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A federal judge on Monday sentenced a former FBI counterintelligence agent to 10 years in a federal prison for scheming to defraud the U.S. government of tens of millions dollars through military contracts in Afghanistan.
Robert G. Lustyik Jr. was sentenced in Salt Lake City's U.S. District Court by Judge Tena Campbell, who was also expected to sentence two other men on Monday who were charged as defendants in the same scheme.
Lustyik, Michael L. Taylor and Johannes W. Thaler all pleaded guilty to separate indictments in 2013 and 2014.
Lustyik, who retired from the FBI in 2012 after 24 years of service, is the only one of the three to refuse to enter a plea agreement with federal prosecutors and faced the most prison time.
In Sept. 2014, he pleaded guilty to 11 felony counts, including conspiracy, fraud and obstruction of justice, and obstruction of a federal agency. He faces a prison term of five to 20 years and a fine of up to $250,000 on each count.
Lustyik pleaded guilty to all charges to avoid being forced to disclose classified information he developed during his tenure as an intelligence agent, his attorney Michael Langford of Boston, has said. He refused a plea agreement because he did not want to testify against Taylor and Thaler, his childhood friend.
In a sentencing memorandum to Campbell, Mansolillo calls Lustyik a "good man" who had "a long and distinguished career protecting this great country before he lost his moral compass and committed his crimes."
Court papers say Taylor, a former Green Beret, and Lustyik met in 2011, when the latter was still working for the FBI, and that they concocted a scheme to "make Lustyik wealthy beyond his dreams," if he could thwart a Utah grand jury inquiry into Taylor's business. The company, American International Security Corporation, or AISC, was being investigated for fraud and money laundering related to a $54 million Department of Defense contract to train Afghan commandos. About half of the total was obtained fraudulently and was distributed to participants through a web of shell companies and bank accounts, prosecutors say.
The investigation — and later the prosecutions of Lustyik, Taylor and Thaler — occurred in Utah because an AISC executive in Afghanistan who previously lived in southern Utah, told a St. George bank clerk he was making withdrawals of less than $10,000 so the bank would not have to report him to federal authorities.
Court papers say Taylor gave Lustyik the names of two federal agents working on the case, asking Lustyik to "reach out to them to convince them not to seek criminal charges," and promising millions and a job with ASIC following retirement from the FBI.
Prosecutor say Lustyik then engaged Taylor as a confidential FBI source and told prosecutors in Utah he was a valuable source as part of an effort to stall the investigation.
Needing insulation from Taylor and his bribes, Lustyik sought help from Thaler, who then served as conduit between the two men, Thaler solicited and accepted money from Taylor on Lustyik's behalf and passed information from Lustyik about developments in the criminal investigation of ASIC to Taylor, court documents say.
In Nov. 2103, Taylor, of Boston, pleaded guilty to one count of wire fraud. A sentencing memorandum filed last week, states that prosecutors have agreed that Taylor should only serve 24 months in federal prison and pay a $125,000 fine.
Thaler pleaded guilty to one count of conspiracy to commit bribery in Oct. 2014. Sentencing documents filed last week by Thaler's Rhode Island defense attorney state that federal prosecutors have agreed to recommend that an "appropriate" sentence in his case would be 13 months in prison and a $100 special assessment fee.
"Mr. Thaler's role in the offense was a limited one," his attorney wrote in the memo to the judge. "Mr. Thaler has accepted responsibility for this crime and wishes to express his deep remorse for his decisions."