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A Whistleblower Caught Between Two Worlds

Posted  November 30, 2017

By the C|C Whistleblower Lawyer Team

Forbes reports on the story of whistleblower Brian Aryai who brought a qui tam case in 2009 alleging a scheme of overpayments to labor union foremen by construction companies. The case was recently unsealed in September 2017 and has exposed the troubles Aryai faced when he was seemingly caught in a turf battle between two powerful former United States Attorneys. The two former United States Attorneys were former Attorney General and former United States Attorney for the Eastern District of New York Loretta Lynch and former United States Attorney for the Southern District of New York Preet Bharara.

The case involved a schemed dubbed the “eight plus two” scheme where Aryai alleged that unions billed two additional hours of overtime pay for labor union foremen who had not worked those hours in addition to the normal eight hours they did work. Aryai alleged that this happened and many large construction companies including the one he worked for Bovis Lend Lease. Aryai’s evidence included surveillance of foremen on the worksite at 130 Liberty Street in lower Manhattan, the former Deutsche Bank building that was heavily damaged in the 9/11 attacks and was subsequently dismantled.

Aryai went to see Loretta Lynch in early 2009 when she was a partner at Hogan Lovells (then known as Hogan & Hartson) and described the case. Lynch eventually returned to the position of United States Attorney for the Eastern District of New York. While at the EDNY Lynch entered into a $56 million deferred prosecution agreement with Bovis related to Aryai’s claims. Prior to this occurring, Aryai was fired for raising concerns internally and turning over his findings to Lynch. In June 2009, Aryai filed a qui tam case under the False Claims Act in the United States District Court for the Southern District of New York. Preet Bharara was sworn in as the United States Attorney for that district two months later. Aryai named his former company Bovis and other large construction companies including Skanska, Turner Construction, and Plaza Construction.

Aryai was upset that his attorney filed the case in the SDNY and for his case to be transferred to the EDNY where he had a good working relationship with Lynch. In the meantime Aryai went to work for the United States Marshals Service in the Asset Forfeiture Program. During that time in 2011, Aryai accused an official of insider dealings and was outed as a whistleblower by an assistant United States Attorney in Bharara’s office. A later OIG report found no wrongdoing on the part of the employee Aryai accused. Aryai later lost his job and blamed Bharara in a series of letters.

This led to later friction with Bharara who refused to transfer Aryai’s case from the SDNY to the EDNY. Lynch was sympathetic with Aryai but recognized that without the case transferring EDNY there was not much she could do to direct the investigation. Lynch later left the EDNY to become the Attorney General of the United States in 2015. Eventually, Bharara was fired by President Donald Trump in March 2017 and in August 2017, acting United States Attorney for the Southern District of New York Joon H. Kim sent a letter saying the United States has declined to intervene in Aryai’s case. The case was unsealed in September 2017. It remains to be seen whether Aryai intends to move forward with his claims following the declination of intervention.

Tagged in: Falsifying Invoices, FCA Federal, Government Procurement Fraud, Whistleblower Case,