United States v. Lustyik

• Decision Date: 26 March 2015
• Docket Number: Case No. 2:12-CR-645-TC-DBP
• Parties: UNITED STATES OF AMERICA, Plaintiff, v. ROBERT G. LUSTYIK, JR., and JOHANNES W. THALER, Defendants.
• Court: U.S. District Court — District of Utah

UNITED STATES OF AMERICA, Plaintiff, v. ROBERT G. LUSTYIK, JR., and JOHANNES W. THALER, Defendants.¹

Case No. 2:12-CR-645-TC-DBP

UNITED STATES DISTRICT COURT FOR THE DISTRICT OF UTAH CENTRAL DIVISION

March 26, 2015

PRELIMINARY FORFEITURE ORDER AND MEMORANDUM DECISION

As required by Federal Rule of Criminal Procedure 32.2(b)(2), the court issues this preliminary forfeiture order granting the Government's Motion for Preliminary Order of Forfeiture.² This order is issued in preparation for the upcoming March 30, 2015 forfeiture hearing and sentencing of convicted Co-Defendants Robert G. Lustyik, Jr., and Johannes W. Thaler.

The court has reviewed the Government's Motion and accompanying exhibits, Defendant Robert Lustyik, Jr.'s Opposition³ (in which Co-Defendant Johannes Thaler joins⁴), and theGovernment's Reply⁵ and its accompanying exhibits. For the reasons set forth below, and as outlined in the Government's supporting memorandum and reply brief, the court enters this preliminary forfeiture order permitting the United States to forfeit any property, real or personal, which constitutes or is derived from proceeds traceable to the crimes for which the Defendants have been convicted and to obtain a money judgment in the amount of $70,000.00.

I. Procedural and Factual Background

For the purpose of expediency, and because of the court's and the parties' familiarity with the case, this order provides a limited procedural and factual background. More detailed information may be found in the United States' Motion for Preliminary Order of Forfeiture.⁶

Co-Defendants Robert Lustyik, Jr. and Johannes Thaler, along with a third defendant, Michael Taylor (who is not subject to this order), were charged in 2012 with honest services wire fraud, obstruction of the due administration of justice, obstruction of an agency proceeding, and conspiracy to commit bribery and obstruction of justice. The Indictment also contained a forfeiture allegation notifying the Defendants that the Government would seek forfeiture in the event the Defendants were convicted. In Fall 2014, on the eve of trial, Mr. Lustyik and Mr. Thaler each pleaded guilty to one or more counts in the Indictment.

Mr. Lustyik is a former FBI agent and Mr. Thaler is Mr. Lustyik's childhood friend. The Indictment alleged a scheme by the Defendants in which Mr. Lustyik and Mr. Thaler would work to derail a criminal investigation into Mr. Taylor's military contract procurement activities in Afghanistan in exchange for money and promises by Mr. Taylor of lucrative businessopportunities in the Middle East set up by Mr. Taylor. Mr. Taylor was to pay Mr. Lustyik and Mr. Thaler, in part, through his contacts in the Middle East to procure energy contracts for wind turbines and other types of power generation.

Part of the scheme included the creation of the entity Blue Meadow Energy as a mechanism to provide financial benefits to Mr. Lustyik and Mr. Thaler without tipping off law enforcement authorities. The involvement of Mr. Lustyik, as an FBI agent, would, at a minimum, raise unwelcome suspicions. To avoid detection, Mr. Lustyik was a silent partner in the business, but Mr. Thaler and Mr. Taylor had a visible role in the company. (Information about the role that each of the three Defendants played in the scheme is set forth in the Government's memorandum, and the court will not repeat that here.)

A. $10,000 Payment from Mr. Taylor to Mr. Thaler and Mr. Lustyik.

As part of the scheme, Mr. Thaler traveled to Lebanon in March 2012 to take care of Blue Meadow Energy business (which the Government has shown by a preponderance of evidence was created as a means to carry out the Defendants' criminal activities). Before the trip to Lebanon, Mr. Thaler sent Mr. Lustyik a text message to tell him that he had "[j]ust talked to [Taylor]. He told me to bring my bank wire transfer numbers to Lebanon." (Ex. 1 at 2.) Mr. Lustyik responded: "YES. He is giving me money 'for [Lustyik's minor daughter's] surgery.'" (Id.)

Mr. Thaler then emailed Mr. Taylor his bank wire transfer information. (See Ex. 2 (email from J. Thaler to M. Taylor).) On March 6, 2012, the day Mr. Thaler left for Lebanon, Mr. Lustyik sent him a text cautioning him, "[d]on't forget to mention to MT how hard I'm working on getting his shit pushed aside and how tough I'm having it with [Lustyik's minor daughter's]recent surgeries." (Ex. 1 at 4.) On March 15, 2012, Mr. Thaler sent a text message to Mr. Lustyik to tell him, "Capt put 10 in the account today. Won't be able to access it until Monday." (Id. at 12.) On March 19, 2012, $10,000 was transferred into Mr. Thaler's account as a result of a wire directed by Mr. Taylor. (See Exs. 1, 3, and 4.)

