SAN DIEGO -- It was the only murder conviction the U.S. government had gotten in one of the highest-profile criminal cases against U.S. troops to arise out of the war in Iraq.

A military appeals court on Thursday overturned the murder conviction of Sgt. Lawrence Hutchins III. The Camp Pendleton Marine led a squad that included six Marines and one Navy corpsman who were also charged in connection with the April 2006 murder of Hashim Ibrahim Awad, 52, in the village of Hamdania.

The court said it based its decision on the fact that a military defense attorney assigned to Hutchins was improperly dismissed before his trial in 2007.

The ruling by the U.S. Navy-Marine Corps Court of Appeals in Washington sets the stage for the release of Hutchins.

The case is now back with the Navy Judge Advocate General's Corps, which will decide whether to appeal the decision or order a retrial.

Thad Coakley, a former Marine Corps judge advocate, said he believes the government will appeal.

"When you have a serious allegation that at least was substantiated at one point that this squad leader of Marines and a Navy corpsman kidnapped and executed an Iraqi detainee -- which is essentially murder -- if you don't pursue that, how do you show that you're holding Marines to a standard of accountability?" he said.

Coakley added that the court's "opinion makes no comment and therefore no judgment on the validity of the facts associated with this case. This opinion is focused upon a procedural error and a failure to maintain an attorney-client relationship."

Prosecutors said Hutchins led a squad that was on a mission to find an insurgent and when they failed to find the suspect at his home, the military men went to a nearby house and pulled out Awad, killed him and then planted an AK-47 and shovel to make Awad look like an insurgent planting a bomb.

Hutchins has been serving an 11-year sentence in a military prison in Leavenworth, Kan.

"Let's hope Larry can come home," his mother Kathy Hutchins said in a phone interview from Plymouth, Mass. "It's not like the charges can be dropped, there still can be a retrial, but we hope that he can come home and hold his daughter."

Hutchins, 26, has a five-year-old daughter, Kylie. He learned of the court decision from his attorney, Marine Capt. S. Babu Kaza.

"He was surprised to get good news because it's really the first time it's happened since he got put in confinement," Kaza told the North County Times.

Hutchins -- the leader of the 3rd Battalion, 5th Marine Regiment squad -- was reduced in rank to private after his conviction. Thursday's ruling could restore that.

Navy corpsman Petty Officer 3rd Class Melson J. Bacos of Franklin, Wis., pleaded guilty to kidnapping, conspiracy to kidnap and making false official statements. Marine Lance Cpl. John J. Jodka III, of Encinitas, Calif., pleaded guilty to aggravated assault and conspiracy to obstruct justice.

Lance Cpl. Tyler A. Jackson, of Tracy, Calif., pleaded guilty to aggravated assault and conspiracy to obstruct justice. Lance Cpl. Jerry E. Shumate Jr., of Matlock, Wash., pleaded guilty to aggravated assault and conspiracy to obstruct justice.

All will get either an honorable or general discharge. They have no recourse to appeal.

Three other defendants left the military after their prison terms ended.

BAGHDAD -- A U.S. military jury cleared a Navy SEAL Thursday of failing to prevent the beating of an Iraqi prisoner suspected of masterminding a 2004 attack that killed four American security contractors.

The contractors' burned bodies were dragged through the streets and two were hanged from a bridge over the Euphrates river in the former insurgent hotbed of Fallujah, in what became a major turning point in the Iraq war.

The trial of three SEALs, the Navy's elite special forces unit, has outraged many Americans who see it as coddling terrorists.

Petty Officer 1st Class Julio Huertas, 28, of Blue Island, Ill., was found not guilty by a six-man jury of charges of dereliction of duty and attempting to influence the testimony of another service member.

The jury spent two hours deliberating the verdict.

Huertas is the first of three SEALS to face a court-martial for charges related to the abuse incident. All three SEALs could have received only a disciplinary reprimand, but insisted on a military trial to clear their names and save their careers.

The trial stems from an attack on four Blackwater security contractors who were driving through the city of Fallujah west of Baghdad in early 2004. The images of the bodies hanging from the bridge drove home to many the rising power of the insurgency and helped spark a bloody U.S. invasion of the city to root out the insurgents later that year.

The Iraqi prisoner who was allegedly abused, Ahmed Hashim Abed, testified Wednesday on the opening day of the trial at the U.S. military's Camp Victory on Baghdad's western outskirts that he was beaten by U.S. troops while hooded and tied to a chair.

