2 men plead innocent in $54 million military contract bribery case

Published: Tuesday, Sept. 18 2012 3:30 p.m. MDT

SALT LAKE CITY — Two men involved in the alleged bribery of a government official to obtain a $54 million military training contract in Afghanistan pleaded not guilty Tuesday in federal court.

Michael Taylor, president of Boston-based American International Security Corporation, and Army Lt. Col. David Young entered their pleas before U.S. Magistrate Judge Brooke Wells.

A 72-count indictment against the two men and Christopher Harris, a civilian contractor in Afghanistan from Lake Havasu, Ariz., includes charges of bribing a public official, accepting of a bribe by public official, money laundering and wire fraud. The investigation involves properties in St. George and accusations of hiding proceeds and transactions at a St. George credit union.

Young, 49, not only received the bribes but solicited them as well, according to federal prosecutors.

Wells scheduled a six-week jury trial to begin Nov. 26. But attorneys for Taylor and Young are seeking to move the case to U.S. District Court in Massachusetts.

"The government gets the first word. We hope to get the last word," Young's attorney, Brett Tolman, said after the hearing.

Young, he said, had neither the position nor the authority to award the contract. "David Young was not on the selection committee. Others selected it," he said.

Tolman, a former U.S. Attorney for Utah, said the federal prosecutors are working backward to try to prove their theory in the case and it's difficult to disprove unless it goes to trial.

Attorneys for Taylor declined to comment as did federal prosecutors. Taylor, 51, remains in custody, while Young is free, but has surrendered his passport. A detention hearing for Taylor is set for Thursday.

In 2007, the U.S. Army solicited bids for a U.S. contractor to supply and train Afghan troops. The pilot contract was "related to logistics and weapons maintenance support for Afghan commando units," according to the indictment.

Young oversaw all special operations forces in Afghanistan, according to court records. Prosecutors allege that Young "fraudulently disclosed procurement information about the pilot contract, including bid, proposal and source selection information."

AISC won the $54 million contract after Young provided them with protected information about the bidding, including "the government's price estimate, source selection criteria, competing bid information, and other confidential procurement information," the indictment states.

From that $54 million, Harris was paid about $17.4 million by Taylor and AISC, according to court records, and Taylor received $1.7 million from AISC. Young is accused of instructing Harris to use $7.8 million of the money he was given to pay nominee entities and individuals controlled by Young.

"A 'nominee entity' is an entity typically used to hide and conceal illegal financial or other transactions for the benefit of an individual," according to court records.

Harris tried to hide his proceeds by structuring his transactions at America First Credit Union in St. George so he wouldn't be detected by the bank's warning mechanisms, the indictment states. The bank is required to report transactions in excess of $10,000. Harris is accused of trying to hide his dealings by making several deposits and withdrawals of $9,000 from May 2009 until February 2010.

Included in the indictment is a notice of intent by the government to seize property acquired due to the alleged illegal deal — including about 20 homes and other property in Utah, Florida, Arizona, New Hampshire and British Columbia; 225 American Eagle gold coins; 175 South African Krugerrand gold coins; a boat; a plane; a Hummer; and a Jaguar. Prosecutors also intended to seize more than $5.2 million from AISC bank accounts and more than $1 million from other accounts.

E-mail: romboy@desnews.com

Twitter: dennisromboy

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