Special Investigative Report: Buyer Beware! Texas firm under investigation amidst claims of fraudulent representation of commercial satellite imaging capabilities By Greg Thomason In a case involving the transfer of materials and invoices using mail delivery to allegedly defraud clients, the U.S. Postal Inspection Service has begun an investigation into the practices of the Psytep Corporation, headquartered in Corpus Christi, Texas. The Kansas City, Mo., office of the Postal Inspection Service is sorting through evidence that could prove Psytep Corporation and its employees fraudulently represented the commercial capabilities of satellite images Psytep claims it can access. In an affidavit in support of the search warrant presented to Psytep on Dec. 2, 1994, U.S. Postal Inspector C. A. Puett contends the company and its employees may have violated federal mail fraud statutes when selling services to the Kansas Bureau of Investigation (KBI). That affidavit, in part, states "that misrepresentations by Psytep have led the law enforcement agencies mentioned above, and others unknown, to engage in transactions via United States mail with Psytep for images obtained from satellites, and the alleged enhancement of the images, which experts in the field have told SAs (Special Agents) Brandau and Thomas are false and/or impossible to obtain." Initially contacted by KBI Special Agent Larry Thomas in March of 1994, Psytep was asked to do a data search to see if any satellite images existed that could establish the whereabouts of a murder suspect's car. Thomas believed this possible after reading an article in the Kansas City Star which cited use of satellite imagery by the Independence, Mo., Police Department. According to the Postal Inspection Service affidavit, Psytep's sales representative John Wood of Battle Creek, Mich., did nothing to dissuade Thomas' expectations. Psytep's Chief Executive Officer, Paul Caldwell calls much of what is contained in the Postal Inspection Service's affidavit a "misrepresentation." He said Psytep is "currently doing an independent investigation," adding, "We have no plans to stop what we are doing." Since being contacted by the KBI, Caldwell says he has cancelled all independent sales and marketing agreements and brought that function "in-house." A primary point of focus in Postal Inspector Puett's investigation centers on a telephone conversation between Thomas and Caldwell in which Caldwell, allegedly, led the KBI investigator to believe "he could enhance the satellite images to the 2 to 5 meter resolution. Such an enhancement would allow for the image to detail and distinguish between vehicles by size, such as car to truck, and persons could be distinguished from other objects in the enhanced image." According to the affidavit, Psytep had previously notified Thomas on May 23, 1994, by fax, that "two images were available...." Caldwell claims, "The jury is out with me on the affidavit. I don't think we over represented the JERS 1 image." On July 15, 1994, Special Agent Jeffery Brandau, and Geary County, Kan., Sheriff Bill Deppish visited Psytep's Corpus Christi offices. While there, "Caldwell told the officers he had obtained the image from a commercial satellite, JERS 1, a Japanese Space Agency satellite. He would have his computer enhancement technician, Chris Seigel, assist in the enhancement of the image," Puett claims. Specifications for JERS 1 show this satellite has a designed resolution of 18.3 meters by 24.2 meters. According to Roger Mitchell, vice president of program development for Earth Satellite Corp., "There's absolutely no way that you can get the same information from an 18.3 meter image that you would from a 2 to 5 meter resolution image. "Can't make things appear that aren't there in the original resolution," he concludes. Mitchell has worked with JERS 1 images for three years and was part of the principal investigating team reviewing JERS 1 for GEOSTAT. He notes the JERS 1 satellite is known to have an "optical flaw" that makes it impossible to accurately reproduce a three-band color image. According to Mitchell, this "effectively degrades it to 30 meter data if you are using all three bands. Because of this flaw, JERS 1 data is rarely used in the industry." Caldwell states he told investigators that 2 meter resolution is available. He is emphatic when he asserts, "Psytep absolutely has access to Russian satellite information," referencing the only commercially possible source for such high resolution satellite imagery. Yet, Caldwell says Psytep "informed KBI of the low probability of finding any images." Standard practice dictates, he claims, "always make sure the customer knows there is low probability-however possible," of finding data that is useful to criminal investigators. "This is simply a tool," Caldwell cites, "not a replacement for good investigative technique." According to Puett's record, Clark Nelson, corporate communications manager for Spot Image Corp. told Thomas "the best commercial satellite resolution is 10 meter." In a statement later provided to EOM, Nelson said, "Our imagery does not provide detail on the human scale. Nor can you identify individual details." He added, "We get inquiries all the time for [images of] human crime scenes. We don't oversell its (remote sensing) capabilities." This is consistent with information provided KBI Special Agent Brandau after contacting Robert D. Steele, president of Open Source Solutions Inc. (OSS). Headquartered in Oakton, Va., this nonprofit corporation is "dedicated to improving government and corporate exploitation of open sources of information-including commercial imagery." In Steele's reply to Brandau, he notes, "The probability of an image being available even at 10 meter resolution for a specific site at a specific time is so remote as to be insane to contemplate." Steele has had past dealings with Caldwell which he characterizes as "unfortunately true." In 1993, Caldwell made a presentation at an annual international symposium sponsored by OSS. Steele quickly adds, "I can state that Psytep was not involved at OSS '94 and will never be involved with OSS in the future." Another question raised in the affidavit involves the origin of the alleged JERS 1 image provided by Psytep to the KBI and the Geary County Sheriff's Department. Inquiries from news organizations concerned with the credibility of Psytep, led investigating officials to take the image to Kansas State University. There, Duane Nellis, associate dean in the College of Arts and Science and a professor in the geography department, determined the "photograph was taken from an airplane and not a satellite." Puett states that Nellis pointed out to Sheriff Deppish foliage on the trees and vegetation along a river appearing in the image. This was determined to be inconsistent with the December 22 crime date under investigation. Caldwell would not refute these claims. He says through Psytep's ongoing internal investigation, he is "looking into whether our processes...have made a mistake like this." In discussing the pending investigation against Psytep, Caldwell is unwavering in his claim that, "Whatever the challenges are, we are confident that this thing in Kansas is the result of misperceptions." He adds, "There have been no charges and [the Postal Inspection Service] even gave us all our stuff back." Furthermore, Caldwell points out, the five percent of overall business represented by Psytep's law enforcement and drug agency "query process" is too small to risk the remainder of his company's fortunes as a result of the activities enumerated by the Postal Inspection Service. Postal Inspector Puett takes issue with Caldwell's claim, "All of the seized items were not returned," he states. And, as of the first week of January 1995, "The investigation is still open." Should the evidence warrant, charges against Psytep will be filed through the U.S. Attorney's office in Kansas City, Mo. Puett said it would then be decided whether to handle the venue for prosecution through Texas (Psytep's state of incorporation) or in Kansas, the state of residency for the alleged victims. Back |