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Ex-FBI agent goes on trial for interference

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Ex-FBI agent goes on trial for interference

By Lindsay Whitehurst, Associated Press | Posted - Sep. 28, 2014 at 12:10 p.m.


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SALT LAKE CITY (AP) — A former FBI agent is slated to go on trial in Salt Lake City on Monday accused of trying to thwart an investigation into military contract fraud by making a suspect look like a valuable counterintelligence source.

Federal prosecutors say retired agent Robert Lustyik Jr. agreed to derail a Utah-based investigation into a company started by former soldiers. They were accused of using insider information to win $54 million worth of inflated contracts to supply Afghan troops.

Lustyik, 52, has pleaded not guilty to charges that he promised to "blow the doors off" the investigation in exchange for a share in the multimillion-dollar business.

Lustyik tried to shield the company's chief, Michael Taylor, by creating a dossier of staged interviews with former government agents and prosecutors, according to court documents, and told a Utah FBI agent that Taylor had helped in the capture of a significant terrorist.

"I will not stop in my attempt to sway this your way," he told Taylor in an email, saying he would "crush" the Utah case agent, documents state.

Utah authorities started investigating after an associate of Taylor's made a series of cash withdrawals from a St. George credit union just under the federal reporting limit of $10,000.

In exchange for $200,000 in cash and money purportedly for his child's medical expenses, Lustyik also tried to contact witnesses in the investigation, records say. He appeared convinced his lifetime in law enforcement was about to pay off in 2012 when he offered $1 million to a friend as a gift, court records state.

"I've made us all stinking rich!!!" Lustyik wrote the friend, according to an email intercepted by the government. "For 30 years I've sacrificed to get to this point."

Lustyik has pleaded not guilty to fraud, conspiracy and obstruction of justice charges. His attorney did not return messages seeking comment Friday, but the defense has said snippets of emails don't tell the whole story.

A childhood friend, Johannes Thaler, is charged with acting as a messenger between Lustyik and Taylor. He has pleaded not guilty.

Taylor and two former soldiers pleaded guilty in the scheme last year.

Lustyik, who retired in 2012 from his post in White Plains, New York, is also facing charges in New York alleging that he and Thaler sold confidential information to someone who wanted to harm a prominent citizen of Bangladesh. Both men have pleaded not guilty in that case.

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