AISC subsequently won the bid for what was initially a $899,782, six-month contract that was subsequently extended and expanded numerous times, eventually resulting in $54 million in payments to the company. Prosecutors allege that nearly half that amount was distributed among the defendants, who created a network of shell companies and bank accounts to conceal and launder the money. According to the indictment, AISC paid Harris about $17.4 million, and he in turn paid $7.8 million to entities and individuals controlled by Young. AISC also paid more than $1.6 million to an entity Young owned.
The defendants used the money to support "lavish lifestyles," depositing millions in various bank accounts and buying 20 homes and other property in Utah, Florida, Arizona and New Hampshire; vehicles and airplanes, silver bars and gold coins and a half-dozen firearms, according to prosecutors. The government alleges Harris used the money to buy and renovate homes in St. George and Lake Havasu City, Ariz. He also bought a lot in St. George, a Ford Taurus, a 2010 Harley-Davidson motorcycle, a Dodge Ram truck and a Cessna and seafloat airplanes and $30,000 worth of silver bars.
The government began forfeiture proceedings last fall to recover those items. In May, a Utah judge entered a default judgment against Harris for all the items except two homes and the lot, which he is fighting to keep.
The scheme came to light after Harris made a series of seven withdrawals from a St. George credit union that were all in the amount of $9,000 just under a $10,000 limit that triggers a report to the IRS between May 2009 and February 2010. Harris allegedly told a teller he did not want the government to know about the transactions.
Harris was arrested in Salt Lake City on July 31 and, after an initial court appearance, released pending further court proceedings. The Salt Lake Tribune was unable to reach Attorney Howard Lundgren, who is representing Harris.
David B. Barlow, U.S. Attorney for Utah, said Wednesday that summons are being issued to Young, Taylor and AISC to appear in Utah for court proceedings.
"As we are all aware, families in Utah and all across America continue to send loved ones to serve our nation in Afghanistan, and taxpayers continue to pay the financial cost of that effort," Barlow said during a press conference at his Salt Lake City office. "Our office will fully and aggressively pursue alleged public corruption and fraud against taxpayers and the government such as that alleged in today's indictment."
Barlow said the indictment focused on the bidding process, not on the quality of services provided under the contract awarded to AISC, and the "money obtained through unlawful actions."
Mark Cutchen, resident agent in charge for U.S. Immigration and Customs Enforcement, said the "tremendous scope, complexity and brazenness" of the schemewas "astounding."
"Millions of dollars in U.S. government funds earmarked to help train and equip Afghan soldiers were used instead to indulge the defendants' appetites for lavish lifestyles, including investments in private planes, precious metals and real estate," Cutchen said.
The IRS and Defense Criminal Investigative Services also assisted in the three-year investigation. Janice M. Flores, special agent in charge for the DCIS Southwest Field Office, said the investigation "should serve as a warning for those intent on defrauding the U.S. military and American taxpayers that law enforcement will pursue these crimes relentlessly."
But attorney Brett Tolman, who is representing Young, said the "case is not so simple as what has been presented here."
"We think the real issues here are two," Tolman said Wednesday. "One, David had no ability to award the contract and he was not a party to the contract. And two, the contract was requested by the United States government and awarded to AISC. They serviced the contract and fulfilled the obligations under the contract and that is significant in this case. Nor did [Young] come up with the idea for the contract. Do we deny the charges? We do. Do we intent to fight quite vigorously? We do. We think there are important facts and details that will come out, and we look forward to bringing those to light."