Federal Security Contractor Indicted

After the Sept. 11 attacks, Russell Lee Ebersole and his dogs were hired to help protect the Federal Reserve Board and the State Department from terrorist attacks. But in the end, they didn’t pass the smell test.

Ebersole, 43, was indicted Friday for allegedly making a series of false statements in securing more than $700,000 in federal contracts for his bomb detection dog business, Detector Dogs Against Drugs and Explosives. Among other charges: His dogs and handlers flunked five explosives-detection tests, including one occasion when they failed to detect 50 pounds of TNT in a Federal Reserve parking facility.

The 28-count indictment, returned by a federal grand jury in Alexandria, Va., also alleges that he misrepresented his credentials and once inflated a bill for services rendered at the World Trade Center by about $10,000.

An employee at the company’s headquarters in Stephenson, Va., said Ebersole was unavailable and referred calls to his attorney, who didn’t return a telephone message. If convicted, Ebersole faces up to five years’ imprisonment on each count and a fine of about $1.4 million. He is due to be arraigned in Alexandria federal court next Friday.

The indictment shows the window of opportunity that opened up to entrepreneurs and profiteers after the Sept. 11 attacks. With demand for security services soaring, the government turned to private companies to shore up its defenses, and the demand for bomb-sniffing dogs soared.

“There was a big jump on it. People were thinking they could make quick money,” said Jim Watson, national secretary of the National Police Work Dog Assn., a Perry, Ohio, company. The government’s indictment charges that Ebersole represented to the Federal Emergency Management Agency that some of his employees were certified by the work-dog group, though Watson said his group only accredits people and dogs who work in public law enforcement.

Ebersole, according to his company’s Web site, is a third-generation kennel owner. A few years ago, he started diversifying, selling services to sweep for narcotics and firearms at schools, businesses and private homes.

“We’ll let you know if your kid is hanging out with the wrong crowd,” he once said in an interview with a national magazine. Business was brisk, and he began selling franchises to people from Florida to Washington, at least one of which is now suing him for fraud.

His entree into the federal government, the indictment indicates, started with a Pasadena firm called Intercon Security Services, which had been hired by the State Department to provide uniformed guard services. Intercon was in discussions with Ebersole when Sept. 11 hit; after that, the State Department “recognized an urgent need” for dog services, the indictment says, and Ebersole was put on the case, eventually hauling in more than $212,000 in fees.

Other lucrative contracts soon followed, with the likes of the Internal Revenue Service’s customer-service center in Fresno, one of the government’s main repositories for tax returns, and the Federal Reserve.

Seven months later, federal investigators became suspicious. In April, the Fed decided to launch a covert test of the DDADE dogs and handlers, sending vehicles containing 50 pounds of dynamite and 15 pounds of C-4, a plastic explosive used in the bombing of the U.S. destroyer Cole, into different driveway entrances at Fed headquarters.

“The DDADE dog teams failed to detect the explosives, and the vehicles were permitted to enter” Fed parking facilities, according to the indictment.

Later, the Justice Department’s Bureau of Alcohol, Tobacco and Firearms was called in to conduct testing of the six DDADE dogs on watch at the State Department, and they failed the sniff test, too.

“He makes a big issue about how all his handlers had 400 hours of classroom training,” said Pete Cheston, a former special forces soldier in Vietnam, who acquired a franchise from Ebersole a few years ago. “We were with him two years. We never got one hour.” He said the only training he received was being told “how to feed his dogs.”

Cheston said that he bid on work in New York after Sept. 11 and that Ebersole “went berserk.”

“He said there was money to be made here, and this was not our contract,” Cheston said. “He threatened to take our dog away and put us out of business.” Cheston subsequently filed suit against Ebersole in Frederick County, Md., state court, seeking the return of his $20,000 dog dealership fee, alleging that Ebersole sold franchises without registering with the state.

FEMA ended up terminating its relationship with the company within a matter of days, about the time Cheston told officials he could no longer work for them because he had lost trust in Ebersole.

Nonetheless, according to the indictment, Ebersole submitted -- and FEMA paid -- a bill for $11,500 to cover various “false expenses,” including health examinations for his dogs.