The encounter you describe is indeed from another scenario--it's from the Righteous Fire campaign. Killing Menesch is the last mission that you do before going after the Retros themselves, and it nets you $50,000 from Confed plus Lynch will do a free reset of your reputation (factions' regard for you is reset to the initial levels). If you want your reputation reset again after this, you have to pay $50,000 to Lynch.
In the Steltek campaign, you meet Lynch on New Constantinople after finishing the Talya series of smuggling missions. He will research the artifact for you, but then will send his men to try to eliminate you once he finds out how valuable it is.