Tuesday , March 18, 2014 - 4:39 PM
SALT LAKE CITY — Prosecutors have gathered 90,000 emails in a case of defense contract fraud that show the close personal and business relationships among a group of defendants and their lawyers.
U.S. District Court Judge Tena Campbell held a hearing Wednesday to sort out the potential conflicts. She reserved a decision until Dec. 11 that will establish ground rules for a trial.
The case involves three former Special Forces soldiers and other accomplices charged with using insider bidding to win U.S. Army contracts in Afghanistan.
A recently retired FBI agent has been brought into the case. Robert G. Lustyik Jr. has been accused of trying to derail the federal investigation into a series of $54 million in contracts to supply Afghan troops with weapons.
Lustyik, who was a counterintelligence officer based in White Plains, N.Y., and Michael Young, the owner of a Boston-based American International Security Corp., were in federal court in Salt Lake City Wednesday. They tentatively agreed not to call each other’s attorneys as witnesses to shared emails, text messages, phone calls or business relationships. And their lawyers dismissed the judge’s suggestion the two defendants might turn on each other to resolve charges.
“We’re taking this to trial,” said Lustyik’s lawyer, Raymond Mansolillo, a former Drug Enforcement Agent who the government says did business with Taylor’s defense and security firm years ago.
Campbell on Wednesday she was unable to set a trial date because of the number of documents the government has yet to release to defense lawyers.
Some of the 90,000 emails were traded by suspects and their lawyers during the federal investigation. Those emails will be exempted as trial evidence after prosecutors begin the task of sorting through them.
In addition, the government has yet to release 250 gigabytes of unclassified documents — that’s 250 billion bits of data — gathered during the investigation, said Mansolillo. He said that amount of data could take lawyers a year to study.
Prosecutors stopped short Wednesday of demanding that some of the defense lawyers be disqualified, and they backed off on threats to call some of the lawyers as trial witnesses. Still, prosecutors sought establish ground rules for testimony, witnesses and arguments at trial, saying some of the lawyers played roles in the defendants’ business activities.
The case got its start in Utah as a money-laundering probe after an associate of Taylor’s was questioned about taking large amounts of cash out of a St. George credit union.
Taylor has pleaded not guilty to a 72-count indictment in the Afghan contract scheme and is being held in Utah on additional charges of allegedly trying to corrupt the investigation. He is appealing the jail order and denies all charges.
Prosecutors say Taylor’s wife is a Lebanonese citizen and that he recently became a legal resident of Lebanon and could flee the U.S. if given a chance.
Johannes W. Thaler, 49, of New Fairfield, Conn., earlier pleaded not guilty to charges he acted as a messenger between the FBI agent and Taylor.
Thaler is a childhood friend of Lustyik, according to an indictment.
A recently retired Army officer, David Young, of Hernando Beach, Fla., has been released on contract-fraud charges. His lawyer, Brett Tolman, has disputed the government’s contention that Young was a procurement official who leaked bid information to Taylor.
Christopher Harris, who worked for the company in Afghanistan, also has pleaded not guilty in the bid scheme. Court records indicate Harris helped prosecutors build their case after he raised suspicions by withdrawing amounts from a Utah credit union just under the federal reporting limit of $10,000.
The government seized $5 million from a bank account of Taylor’s that it traced to the Afghan contract. Prosecutors said the Sept. 8, 2011 seizure marked the start of Taylor’s efforts to quash the investigation.
Prosecutors say Taylor and business associates pocketed $20 million from the contract. The defendants insist they fulfilled the terms of the contract and deny any wrongdoing.
The government hasn’t disputed that Taylor’s company distributed weapons to Afghan troops, saying that issue isn’t relevant to charges of insider bidding.
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