Navy Petty Officer 3rd Class Kevin DeMartino, who was assigned to process and transport the prisoner and is not a SEAL, testified he saw one SEAL punch the prisoner in the stomach and watched blood spurt from his mouth. Huertas and the third SEAL were in the narrow holding-room at the time of the incident, he added.

But defense attorneys tried to cast doubt on the beating claims, showing photographs of Abed after the alleged beating in which he had a visible cut inside his lip but no obvious signs of bruising or injuries anywhere else.

In her closing arguments, Huertas' civilian attorney Monica Lombardi pointed to inconsistencies between DeMartino's testimony and nearly every other Navy witness. She also reminded the jury of the terrorism charges against Abed, who is in Iraqi custody and has not yet been tried, saying he could not be trusted and may have inflicted wounds on himself as a way of recasting blame on American troops.

But prosecutor Lt. Cmdr. Jason Grover said DeMartino said the SEALs were itching to abuse Abed as payback for the killings of the Blackwater guards -- two of whom were former SEALs.

Citing a lack of confidence in her leadership, the U.S. Coast Guard has replaced the captain who was in command of the Coast Guard's Sector Seattle.

Rear Adm. Gary T. Blore, commander of the 13th Coast Guard District, said Capt. Suzanne E. Englebert was relieved of her command duties because of the poor "command climate" under her rule.

Englebert, a 23-year veteran of the Coast Guard, will be temporarily assigned to the administrative headquarters of District 13 in the Jackson Federal Building in downtown Seattle, according to Cmdr. Mark McCadden, chief of external affairs for the district.

"The decision to relieve a commanding officer is never easy and is taken very seriously," Blore said in a statement released on Thursday. "Due to an unacceptable command climate, this commander no longer had my confidence to command an effective unit. I firmly believe this decision was made in the best interest of the unit and the Service."

The position will be temporarily filled by Capt. Scott Bornemann, the Coast Guard said.

McCadden said the move is unusual.

Englebert, who assumed command in August 2008, was removed from command after several months of investigation and observation, McCadden said.

He defined a "good" command climate as one in which there is open communication between supervisors and subordinates, mentoring of junior personnel and a sense of mutual respect among colleagues.

Sector Seattle oversees the comprehensive maritime safety, security and marine-environmental response operations throughout the Sector's 3,500-square-mile area of responsibility.

The sector's maritime responsibilities include oversight of the ferry system, the container port, the Alaska fishing fleet, strategic naval port and the transport of more than 15 billion gallons of oil products each year.

On second thought, the U.S. Air Force says it will discharge a lesbian officer who openly declared her homosexuality.

Earlier this year an Air Force general decided Lt. Robin R. Chaurasiya revealed her sexual orientation to avoid military service and should not be discharged, the Los Angeles Times reported Tuesday.

Chaurasiya said her announcement was intended as a means of confronting what she believed was the injustice of the military's "don't ask, don't tell" policy and was not made to get out of the service.

Monday the Air Force issued a statement saying after reviewing the case the Air Mobility Command has recommended Chaurasiya be discharged.

The reversal came as the military adopts to new guidelines on the removal of gay service members.

"I am kind of heartbroken," Chaurasiya said about the discharge decision. "I felt my situation was hinting at changes."

Chaurasiya is stationed at Scott Air Force base in Illinois.

A U.S. Army sergeant who oversaw dining facilities at two military bases in Kuwait pleaded guilty Wednesday to accepting $1.4 million in "illegal gratuities" from private contractors.

Ray Scott Chase, 42, also pleaded guilty in an appearance before an Illinois court to hiding the money upon his return to the United States and lying to federal investigators in 2007, Illinois prosecutors said.

In a statement, the Justice Department said Chase "supervised the food procurement, preparation and service operations at Camp Doha and Camp Arifjan" in Kuwait in 2002 and 2003.

He "also coordinated orders for certain blanket purchase agreements the U.S. Army had with various private contractors to provide supplies to services to both of those dining facilities," the department added.

In a statement, the Justice Department said Chase admitted receiving approximately $1.4 million from contractors that included Tamimi Global Company Limited, LaNouvelle General Trading and Contracting Corporation, and another unnamed company.

Prosecutors did not specify what Chase provided in return for the money.

He will be sentenced Aug. 6 and faces a maximum sentence of five years in prison. He has also agreed to forfeit all assets related to the money he received in bribes.

BAGHDAD -- The U.S. Army has dismissed a Soldier who threatened fellow troops and sent the Pentagon a violent rap song he wrote to protest his Iraq redeployment orders, officials said Saturday.

