Former FBI Agent Indicted for Obstructing Defense Contract Fraud Investigation

Former FBI special agent Robert G. Lustyik has been indicted, along with two alleged co-conspirators, with participating in a scheme to obstruct a federal investigation into suspected defense contract fraud by one of the alleged conspirators. Mr. Lustyik was an active FBI agent at the time of the alleged conspiracy and has been accused of using his official position in service of the conspiracy, according to the Justice Department.

FBI Agent Received Gifts to Steer Fraud Investigation Away from Business Partner

In September 2011, Michael L. Taylor, of the American International Security Corporation (AISC), allegedly discovered that federal authorities had been investigating since 2010 whether Mr. Taylor and his company had engaged in fraud in connection with a Department of Defense contract. In response to this discovery, Mr. Taylor allegedly began to make gifts to Lustyik in exchange for his efforts as an FBI agent to derail and obstruct the criminal investigation of Mr. Taylor and his company. These gifts included a payment of $200,000.

To obstruct the federal investigation, Mr. Lustyik contacted investigators to dissuade them from pursuing criminal indictment of Mr. Taylor and designated Mr. Taylor as an FBI confidential informant. At the same time, Mr. Lustyik also attempted to conceal the gifts and business relationship with Mr. Taylor to pursue security and energy contracts.

Whistleblowers Help Authorities Get to the Truth about Defense Contract Fraud

Information from whistleblowers can be critical to uncovering and prosecuting government contract fraud. To encourage them to act, the qui tam provisions of the False Claims Act allow whistleblowers to file a lawsuit addressing defense contract fraud and to receive part of any funds recovered.

The attorneys at Waters & Kraus have decades of experience representing whistleblowers. Contact us or call our whistleblower attorneys at 800.226.9880 to learn more about our practice and how we can assist.

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