On September 30, 2014, Robert Lustyik entered a guilty plea in connection with alleged grand jury tampering and obstruction of justice. Mr. Lustyik has been charged with interfering with the investigation of his alleged business partner, Michael Taylor.
In return for this help, Mr. Taylor promised Mr. Lustyik a large sum of money and a stream of lucrative future business contracts. Before completing the alleged scheme, however, Mr. Lustyik was arrested. Mr. Lustyik pleaded guilty to an 11-count indictment charging conspiracy, honest services wire fraud, obstruction of a grand jury proceeding, and obstruction of an agency proceeding.
Sounds pretty hum-drum until you hear what Mr. Lustyik does for a living.
Mr. Lustyik is a former FBI counterintelligence special agent and 20-year FBI veteran.
The Investigation into Mr. Taylor
Mr. Lustyik might never have gotten into trouble if the Defense Contract Investigative Services (DCIS) had not been looking into suspicious financial activity associated with Mr. Taylor’s corporation.
In 2007, Mr. Taylor was a manager at the American International Security Corporation (AISC). According to the government’s indictment filed against Mr. Taylor, an AISC employee stored several million dollars in illicit funds in a secret bank account. The resulting financial irregularities attracted the attention of DCIS agents.
In 2012, after a lengthy investigation, the DCIS arrested Mr. Taylor in connection with a $54 million military training contract in Afghanistan. The 72-count indictment charged Mr. Taylor with bribing Department of Defense officials, money laundering, and wire fraud.
Mr. Lustyik’s Alleged Involvement
Mr. Taylor supposedly then turned to Mr. Lustyik for help. The government’s indictment against Mr. Lustyik states that the two men had a business relationship. When Mr. Taylor was arrested, he allegedly offered Mr. Lustyik a payment of $200,000 and the promise of future multi-million-dollar business deals in return for his freedom.
At a U.S. District Court hearing in Mr. Taylor’s case, the prosecutor quoted Mr. Taylor as telling Mr. Lustyik,
If they don’t put me in jail, I’ll make you filthy, stinkin’ rich.
(Note: there was no written plea agreement on the docket, so it is not entirely clear what facts Mr. Lustyik agreed to during the plea.)
Mr. Lustyik seems to have been won over by Mr. Taylor’s offer. According to the government’s indictment, Mr. Lustyik took several steps to help Mr. Taylor:
- designated Mr. Taylor a confidential FBI source to prevent Mr. Taylor from facing prosecution
- interviewed witnesses involved in the Utah-based investigation of Mr. Taylor’s activities.
- sent Utah investigators and prosecutors text messages and made telephone calls to prevent them from pursuing Mr. Taylor.
Mr. Lustyik’s alleged calls were of no use; the damage was done. The DCIS investigation was already underway.
While reviewing a number of emails seized from Mr. Taylor’s email account, a special agent discovered correspondence between Mr. Taylor and Mr. Lustyik. The email conversations seemed to show that the two men entered into a number of defense contracts together dating back to June of 2011.
Together, they apparently helped provide the Department of Defense with security, electricity, and energy development programs in African and the Middle East. The special agent, believing this was improper behavior for an FBI special agent, escalated the issue. He turned the emails over to the DOJ, who promptly began an investigation into Mr. Lustyik’s conduct. On October 18, 2013, a Utah grand jury returned an indictment against Mr. Lustyik for conspiracy, wire fraud, and obstruction of justice.
Attempted (and Failed) Motion to Suppress
Mr. Lustyik did not submit without a fight. The majority of the government’s evidence was in the form of email conversations. Sensing this, Mr. Lustyik’s savvy attorneys attacked the search warrants. Mr. Lustyik submitted a motion to suppress the emails on grounds that (1) the search warrants themselves were overbroad, and (2) that the searching officers disregarded the scope of their warrants, which resulted in unconstitutional “general rummaging.”
The Utah district judge who heard the motions was not especially moved by Mr. Lustyik’s lawyer’s arguments. The judge found that the searches were constitutional both in scope and execution. The judge did exclude emails that were not marked relevant within 24 hours of first review. The government, however, had already voluntarily agreed to withhold those emails.
Guilty Plea and Sentencing
Faced with what appeared to be a formidable collection of evidence, Mr. Lustyik pleaded guilty. His sentencing hearing is scheduled for January 5, 2015.
This isn’t a ground-breaking case by any stretch. But it is an interesting view into the powers given to an FBI agent to protect someone. This time it didn’t work. We have to wonder, though, how many times in the past has an agent helped a friend, or a business partner, or someone willing to pay a bribe? Conversely, has an agent taken improper steps to encourage an AUSA to bring an indictment? What policies and practices exist to prevent this from happening in the future?