SALT LAKE CITY (CN) - A former FBI agent and his conspirator pleaded guilty in Utah to scheming to obstruct a grand jury investigation into a defense contractor who promised them multimillion-dollar business contracts.
Robert Lustyik Jr., a 24-year veteran of the FBI, pleaded guilty to an 11-count indictment charging him with conspiracy, eight counts of honest services wire fraud, obstruction of a grand jury proceeding, and obstruction of an agency proceeding.
Lustyik, 51, of Sleepy Hollow, N.Y., was charged in 2012 along with Michael Taylor, 52, the principal of Boston-based American International Security Corporation, and Johannes Thaler, 50.
Beginning in June 2011, the men pushed contracts for security services, electric power and energy development in the Middle East and Africa.
Taylor, of Harvard, Mass., allegedly learned in September 2011 that he was the subject of a federal criminal investigation, launched a year earlier in Utah, concerning a Defense Department contract.
Prosecutors said Taylor offered Lustyik $200,000 in cash and a share in the proceeds of several anticipated contracts, worth millions of dollars, for the agent's promise to impair and impede the investigation.
Thaler, Lustyik's childhood friend, of New Fairfield, Conn., allegedly passed along information and payments.
Taylor and Thayer used an email "dead drop" to avoid leaving a record of their interactions, and used the names of football teams and nicknames as part of their coded communications.
Lustyik also designated Taylor as an FBI confidential source, texted and called investigators and prosecutors to dissuade them from charging Taylor, and attempted to interview potential witnesses and targets in the Utah investigation, officials said.
Thaler pleaded guilty Wednesday to conspiracy to commit bribery, obstruction of a grand jury proceeding and obstruction of an agency proceeding.
According to court documents, while Lustyik was obstructing the investigation into Taylor, he suggested that Thaler "blatantly" ask Taylor for money, emphasizing, "he knows we are keeping him outta jail."
Lustyik separately told Thaler that on a trip to meet Taylor in Lebanon: "Taylor is gonna hand you cash in Lebanon ... [l]ike 150 Gs." When Thaler asked Lustyik how he should bring the cash back to the United States, Lustyik allegedly said, "[I]n your pants. Or wire it? They won't stop 2 white guys at customs without a reason, [o]r I meet you at customs at JFK and cred you in."
Lustyik and Thaler acknowledged that Taylor was most likely guilty, documents add, but boasted about their success in using Lustyik's position to obstruct the investigation into Taylor.
Lustyik also texted Thaler: "at this point IF he is indicted there is NO WAY he gets convicted even though he Prob did it." He added: "I think we are rich by Christmas!!"
Taylor pleaded guilty in Utah in 2013 to honest services wire fraud for his role in the scheme.
Federal prosecutors said Wednesday after the guilty pleas were accepted by U.S. District Judge Tena Campbell: "These plea agreements demonstrate that federal law enforcement officers who sell their badges for cash and frustrate the administration of justice will be held accountable for their actions. Department employees are held to the highest standards, and we cannot permit our criminal justice system to be stained by such bribery and corruption."
Acting U.S. Attorney Carlie Christensen called the scheme a "troubling reminder" that corruption "may" exist among agents.
"When a law enforcement officer violates his oath and the public's trust by breaking the law, he must be held accountable," Christensen said. "In this case, former Agent Lustyik's decision to enter into a conspiracy to obstruct a significant fraud investigation in Utah is a troubling reminder that corruption may exist even among those we entrust with protecting our citizens and upholding our laws."
The men are to be sentenced on Jan. 5, 2015.
Read the Top 8
Sign up for the Top 8, a roundup of the day's top stories delivered directly to your inbox Monday through Friday.