Federal grand jury indicts former FBI agent

October 19, 2012

The Wall Street Journal on October 18, 2012 released the following:

“Associated Press

SALT LAKE CITY — A federal grand jury indicted a former FBI special agent and a defense contractor Thursday in a federal fraud case involving U.S. Army contracts, marking the latest turn in what prosecutors have called a multimillion-dollar scheme to win military contracts in Afghanistan.

The indictment alleges that the defense contractor, 51-year-old Michael Taylor of Harvard, Mass., offered the FBI agent a $200,000 cash payment, additional money for medical expenses for the agent’s child, and a share in the proceeds of several anticipated contracts worth millions of dollars in exchange for using his position to try to impede a criminal investigation into contract awards.

Robert G. Lustyik, 50, of Sleepy Hollow, N.Y., was an FBI special agent until September 2012, assigned to counterintelligence work.

A third person, Johannes W. Thaler, 49, of New Fairfield, Conn., is accused of acting as a conduit between the two men. Thaler is a childhood friend of Lustyik, according to the indictment.

Each was charged with 11 counts of conspiracy, wire fraud, obstructing justice and obstructing an agency proceeding, the U.S. Department of Justice announced in a statement Thursday.

Lustyik acted through Thaler to secure promises of cash, purported medical expenses and business proceeds in exchange for abusing his position as an FBI agent, Assistant Attorney General Lanny Breuer said.

“The alleged conduct is outrageous, and we will do everything we can to ensure that justice is done in this case.”

According to the indictment, the three men had a business relationship to pursue contracts for security services, electric power and energy development in the Middle East, Africa and elsewhere.

But in September 2011, Taylor learned a federal criminal investigation had been launched in Utah in 2010 into whether he and others had committed fraud in the awarding of defense contracts, according to the indictment.

Taylor had formed the Boston-based firm American International Security Corp., which was awarded the military contracts.

Taylor allegedly gave Lustyik, through Thaler, cash and other benefits to impede the investigation. In return, Lustyik designated Taylor as an FBI confidential source, contacting Utah officials to dissuade them from charging Taylor and attempting to interview potential witnesses and targets of the investigation, the indictment claims.

Taylor had already been charged criminally in the case. In addition, an active Army Reservist who was a procurement official is accused of leaking bid information that allowed Taylor’s company to win $54 million in contracts to supply Afghan troops with weapons and training.

The case broke in Utah when yet another business associate made a series of cash withdrawals from a St. George credit union just under the federal reporting limit of $10,000. Christopher Harris earlier pleaded not guilty to charges in the bid scheme.”

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Douglas McNabb – McNabb Associates, P.C.’s
Federal Criminal Defense Attorneys Videos:

Federal Crimes – Be Careful

Federal Crimes – Be Proactive

Federal Crimes – Federal Indictment

Federal Crimes – Detention Hearing

Federal Mail Fraud Crimes

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To find additional federal criminal news, please read Federal Criminal Defense Daily.

Douglas McNabb and other members of the U.S. law firm practice and write and/or report extensively on matters involving Federal Criminal Defense, INTERPOL Red Notice Removal, International Extradition Defense, OFAC SDN Sanctions Removal, International Criminal Court Defense, and US Seizure of Non-Resident, Foreign-Owned Assets. Because we have experience dealing with INTERPOL, our firm understands the inter-relationship that INTERPOL’s “Red Notice” brings to this equation.

The author of this blog is Douglas C. McNabb. Please feel free to contact him directly at mcnabb@mcnabbassociates.com or at one of the offices listed above.


Federal Case Against Fred Rosetti

May 24, 2012

WNEP on May 23, 2012 released the following:

by Dave Bohman

“We know more details today about the fraud case federal prosecutors have against the former head of the Northeast Intermediate Unit #19 Fred Rosetti.

The information is in response to Rosetti’s request to get back property and assets the government seized when he was charged with using the NEIU’s public money and manpower for his own personal use.

Rosetti was supposed to run an agency to help school districts in Lackawanna, Susquehanna and Wayne counties educate students with special needs.

In court papers, prosecutors accuse Fred Rosetti of exploiting NEIU #19 for his own needs.

While Rosetti is asking a federal judge to return money and property seized in February, federal investigators counter that for 12 years, Rosetti ran, “A scheme in which he fraudulently converted funds and property of (NEIU) for his own personal benefit and the benefit of his family.”

Among the details in the filings:

Prosecutors claim Rosetti ordered NEIU staffers to work on his Archbald home on taxpayer time.

According to court papers that work included snow removal, landscaping, swimming pool maintenance, building decks, sheds and sidewalks, lighting and plumbing, moving Rosetti’s daughter’s furniture.

In one instance, prosecutors claim an employee, “…spent the better part of an NEIU work day waiting at his (Rosetti’s) residence for a cable television man to arrive while he (Rosetti) and his wife kept an important date, on the golf course.”

Prosecutors also said Rosetti used NEIU to pay for UPS packages for wedding, birthday and holiday gifts, vacation, personal and sick leave that he never documented and false travel vouchers.

In the paperwork, prosecutors claim “…NEIU employees did what the defendant (Rosetti) ordered them to do,” and “were threatened with….the loss of their job if they offered resistance.

Fred Rosetti’s attorney’s claimed all his money and property was earned from his work. He pleaded not guilty and his trial is scheduled to start in November.”

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Douglas McNabb – McNabb Associates, P.C.’s
Federal Criminal Defense Attorneys Videos:

Federal Crimes – Be Careful

Federal Crimes – Be Proactive

Federal Crimes – Federal Indictment

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To find additional federal criminal news, please read Federal Criminal Defense Daily.