The dismissal for misconduct means Spc. Marc A. Hall will avoid criminal charges but lose all military benefits earned over at least four years of service, including an earlier tour in Iraq.

Army spokesman Lt. Col. Eric Bloom said Saturday that top brass decided to discharge Hall instead of taking him to trial in part because he admitted his guilt.

"He understood the threats he made to his fellow Soldiers," Bloom said. "With the loss of his benefits, the time he's already done in jail and his reduction in rank, that's justice served."

Hall has been jailed since Dec. 11, two days before his brigade with the Army's 3rd Infantry Division out of Fort Stewart, Ga., was scheduled to leave for Iraq. He was charged with the military offense of communicating a threat after telling his battalion commander that he might shoot or otherwise attack a fellow U.S. Soldier, according to Army lawyers. He previously served in Iraq in 2007-08.

But it was a CD recording of a rap song that Hall wrote and sent to the Army's personnel office in July 2009 that gained notoriety for the case.

At that point, Army lawyers said, Hall knew his unit was scheduled to deploy -- just two months before he was to finish his four-year enlistment contract. An unpopular Army policy known as "stop loss" requires that Soldiers who are assigned to a unit at the time it deploys will be kept in the ranks for as long as the duration of the yearlong tour.

On the recording, Hall denounced the Army for the policy and rapped about opening fire with his military-issue M-4 rifle.

I got a (expletive) magazine with 30 rounds, on a three-round burst, ready to fire down," Hall rapped. "Still against the wall, I grab my M-4, spray and watch all the bodies hit the floor. ... I bet you never stop-loss nobody no more, in your next lifetime of course. No remorse."

Hall's civilian attorney, David Gespass of Birmingham, Ala., said that while some of Hall's words may have seemed threatening to the Army, he's convinced the Soldier never intended to harm anyone.

The song was a way for him to sort of vent," Gespass said. "He was, I think, less and less happy about the idea even of having a weapon and using it."

Gespass said Soldiers appearing as witnesses at Hall's Article 32 hearing, similar to a civilian grand jury, testified "they thought he was a joker and they didn't take him seriously."

Although he felt Hall would likely have been acquitted by a court-martial, Gespass said he and Hall's military lawyer feared the Soldier would have remained deployed in Iraq after his trial, and decided the best thing for Hall was to agree to a discharge.

We are really happy that he's coming home," Gespass said. "We think it's the best solution for all concerned."

Critics have called the case a free speech issue, saying Hall should not be punished for venting his anger about being sent back to Iraq right before he was supposed to get out of the Army.

Bloom said that Maj. Gen. Terry Wolff signed off Friday on a plea deal for Hall to admit guilt and be discharged from the Army instead of face trial in Baghdad, as military lawyers requested. Had he lost at trial, Hall could have faced up to 15 years in jail.

Still, the case was far from sealed: Army lawyers concede that Hall never took physical action against any troops. His threat came the month after Maj. Nidal Hassan allegedly killed 13 people in a shooting spree at Fort Hood, Texas -- a period when the Pentagon was taking extra precautions about potentially violent troops.

SAN DIEGO -- A military judge has allowed a Marine sergeant convicted of murder in one of the biggest war crimes cases to emerge from the Iraq war to walk free, nearly two months after a military appeals court ruled he had an unfair trial.

Monday's surprise decision to release Sgt. Lawrence Hutchins deals another blow to the government's prosecution of U.S. troops accused of killing unarmed Iraqis.

Attorneys for the government have said Hutchins led a squad of seven troops who killed a 52-year-old man in the Iraqi village of Hamdania in 2006, and then planted a shovel and AK-47 to make it appear he was an insurgent.

"I'm going to be the best Marine I can be today," an elated Hutchins told The Associated Press in a phone interview after being released from the brig at Camp Pendleton. "Today is really a surreal experience. I think we had a good judge. ... It's hard to describe exactly what I'm feeling. I'm happy."

Hutchins had been serving an 11-year sentence. The others in his squad served less than 18 months.

The U.S. Navy-Marine Corps Court of Criminal Appeals in Washington ruled in April that Hutchins was not given a fair trial because his lead defense lawyer left the case shortly before his 2007 trial. The ruling is being appealed by the Navy.

Hutchins' defense attorney, Capt. Babu Kaza, argued that the married father of a 5-year-old girl was not a flight risk or a threat to society. Kaza said he and Hutchins, both Roman Catholics, prayed with a rosary at Monday's hearing before the judge announced his decision.

Prosecutors could not immediately be reached for comment after the hearing Monday.

Hutchins said he called his family immediately after the judge's decision to tell them the news. He was preparing to call his daughter, Kylie, next.

