enforcement agencies.

The following facts arise from events that occurred after defendant's return to the United States from China, including his meeting with FBI agents, his arrest and the search of his home:

• After returning from China, defendant again contacted a former co-worker at the CIA.

• This former co-worker scheduled a meeting with a CIA official on May 12, 2017.

• At the May 12, 2017 meeting, defendant told the CIA official that he had met with three individuals in Shanghai, China that he believed were Chinese intelligence officers. Defendant also stated that PRC1 had given him a cellphone and had trained him how to use it. Defendant did not have the cellphone with him during that May 12 meeting.

• Following the May 12 meeting, defendant agreed to another meeting and also agreed to allow agents of the U.S. government to inspect his phone.

• Defendant appeared at a meeting on May 24, 2017, expecting to meet with the same CIA official he had met with on May 12. When he arrived at the meeting, however, he was introduced to several FBI agents.

• At the May 24 meeting, defendant again expressed his belief that he had met with three Chinese intelligence officers. He told FBI agents that PRC1 and PRC3 had encouraged defendant to obtain employment with a United States government agency to obtain information.

• Defendant also confirmed that PRC1 had given him a cellphone and consented to FBI agents searching the device. In fact, defendant offered to show the FBI agents how the device transitioned from normal message mode to secure message mode.

• When doing this, however, defendant appeared surprised when he saw that some of the secure messages between defendant and PRC1 were still present on the device.

• Upon searching the device given to defendant by PRC1, FBI agents found four documents and a table of contents listing eight documents.

• A forensic analysis of the phone revealed that defendant had transmitted at least two of the documents to PRC1.

• Of the four documents found on the phone, three were CIA documents, one of which was classified as TOP SECRET at the time it was transmitted to PRC1 and the other two were classified as SECRET.

• In addition to uncovering several classified documents, FBI agents also recovered several text messages between defendant and PRC1.

? In a message sent on May 1, 2017, defendant stated, "Also, we may need to go again step by step in my getting the document to become part of the image. Then sending it to you." Doc. 2 ¶ 34.

? In a message sent on May 3, 2017, PRC1 and defendant discussed two documents "no 1 and no 2" which defendant had sent to PRC 1. Id. ¶ 36.

? During a May 3, 2017 communication with defendant, PRC1 wrote "I suggest you send all and retype the handwriting. And no 1 is obvious the first page of a complete article, where the else is and why it is black on top and bottom ... we will try our best to apply for another sum of amount, as you required. However, I'm not sure it will be the same amount for now and I will try, and for safety, we cannot send u in one time or in a short period altogether, need to figure out a better way." Id. ¶ 37.

? In a message sent on or about May 3, 2017, defendant responded, "The black was to cross out the security classification (TOP SECRET//ORCON//... I had to get it out without the chance of discovery. Unless read in detail, it appeared like a simple note ... I have arranged for a USD account in another name. You can send the funds broken into 4 equal payments over 4 consecutive days ... when you agree I will send you the bank e.g. instructions.... It was dicey (look it up) when they asked for me by name. If they we looking for me in terms of State Secrets, and found the SD card ..., we would not be talking today. I am taking the real risk as you, [PRC3], and higher up bosses know.... When you get the OK to replace prior payment, then I will send more docs. I will also type my notes. NOTE: In the future, I will destroy all electronic records after you confirm receipt... I already destroyed the paper records. I cannot keep these around, too dangerous." Id. ¶¶ 38–39.

? In a message dated May 5, 2017, defendant wrote to PRC1: "your object is to gain information, and my object is to be paid for [it]." PRC1 responded, "My current object is to make sure your security and try to reimburse you." Id. ¶ 40.

? In another message sent on or about May 5, 2017, defendant wrote: "I can also come in the middle of June. I can bring the remainder of the documents I have at that time." Id. ¶ 41.

• The FBI subsequently arrested defendant and searched his home.

• During that search, FBI agents found in defendant's home: (i) a Toshiba SD card that was crumpled up in a piece of tin foil; (ii) a packet of wigs, fake mustaches, adhesives, makeup, and a liquid that can give skin the appearance of scarring; (iii) evidence of defendant's foreign HSBC account in Hong Kong; and (iv)

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