U.S. v. Alrai

USA v. Imran Alrai

Civil No. 1:18-cr-192-JL

No. 2021 DNH 116

United States District Court, D. New Hampshire

September 10, 2021

AMENDED ORDER

Joseph N. Laplante United States District Judge

Before the court is the defendant's motion for a new trial or the dismissal of his charges based on allegations that the prosecution withheld evidence in violation of Brady v Maryland, 373 U.S. 83 (1963), and the court's decision turns on the materiality of this evidence and the prejudicial effect of its suppression. The defendant Imran Alrai was indicted in November 2018 on multiple counts of wire fraud and other crimes. The indictment was based on suspicions that Alrai used his role as Vice President of Information Technology (IT) at United Way of Massachusetts Bay and Merrimack Valley to cause United Way to hire DigitalNet Technology Solutions, a company with which Alrai had undisclosed ties, as a vendor for IT services, resulting in millions of dollars in payment from United Way to DigitalNet from 2012 to 2018. At the close of a ten-day bench trial in December 2019, this court convicted him on most counts and acquitted him on others. This court found Alrai guilty on 44 counts of wire fraud, money laundering, and transportation of stolen property and not guilty on nine counts of money laundering, aggravated identity theft, and failure to file reports of foreign banks and financial accounts (“FBAR violations”).

In preparation for his sentencing hearing, Alrai moved for further discovery regarding the opinion of the prosecution's expert witness, Greg Naviloff, on the loss United Way incurred due to Alrai's alleged fraud. In an unusual twist, Naviloff originally developed this opinion, in large part, while working as a consultant for United Way, the victim, under the supervision of United Way's outside counsel, John J. Commisso. Alrai's post-conviction discovery requests led to the production of expert billing statements, expert emails, and technical data Naviloff and his team accessed and used, some of which the prosecution now agrees should have been produced prior to trial. Following months of post-conviction discovery, Alrai filed the instant Brady motion.

After reviewing the briefs and record and conducting a three-day evidentiary hearing on this motion, the court concludes that the prosecution withheld or otherwise failed to disclose evidence in violation of Brady. In short, defense counsel could have used some of the withheld documents to challenge key aspects of the prosecution's case, by attacking the credibility and reliability of Naviloff's expert opinion and highlighting Commisso's potentially biased and excessive involvement in the development of the prosecution's case. On top of these Brady violations, the prosecution repeatedly asserted that it had satisfied or exceeded its discovery obligations, and that the defendant's discovery requests were desperate or excessive, further complicating and obstructing the discovery process in this case. The court is disinclined to minimize the prejudice caused by each of these newly disclosed documents and the prosecution's distracting and false assertions regarding discovery, as such an exercise would be unreliable and speculative. Accordingly, the court grants Alrai a new trial, this time before a jury.

L Applicable legal standard

Alrai moves for the dismissal of his indictment or a new trial based on alleged violations of Brady. In Brady, the Supreme Court held “that the suppression by the prosecution of evidence favorable to an accused . . . violates due process where the evidence is material either to guilt or to punishment, irrespective of the good faith or bad faith of the prosecution.” 373 U.S. at 87. In this way, Brady places on the prosecution an “affirmative duty to disclose evidence favorable to a defendant . . . .” Kyles v Whitley, 514 U.S. 419, 432 (1995). