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A former FBI counter-intelligence agent suddenly reversed course and pleaded guilty on Monday just as a trial was to begin on charges he accepted money and promises of riches in return for trying to derail an investigation into fraud on a military contract in Afghanistan worth tens of millions of dollars.
Robert G. Lustyik Jr., 52, of Sleepy Hollow, N.Y., pleaded guilty to all 11 counts of an indictment handed up in 2012 that charged he and two others with conspiracy, fraud and obstruction of justice, and obstruction of a federal agency.
Lustyik, who retired in September 2012 after 24 years with the FBI, faced five to 20 years in prison on each of the charges and fines of up to $250,000 per charge. No sentencing date was set.
The plea came just four days after a decision by U.S. District Judge Tena Campbell, who said Lustyik could not use classified documents and testimony at trial about his supposed covert activity with another defendant in the case, Michael L. Taylor of Boston, a former Green Beret and owner of the American International Security Corp.
Taylor pleaded guilty in November 2013 to one count of wire fraud and admitted he had bribed Lustyik to get him to derail an investigation into a contract American International Security received that was ultimately worth $54 million 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, according to an indictment in August 2012.
After Taylor made him promises of employment at a lucrative salary and a share of other deals, Lustyik engaged Taylor as a confidential FBI source; he then told prosecutors in Utah that Taylor was a valuable source as part of an effort to stall the investigation, Taylor said in court papers as part of his plea deal. He agreed to two concurrent two-year prison sentences.
Campbell ruled last week, however, that presenting evidence on Taylor's value as a source using confidential information was not relevant to the defense case and would "create a sideshow that would waste time and substantially risk confusing the jury."
After Lustyik's sudden guilty plea, Campbell started the process of selecting a jury in the trial of a fellow defendant, Johannes W. Thaler.
Lustyik's attorney, Ray Mansolillo of Boston, said his client pleaded guilty right before trial because he wanted to spare his family and didn't want to have to disclose information he developed as an intelligence agent.
"He was a patriot and is a patriot," said Mansolillo.
Lustyik did not agree to a deal with prosecutors before pleading guilty because he refused to testify against Thaler, the attorney said.
Government prosecutors wanted Lustyik to admit that he conspired specifically with Taylor and Thaler, but his client refused, Mansolillo said.
Thaler was a childhood friend of Lustyik, who allegedly helped facilitate transactions between Taylor and Lustyik.
The cases ended up in federal court in Salt Lake City because another man, Christopher Harris, American International Security's head in Afghanistan who once lived in southern Utah, came under scrutiny after he told a clerk at a St. George bank that he was making regular withdrawals of under $10,000 so the bank didn't have to report him to federal authorities.
Harris was sentenced in June to 2 years in prison for his guilty pleas to conspiracy and money laundering in the contract case. David Young of Hernando County, Florida, a former special forces officer, was sentenced to 3½ years in prison for providing confidential bid information in exchange for payments that helped American International Security win the lucrative contract.
Taylor is awaiting formal sentencing.