The Virgin Islands government doesn’t owe Mon Ethos Pro Support anything after it prevailed in a lawsuit against the cybersecurity firm over the return of equipment and data it held under a contract with the V.I. Police Department, the V.I. Justice Department said in a court filing Tuesday.
The DOJ voluntarily dismissed the civil action against Mon Ethos and its founder David Whitaker on Aug. 27 after the property was returned. It included 54 electronic devices and the VIPD’s GrayKey — an electronic device used to unlock and retrieve data from other electronic devices — that the government said the company had been “holding hostage” in return for $479,795 it said it was owed.
That same day, Mon Ethos filed a motion for $44,820 in costs and attorneys’ fees, calling the government’s claims “entirely frivolous” and alleging that the DOJ dismissed the complaint rather than respond to Mon Ethos’s earlier motion to dismiss and award attorneys’ fees, filed Aug. 6, within the 20 days allotted by the court.
On Tuesday, the DOJ said it was Mon Ethos’s conduct that led to unnecessary legal expenses and also noted that Whitaker — who quietly transferred the company to new ownership in April — has entered a plea agreement with the federal government over fraudulent activities related to his contract with the VIPD through a Mon Ethos subsidiary called the Office of Data Discovery Forensic Analysis, or ODDFA, that was registered in June 2022.
“The U.S. Virgin Islands is a victim of Whitaker and Mon Ethos’s antics, as the plea agreement appears to acknowledge,” the DOJ said.
Whitaker has admitted to two counts of wire fraud and one count of bribery concerning programs receiving federal funds in the plea deal with prosecutors that was reached in March and unsealed on Thursday in V.I. District Court.
“He admitted to knowingly devise a scheme to defraud or to obtain money or property through materially false or false representations. Additionally, Whitaker confessed to paying bribes to secure payments and additional contracts with VIPD, highlighting the fraudulent nature of his actions and supporting the allegations in the USVI’s complaint,” the DOJ said in Tuesday’s filing.
The V.I. government alleged in its civil complaint that Mon Ethos demanded payment of $479,795 on June 15 for work done over the previous three months “and threatened that data would be ‘lost’ if payment was not immediately remitted.” It was around the same time that the FBI announced that Police Commissioner Ray Martinez and Office of Management and Budget Director Jenifer O’Neal were the targets of a federal investigation regarding the government’s contract with Mon Ethos. Within days, both officials had resigned.
According to Whitaker’s plea agreement, his bribery charge concerns money and favors he gave to a VIPD official identified as “Public Official One” in return for payment of outstanding invoices under his cybersecurity contracts with the department.
One wire fraud charge stems from 12 surveillance devices Whitaker claimed to have found in V.I. government offices in a sweep he was hired to conduct in 2022 after a miniature spy camera was discovered at the Division of Personnel. In fact, he had planted them, according to the plea deal. He then billed the VIPD $130,195.10 for his “work.”
The other wire fraud charge concerns false statements Whitaker made to the Small Business Administration to secure a potentially forgivable Paycheck Protection Program loan for $469,903 in February 2021, it said. The PPP was meant to help small businesses keep their workforces employed during the COVID-19 pandemic.
“The criminal case highlights that Mon Ethos had little chance of succeeding in the civil action. With the revelations about Whitaker’s felony record and the admitted illegal activities involved in getting invoices approved through a scheme with other individuals, any work product from Mon Ethos would have been inadmissible in a criminal case. Furthermore, Mon Ethos had no realistic prospect of prevailing in any attempt to recoup the invoices,” the DOJ said Tuesday.
Moreover, the government faced one roadblock after another when it tried to retrieve the property from Mon Ethos that included evidence for homicides and other major crimes when just handing it over could have prevented the entire case and saved time, it said.
“Now, Mon Ethos claims that over a span of approximately three weeks (73.2 hours), it incurred $44,820.00 in fees and costs. This amount was accrued despite Mon Ethos only needing to comply with the government’s initial requests prior to the lawsuit, and despite its own obstructions and delays in doing so,” the DOJ said in rejecting the motion for payment.
A pre-sentence investigation in Whitaker’s federal case is underway and a sentencing date has not been set. However, according to the plea agreement, the bribery count carries a maximum of 10 years in prison and the wire fraud charges up to 20 years behind bars. Each charge also carries a $250,000 fine. Whitaker could also have to pay the government anywhere from $196,195 to a maximum of $666,098 if it is unable to recover the proceeds of his crimes, the deal states.
Public spending records reveal that the V.I. government has paid $3.31 million to Mon Ethos since August 2022, including $1.7 million from the Office of Management and Budget and $1.5 million from the V.I. Police Department. The company also signed a contract with the V.I. Education Department for $1.9 million on Feb. 28 for security systems and surveillance at 11 campuses in the St. Croix district.
That contract was cancelled on Friday, prompting Curtis Jones, the new owner of Mon Ethos, to complain that the company is being punished for the actions of Whitaker.
“MEPSVI is not its founder,” Jones said in a written statement. “The current owner and employees of MEPSVI have invested their own money—including paying out of pocket for necessary equipment like surveillance cameras—due to delays in payments from government agencies, yet they have continued to deliver essential security and forensic services for the Virgin Islands.”
