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After 14 months in a Utah jail, a former Green Beret who prosecutors alleged was a key player in a multimillion-dollar military fraud scheme —and later enlisted the help of an FBI agent to thwart the investigation — was on his way home to Boston on Wednesday in time to rejoin his family for Thanksgiving.
In a deal that resolves two different lawsuits, Michael L. Taylor pleaded guilty to one count of violating the Procurement Integrity Act and one count of wire fraud in exchange for two sentences of up to 24 months, set to run concurrently. Taylor will get credit for time served while awaiting trial, which was to take place in January.
Taylor had faced a maximum penalty of up to five years on the procurement violation count and up to 20 years on the wire fraud count.
The guilty pleas were entered in a new filing by the government. Prosecutors agreed in court to waive the original indictment filed against Taylor and to dismiss other counts listed in the new filing. The government also agreed to return $50,000 seized from Taylor's bank accounts and two Land Rovers.
Campbell did not set a sentencing date for Taylor, saying she wanted to review a presentencing report first. The judge ordered Taylor to be released immediately after the hearing as part of the deal.
The sudden resolution brought an end to months of legal machinations over how to untangle allegations involving Taylor and three other men and sort through millions of pages of documents — including some involving classified matters that required attorneys involved to get high-level security clearances.
Attorney Dan Marino of Washington, D.C., who represented Taylor, declined to comment after the hearing. Asst. U.S. Attorney Cy Castle was not available to comment after the hearing.
Taylor, 52, initially faced about 50 counts in an indictment issued by a grand jury in August 2012. Taylor traveled to Utah for a court appearance in September 2012 and was arrested at his hotel on new allegations that he called and sent emails to former FBI agent Robert Lustyik of Sleepy Hollow, N.Y., urging him to stop the investigation into him and his company, American International Security Corporation (AISC) of Boston. Taylor remained incarcerated in the Davis County Jail until Wednesday.
Others named in the military bribery indictment include David Young of Florida and Christopher Harris of St. George. Their cases are still pending, as are charges against Lustyik.
Young, an activated Army reservist, oversaw coordination of Army divisions during the security transfer in Afghanistan from 2007 to 2009, according the court documents. The government alleged Young was privy to contract bid information and shared that information with Harris, Taylor and AISC.
Young and Harris, also a former reservist, served together in Iraq, according to a complaint filed in Utah's federal court. Young also knew Taylor and his company, which provides security services to private companies and government entities worldwide.
Prosecutors claimed that Young disclosed information that allowed AISC to land a nearly $900,000, six-month contract in 2007 to provide training and mentoring services to Afghan commandos. That initial contract was extended and expanded numerous times, eventually netting AISC approximately $54 million. The government alleged about half that amount was illicit and was distributed to the defendants through a network of shell companies and bank accounts created to conceal and launder funds.
Investigators uncovered the alleged scheme after Harris made a series of withdrawals from banks in Southern Utah, each in the amount of $9,000 — an amount he allegedly told a teller was designed to avoid government reporting requirements.
In February 2010, a joint investigation was launched by the U.S. Department of Homeland Security, Department of Defense Criminal Investigation Services, Department of the Army Criminal Investigative Division and Internal Revenue Service Criminal Investigations.
Taylor, a former senior operator and counter-terrorism specialist with the U.S. Special Forces, pleaded not guilty in September 2012 to charges of fraud, bribery and money laundering.
Young and Harris also entered not guilty pleas. Attorneys for Young have previously said he had no authority to determine who received the military contracts or how much they were paid to do the work, which AISC completed as requested.
David B. Barlow, U.S. Attorney for Utah, acknowledged as much in a press conference about the case in August 2012, saying the indictment was focused on the bidding process rather than the quality of services provided by AISC under the contracts.
As part of the action, the government seized about $15 million. That forfeiture action included approximately $5.3 million seized from AISC bank accounts; the government later returned $100,000 of that sum. On Wednesday, U.S. District Judge Dale A. Kimball signed off on a settlement in which the government agreed to return an additional $2 million to AISC, while Taylor and his company agreed to forfeit the rest of the money.
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