In a text message dated March 26, 2012, Mr. Lustyik asked Mr. Thaler, "Hey is there any of the money left that Taylor tried to give me?" Mr. Thaler responded, "[a]bout $2000." (Ex. 1 at 13.) On March 27, 2012, Mr. Lustyik and Mr. Thaler discussed in a text message plans to meet that evening. Mr. Lustyik asked Mr. Thaler if he could "get 2 cash?" (Ex. 1 at 14.) Mr. Thaler withdrew $2,000 in cash from the account where Mr. Taylor had the money transferred. (Ex. 3 at 7 (J. Thaler bank account records).) He told Mr. Lustyik in a text message that he was "[j]ust leaving the bank" and will "be there in five minutes." (Ex. 1 at 14.)

B. $60,000 Payment to Blue Meadow Energy

As part of Mr. Lustyik's payment, Mr. Taylor offered to pay Mr. Lustyik a salary in connection with a business deal involving Blue Meadow Energy wind turbines. (See Ex. 4 (Memorandum of Interview of M. Taylor).) Mr. Taylor kept Mr. Lustyik informed about the wind turbines, because Mr. Taylor wanted to make sure that Mr. Lustyik was taking steps to shut down the Utah case. (See id.)

Mr. Taylor regularly held himself out as the president of Blue Meadow Energy, established a business address and telephone number for the company, and instructed an associate, Michael Feldman, about taking care of administrative matters. (See Exs. 6, 8, and 9.) Mr. Lustyik, to conceal his involvement, was a silent partner in the business, but the others informed him of the progress of the business, and sought his input on Blue Meadow Energymatters, including investment proposals.

Mr. Lustyik became even more involved in Blue Meadow Energy in August 2012. On August 15, 2012, Mr. Feldman emailed Mr. Lustyik's friend and orthopedist, John Galeno, about making an investment in Blue Meadow Energy. (See Ex. 16 (email from M. Feldman).) Mr. Feldman copied Mr. Lustyik and Mr. Thaler on the email, and told Dr. Galeno that "Bob [Mr. Lustyik] thought you might be interested in learning about" Blue Meadow Energy. (Id.) On August 28, 2012, Dr. Galeno wrote a check for $60,000 to Blue Meadow Energy, which was thereafter deposited into a Blue Meadow Energy account. (Ex. 17 at 3, 7 (Blue Meadow Energy bank account records).) Mr. Feldman sent a draft receipt for the investment to Mr. Lustyik for his approval before sending it to Dr. Galeno. (See Ex. 18 (email from R. Lustyik to M. Feldman and J. Thaler).) Mr. Lustyik responded to Mr. Feldman and Mr. Thaler that the receipt is "[g]ood to go." (Id.)

On September 7, 2012, $26,000 in cash was withdrawn from a Blue Meadow Energy bank account into which Dr. Galeno's check was deposited. (See Ex. 17 at 10.) Mr. Lustyik has acknowledged that he received that $26,000. While this money was purportedly a loan to Mr. Lustyik to pay for his daughter's medical expenses, no record of the loan, its terms, or a repayment plan was ever documented. After Mr. Lustyik was arrested on a complaint but before he was indicted, he had a friend return $26,000 in cash to Mr. Feldman.

II. Analysis

The Government seeks forfeiture in this case pursuant to 18 U.S.C. § 981(a)(1)(C) and 28 U.S.C. § 2461(c), which together authorize the criminal forfeiture of the proceeds of honest services wire fraud, obstruction of the due administration of justice, and conspiracy to commitbribery or obstruction of the due administrative of justice. See, e.g., United States v. Yass, 636 F. Supp. 2d 1177, 1178 n.1 (D. Kan. 2009) ("Section 2461 . . . acts as a 'gap filling' or 'bridging' provision that grafts civil forfeiture provisions, like section 981, onto criminal proceedings in certain circumstances"). See also 18 U.S.C. §§ 981(a)(1)(C), 1956(c)(7)(A), 1961(1) (read in combination, these sections authorize criminal forfeiture for bribery, wire fraud, and obstruction of justice).

Criminal forfeiture is a mandatory part of Mr. Lustyik's and Mr. Thaler's sentences for their convictions in this case. United States v. McGinty, 610 F.3d 1242, 1246 (10th Cir. 2010). See also 28 U.S.C. § 2461(c) ("the court shall order the forfeiture of the property as part of the sentence" in a criminal case involving bribery, wire fraud, and obstruction of justice). These criminal forfeiture proceedings are governed by 21 U.S.C. § 853 and Rule 32.2 of the Federal Rules of Criminal Procedure. 28 U.S.C. § 2461(c); United States v. Brinton, 880 F. Supp. 2d 1158, 1159 (D. Utah 2012).

Here the Government seeks forfeiture in the form of a money judgment. The Government bears the burden of establishing the amount of the money judgment by a preponderance of the evidence. United States v. Bader, 678 F.3d 858, 893 (10th Cir. 2012), cert. denied, 133 S. Ct. 355 (2012). It is the court's job to "determine the amount of money that the defendant will be ordered to pay." Rule 32.2(b)(1)(A).

Mr. Lustyik and Mr. Thaler must forfeit to the United States any property "which constitutes or is derived from proceeds traceable to" the fraud schemes for which they were convicted. 18 U.S.C. § 981(a)(1)(C). "[T]he term 'proceeds' means property of any kind obtained directly or indirectly, as the result of the commission of the offense giving rise toforfeiture, and any property traceable thereto, and is not limited to the net gain or profit realized from the offense." Id. § 981(a)(2)(A). "In other words,...