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Hernando Beach former Army Reserve officer David Young indicted in $54 million-dollar fraud case

The Internal Revenue Service and the Department of Defense executed search warrants last year at the waterfront home of former Lt. Col. David Young in Hernando Beach.

WILL VRAGOVIC | Times (2011)

The Internal Revenue Service and the Department of Defense executed search warrants last year at the waterfront home of former Lt. Col. David Young in Hernando Beach.

BROOKSVILLE — Nearly a year after federal agents first raided his three-story, waterfront home in Hernando Beach, a Utah grand jury has indicted former Army Reserve Lt. Col. David Young on 51 criminal counts that accuse him of defrauding the U.S. military out of millions of dollars.

His charges include acceptance of a bribe by a public official, wire fraud, conspiracy and money laundering. If convicted on all counts, he could face a maximum prison term equivalent to a life sentence.

The Tampa Bay Times first reported the details of the alleged $54 million scheme in March. According to court records, Young used his position to steer military contracts to his friends, who then paid him millions in bribes over several years. The group, investigators say, personally profited $20 million, with Young receiving almost half of that.

Federal prosecutors have sued him and others to seize 20 properties, 25 pounds of gold, several vehicles and a plane. The government also is seeking to recover the entire $54 million.

"The scope, complexity and brazenness of this alleged fraud scheme are astounding," U.S. Immigration and Customs Enforcement director John Morton said in a statement. "If the allegations prove true, millions of dollars in U.S. government funds earmarked to help train and equip Afghan soldiers were used instead to indulge the defendants' appetites for wealth and opulent lifestyles."

Young, who will be issued a court summons and will not be arrested, flatly denied wrongdoing on Wednesday. He acknowledged profiting from the deals, but said he did so legally.

The charges stem from a contract out of Afghanistan for which the Army solicited bids in June 2007. The government needed workers to manage supplies and to train Afghan commando troops to manage their equipment.

Back then, Young was in Afghanistan working with the country's security forces, according to the investigators. He was instrumental, authorities say, in developing the contract.

Around the same time, the indictment says, Young contacted Michael Taylor, a longtime military friend who owned a contract company based in Boston.

Young, authorities allege, told Taylor to pursue the deal and he arranged for another friend, Army Sgt. Christopher Harris, to work for Taylor's company.

The criminal indictment alleges that Young then illegally disseminated secret information about the contract — including the Army's desired bid price — to Taylor and Harris.

In exchange for that information, which allowed Taylor's company to win the bid, authorities say Young was paid millions in profits made from the contract.

Both Taylor and Harris also were indicted. The case is based in Utah, at least in part because the investigation began with Harris, who lives there.

After hearing of the indictment from a reporter, Young, 49, insisted that he didn't supply anyone information without permission from the military. Also, Young said, he was not a part of the committee that ultimately selected the winning bid, leading him to believe he was allowed to make money from the deal.

"As far as I'm concerned," he said, "the issues are pretty straightforward."

In a lawsuit filed five months ago, federal prosecutors alleged that Young and the others didn't just fraudulently obtain the contract. Those documents say the men also charged the Department of Defense millions of dollars for work that was never done.

The criminal indictment makes no such accusations. Young, who maintains the military received services for every dollar it paid, pointed to that discrepancy as a sign that the government's case against him has weakened.

Melodie Rydalch, a spokeswoman for the U.S. Attorney's Office in Utah, wouldn't directly respond to the inconsistency, but said this:

"It was a $54 million fraud in which $20 million was shared among the participants. You can draw conclusions from that."

Young moved to Hernando County in early 2010 after leaving the military. Before coming to Florida, he spent 30 years making a name for himself as a politician and a lawyer in New England.

At 21, Young became one of New Hampshire's youngest state legislators. He went on to become a Green Beret, a Bronze Star recipient and a Gulf War hero. For a time, Young told people he was close with a slew of politicians, including former Gov. John H. Sununu, who also served as White House chief of staff under President George H.W. Bush. Young helped lead two presidential campaigns in New Hampshire, including John McCain's.

In the past six years, Young's professional life collapsed.

After multiple reprimands while practicing law in New Hampshire, he was disbarred in 2006 for misusing a client's money. Two years later, he was convicted in a military court-martial of taking two Navy Humvees in Afghanistan.

In Hernando, Young operated three businesses that authorities allege were used primarily to launder money.

One was a real estate investment firm, Hernando County Holdings. Also, Young and his business partners launched two firms that were supposed to recruit former military personnel to work as trainers for Harris in Afghanistan. U.S. attorneys say those were shell companies Young created to conceal fraud.

Over the last year, the Tampa Bay Times has interviewed dozens of Young's friends, clients and business associates. Five people listed as executives or key staff members of these firms say they did almost no work and made, at most, about $1,000.

In each case of alleged misconduct — the disbarment, the court martial and the alleged fraud — Young has denied wrongdoing.

On Wednesday, Young reiterated that he was without fault.

"I was raised right by my parents," he said. "I knew right from wrong."

Times photographer Will Vragovic contributed to this report. John Woodrow Cox can be reached at jcox@tampabay.com or (727) 893-8472.

Hernando Beach former Army Reserve officer David Young indicted in $54 million-dollar fraud case 08/22/12 [Last modified: Wednesday, August 22, 2012 11:10pm]

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