"I'm going to tell her she's my little princess, of course," Hutchins said.

Hutchins packed his bags and then Kaza drove him to a Taco Bell for dinner after leaving Camp Pendleton.

He'll be allowed to remain free while the U.S. Court of Appeals for the Armed Forces decides whether to affirm or overturn the Washington court's ruling. The court is expected to hear arguments from both sides this fall and could take until next year to make a decision.

Navy Secretary Ray Mabus said last year that he believes Hutchins was the ringleader in the premeditated murder plot and attempted cover-up, and that he should complete the full sentence. Hutchins was initially sentenced to 14 years but that was later reduced.

Hutchins has said he was not with his squad at the time and that members of his squad told him they had killed an insurgent leader. Hutchins said he did not learn of the mistake until after the investigation.

If the court rules in his favor, Hutchins has said that he wants to live with his parents in Plymouth, Mass., and help them pay off their mortgage since they refinanced their home several times to cover his legal expenses. He hopes to work at the local sheriff's department, where his brother works.

NORFOLK -- Sometime next week, Petty Officer 2nd Class Matthew McCabe will fly west and rejoin a group of his fellow SEALs training in Nevada's harsh high desert.

For the first time in more than seven months, he will throw himself into the job that he loves. Instead of reliving what happened one night in Iraq last September, hours after he took an alleged Iraqi terrorist into custody, the 24-year-old commando will concentrate on preparing for future missions.

McCabe's future with the SEALs was in doubt before a jury acquitted him Thursday on charges of assaulting a detainee and lying about it to investigators.

Last month, two other members of SEAL Team 10, Petty Officer 1st Class Julio Huertas and Petty Officer 2nd Class Jonathan Keefe, were acquitted on related charges at courts-martial in Iraq.

"We're all going to move on with our careers," McCabe said after the verdict. "It's all over and done with. ... I can't wait to actually focus on work."

The cases against the three SEALs were based on statements from Ahmed Hashim Abed and Petty Officer 3rd Class Kevin Demartino, the Navy master-at-arms charged with guarding him for a few hours after his capture.

Abed didn't appear in person, but his testimony was recorded and played back for the seven-member jury. He was far from a sympathetic character. In addition to his alleged involvement in the murder of four Blackwater contractors in Fallujah in 2004, McCabe's lawyers said Iraqis knew Abed as "The Finisher." He was reputed to have the decapitated bodies of his victims delivered to their families' doorsteps.

Defense lawyers continually reminded jurors of the alleged victim's background.

We're here because a mass murderer, a vile person cloaked in a human body, said 'I was beaten,'" Haytham Faraj told the jury during closing arguments.

Questions about Abed's treatment arose shortly before he was transferred to Iraqi custody, when the SEAL detachment commander noticed blood on Abed's clothes.

He called a meeting of all the personnel who'd been in contact with Abed to ask them what happened. A day or two later, Demartino came forward, saying he'd seen McCabe punch Abed while Huertas and Keefe watched.

The matter was investigated, and made its way up the chain of command. When the three SEALs chose not to have the matter handled administratively, Army Maj. Gen. C.T. Cleveland, head of Special Operations Command Central, decided to proceed to courts-martial.

His decision sparked an outcry: More than 100,000 people signed online petitions asking the charges be dropped. Politicians said they were outraged; commentators seized on the cases as evidence of political correctness run amok in the military.

Many people pointed out that terrorist training manuals instruct followers to allege mistreatment, and McCabe's lawyers entered excerpts from the so-called Manchester Manual into evidence to make that point.

Just as crucial to the case were a half-dozen witnesses, many of them SEALs, who contradicted Demartino's version of events.

Faraj and fellow defense attorney Neal Puckett said the acquittals prove the military justice system works. And though in the past both have been critical of Cleveland's decision to court-martial the SEALs, the attorneys were more philosophical after the victory.

No terrorist organization can claim that the American military didn't press forward and really investigate," Faraj said.

Added Puckett: "Maybe the specter of Abu Ghraib is dissipating a little bit."

Cleveland defended his handling of the matter, saying detainee abuse has "strategic implications" for the military and national security.

Despite the opinion of some of those who preferred that these charges not proceed, I allowed these charges to go forward because I truly believe that the best process known for uncovering the truth, when the facts are contested, is that process which is found in our adversarial justice system," Cleveland said in a statement.

I will continue to take allegations such as this seriously. ... I look forward to Huertas, McCabe and Keefe returning to their team and continuing their duties in defending our great nation."