Updates to our Terms of Use

We are updating our Terms of Use. Please carefully review the updated Terms before proceeding to our website.

Wednesday, July 24, 2024 | Back issues
Courthouse News Service Courthouse News Service

‘The man who conned the Pentagon’ can’t pursue lawsuit against FBI for raiding home, Ninth Circuit rules

An appellate panel ruled that Dennis and Brenda Montgomery's lawsuit stemming from a 2006 raid of their Reno, Nevada, home by federal agents looking for classified documents that they didn't find is past the statue of limitations.

(CN) — A Ninth Circuit panel agreed with a lower court’s ruling that a Nevadan dubbed "the man who conned the Pentagon" by Playboy magazine in 2010 and his wife can’t pursue a lawsuit against an FBI agent who participated in a raid on their home and storage units because they missed the statute of limitations.    

In the mid-2000s, Dennis Montgomery, a former confidential informant to Arizona's Maricopa County Sheriff's Office turned computer programmer who contracted with the CIA, Air Force and White House, was accused by his co-workers of stealing source code and hardware, including “nine ‘secret’ hard drives” that they alleged had classified national defense information of Predator drone footage used by the company Montgomery co-founded, called eTreppid, to develop software for use in the war on terror.  

The FBI then started to investigate Montgomery based on the claims he had classified documents. In 2006, the FBI, IRS and Drug Enforcement Administration raided his home in Reno, where, according to a lawsuit filed with his wife Brenda in federal court in 2021, he claimed federal law enforcement lied to and threatened his kids, and that the raid was based on a false affidavit that violated his constitutional rights.

Montgomery's suit was brought against one of the FBI agents involved in the raid, and other federal law enforcement agents. 

A magistrate judge agreed with the couple, and found that the raid was unlawful and the government didn’t have probable cause for it because none of the information taken from their house turned out to be classified, and the civil litigation case over trade secrets was not disclosed to the court.    

The government then invoked state secrets privileges to seal some of the information in the affidavits of probable cause submitted in support of the search warrants,  

John Negroponte, the former Director of National Intelligence, added a declaration to prevent the release of any testimony or evidence relating to “any connection between the United States intelligence community and individuals associated with the trade secrets litigation or any interest of the United States intelligence community in the technologies in question,” according to U.S. District Judge Judge Anne R. Traum, a Biden appointee, in her ruling

Traum dismissed the case because the Montgomerys filed it long after the statute of limitations had expired.  

The Montgomerys claimed that Negroponte’s declaration of the protective order acted as a gag order preventing them from filling earlier. 

Traum dismissed that argument, too. A Ninth Circuit panel of judges agreed with Traum on Wednesday.  

“Here, the operative events occurred in March 2006 at the Montgomerys’ property in Nevada," the panel wrote in their order. "Nevada’s personal injury statute of limitations is two years. The statute of limitations began accruing in March 2006 when the agents raided the Montgomerys’ property, so the statute expired in March 2008. The Montgomerys filed this Bivens claim on March 11, 2021, so they missed the deadline by thirteen years. Thus, the district court properly deemed their claim time barred.”

The Montgomerys’ equitable tolling claim, essentially asking the court to not prevent them from bringing the suit if they can prove extraordinary circumstances prevented them from filing on time, didn’t work with Traum or the Ninth Circuit panel because they couldn’t prove that the government’s protective order or Negroponte’s declaration did amount to a gag order that prevented them from filing their suit on time.     

John Doubek, the Montgomerys’ attorney, referred to the protective order as a “you better be quiet order” that the government would threaten Dennis with if he tried to do anything in court. 

“And so every time he tried to do anything he couldn’t say anything, and then the court would fault him for not speaking up,” Doubek said. 

Asked if the Montgomerys would pursue the case further, Doubek said “If Sid says no go, it’s probably a no go.”

Sid is Sidney R. Thomas, a senior U.S. circuit judge on the Ninth Circuit who was appointed by Clinton. U.S. Circuit Judge Patrick J. Bumatay, a Trump appointee, and Senior U.S. District Judge Richard D. Bennett, a George W. Bush appointee, rounded out the panel.   

The Department of Justice did not immediately respond to a request for comment.

Dennis Montgomery was given the moniker "the man who conned the Pentagon" by Playboy because of his involvement in schemes to convince the George W. Bush administration and the national security apparatus to take action to prevent elaborate conspiracy theories. 

"Montgomery was the maestro behind what many current and former U.S. officials and others familiar with the case now believe was one of the most elaborate and dangerous hoaxes in American history, a ruse that was so successful that it nearly convinced the Bush administration to order fighter jets to start shooting down commercial airliners filled with passengers over the Atlantic," wrote James Risen in his book “Pay Any Price."

One of Montgomery's contracts sold the CIA on the idea that al-Qaida embedded coded messages for future terrorist attacks in the Qatari-based news outlet Al Jazeera's broadcasts.

Risen reported that this "fantasy" inspired the Bush administration to ground multiple international flights before Christmas 2003, and that senior CIA officials went to the White House a week after the holiday for a "brief but serious discussion about whether to shoot down commercial airliners over the Atlantic based on the intelligence."

Montgomery disputed this history and stood by the technology in a defamation lawsuit against Risen. 

U.S. District Judge Rudolph Contreras, an Obama appointee, dismissed the case based on Montgomery's refusal to let Risen's legal team access a copy of the software.

Categories / Appeals, Government, National

Subscribe to Closing Arguments

Sign up for new weekly newsletter Closing Arguments to get the latest about ongoing trials, major litigation and hot cases and rulings in courthouses around the U.S. and the world.