Douglas McNabb and other members of the U.S. law firm practice and write and/or report extensively on matters involving Federal Criminal Defense, INTERPOL Red Notice Removal, International Extradition Defense, OFAC SDN Sanctions Removal, International Criminal Court Defense, and US Seizure of Non-Resident, Foreign-Owned Assets. Because we have experience dealing with INTERPOL, our firm understands the inter-relationship that INTERPOL’s “Red Notice” brings to this equation.

The author of this blog is Douglas C. McNabb. Please feel free to contact him directly at mcnabb@mcnabbassociates.com or at one of the offices listed above.


Maryland scientist Stewart Nozette sentenced for passing secrets to supposed Mossad agent, expresses regret

March 21, 2012

The Washington Post on March 21, 2012 released the following:

“By Del Quentin Wilber
A 54-year-old Maryland scientist said Wednesday that he regretted supplying classified information in exchange for cash to a person he believed was a member of Israeli intelligence but was really an undercover FBI agent.

Stewart D. Nozette of Chevy Chase, who had previously pleaded guilty to attempted espionage in a deal with prosecutors that set his sentence at 13 years, was officially sentenced Wednesday to that term by U.S. District Judge Paul L. Friedman during a lengthy hearing in the District’s federal court. Friedman also sentenced him to just over three years in prison – a term to run concurrently with his espionage sentence – in an unrelated fraud and tax case.

At the end of the proceeding, which included the playing of secretly recorded video of Nozette meeting with an undercover FBI agent posing as a member of the Israeli intelligence agency, the Mossad, Nozette spoke publicly for the first time since his arrest in October 2009.

“I regret failing to report” to authorities that he was approached by a man he suspected of being an Israeli agent, he told Friedman. The scientist added, “I accept full responsibility for this error” and noted the meetings occurred just as his life began to “snowball downhill.” His lawyers have said he was contemplating suicide at the time and was angry at how he was being treated in the fraud investigation, making him an easy target for FBI agents seeking a big arrest. They noted that he at first refused to provide the undercover agent classified information.

In pleading guilty to attempted espionage in September, Nozette admitted he passed secrets to the undercover agent in exchange for more than $20,000. The agent approached Nozette in September 2009 and they had a series of secretly recorded meetings at the District’s Mayflower Hotel. The undercover agent also arranged to exchange information, questions and money with Nozette through a “dead drop,” which was a P.O. Box in the District. In those exchanges, Nozette provided classified information about “satellites, early warning systems, means of defense or retaliation against a large-scale attack, communications intelligence information, and major elements of defense strategy,” court records show.

Though the sentencing was largely a formality, both sides took pains to paint divergent pictures of Nozette, who was once one of the country’s leading space scientists who had access during his career to key defense programs.

Prosecutors say Nozette was motivated to become a traitor by greed and played a video clip in court of the final meeting between Nozette and the undercover agent. “I’ve crossed the Rubicon,” Nozette calmly tells the agent, because he would no longer be able to pass a government polygraph. Nozette adds that his initial price of $50,000 was too low and suggests that the Israeli government pay him at least $2 million.

“He agreed to be a traitor to the United States with a smile on his face,” Assistant U.S. Attorney Anthony Asuncion told the judge.

Defense lawyers countered that Nozette was under enormous strain when FBI agents began to target him in the sting operation. At the time, Nozette was actually working as an undercover informant for the government in the hopes of getting a reduced sentence in a fraud and tax case tied to contracting work he provided federal agencies. He pleaded guilty in early 2009 to charges of conspiring to defraud the U.S. government and to commit tax evasion, admitting that over a number of years he had filed false invoices for work totaling $265,000 and evaded more than $200,000 in taxes.

While investigating that case, federal agents in 2007 stumbled across classified information on his home computer and an e-mail he sent in 2002 threatening to provide classified information to an unidentified country or Israel. Agents trailed Nozette for a year, his lawyers said, but discovered no evidence that he provided any classified information to a foreign power. In 2009, the FBI launched its sting.

Bradford Berenson, one of Nozette’s attorneys, on Wednesday accused the government of entrapment and of “ignoble, dishonorable conduct.” He said there was no evidence that Nozette would ever have passed secrets to a foreign government absent the FBI operation. Instead of launching a sting operation, agents should have questioned Nozette or spoken to his attorneys, Berenson said.

Berenson and Nozette’s other lawyers, Robert Tucker and John C. Kiyonaga, argued that the government carefully tailored the sting to take advantage of the scientist’s frustrations with the fraud case and his sympathy for Israel.

The hearing was a final chapter in the legal saga involving Nozette, a scientist who has a Ph.D. in planetary sciences from the Massachusetts Institute of Technology. He is credited with developing a satellite-based radar system that helped discover water on the moon during a 1994 mission.”

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Douglas McNabb – McNabb Associates, P.C.’s
Federal Criminal Defense Attorneys Videos:

Federal Crimes – Be Careful

Federal Crimes – Be Proactive

Federal Crimes – Federal Indictment

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To find additional federal criminal news, please read Federal Crimes Watch Daily.

Douglas McNabb and other members of the U.S. law firm practice and write and/or report extensively on matters involving Federal Criminal Defense, INTERPOL Red Notice Removal, International Extradition and OFAC SDN Sanctions Removal.

The author of this blog is Douglas C. McNabb. Please feel free to contact him directly at mcnabb@mcnabbassociates.com or at one of the offices listed above.