Ex-Homeland Security Watchdog Indicted In Fraud, Theft Scheme

SILVER SPRING, MD — A former acting inspector general for the U.S. Department of Homeland Security and a former subordinate have been indicted in a scheme to steal government software and databases so they could sell an enhanced version to the U.S. Department of Agriculture, prosecutors said.

Charles K. Edwards, 59, of Sandy Spring, Maryland, and Murali Yamazula Venkata, a 54-year-old former subordinate from Aldie, Virginia, were taken into custody after being named in a 16-count indictment returned by a federal grand jury in Washington, D.C., on Thursday.

The indictment charges Edwards and Venkata with conspiracy to commit theft of government property and to defraud the United States, theft of government property, wire fraud, and aggravated identity theft, the Justice Department said. Venkata was also charged with destruction of records.

Prosecutors allege that from October 2014 to April 2017, Edwards, Venkata and others took part in a scheme to defraud the federal government by stealing proprietary software — along with databases containing personally identifiable information of DHS and Postal Service employees —from the DHS inspector general's office so that Edwards' company, Delta Business Solutions, could "sell an enhanced version" of the software to the Agriculture Department inspector general's office.

Although Edwards — who worked under the President Barack Obama administration — left DHS in December 2013, "he continued to leverage his relationship with Venkata" and other DHS employees to steal the software and sensitive government databases, the Justice Department said.

Prosecutors further allege that Venkata and others helped Edwards by reconfiguring his laptop so he could upload the stolen software and databases and build a testing server at his home.

They also allege that Edwards also retained software developers from India for the purpose of developing his commercial alternative of DHS' stolen software.

By doing this, Edwards not only shared the proprietary software with foreign nationals but also the personally identifiable information of federal employees and people implicated in DHS and Postal Service investigations, the Justice Department said.

Edwards and Venkata face fines and a mandatory minimum sentence of two years on the aggravated identity theft charges. According to officials, the pair also face up to five years on the conspiracy to commit theft of government property charge, 10 years on the theft of government property charge, and 20 years on the wire fraud charges.

In addition, Venkata faces a maximum sentence of 20 years on the destruction of records charge.