- Associated Press - Monday, September 29, 2014

SALT LAKE CITY — A former FBI agent pleaded guilty Monday to charges that he derailed an investigation into military contract fraud by making a suspect appear to be a key counterintelligence source.

Retired agent Robert Lustyik Jr. pleaded guilty to 11 federal charges of fraud, conspiracy and obstruction of justice charges, said Lustyik’s attorney, Raymond Mansolillo.

Lustyik’s trial was scheduled to start Monday in federal court, but Mansolillo said his client pleaded guilty for personal and family reasons.

Lustyik, 52, wouldn’t accept a plea deal because he didn’t want to implicate anyone else, Mansolillo said. No sentencing date has been scheduled.

Federal prosecutors say Lustyik agreed to derail a Utah-based investigation into a company started by former soldiers. The company was accused of using insider information to win $54 million in bloated government contracts to supply Afghan troops.

In exchange for a cut of the multimillion-dollar business, Lustyik promised to “blow the doors off” the investigation, prosecutors said.

Lustyik attempted to shield the company’s chief, Michael Taylor, by assembling a dossier of fabricated interviews with former federal agents and prosecutors, according to court documents. He also told a Utah-based FBI agent that Taylor helped officials capture a significant terrorist.

Utah authorities began investigating after one of Taylor’s associates made several cash withdrawals from a St. George credit union that were just shy of a $10,000 federal reporting limit.

Lustyik received $200,000 in cash in addition to money that purportedly was for his child’s medical bills. In return, Lustyik interfered with witnesses in the federal investigation, records said.

He believed his career in law enforcement was poised to provide a big payoff in 2012 when offered $1 million as a gift to a friend, the charges 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.”

Johannes Thaler, a childhood friend, is charged with acting as a messenger in the case against Lustyik and Taylor. Thaler has pleaded not guilty, and his trial started Monday in Utah.

Taylor and two former soldiers involved in the company pleaded guilty 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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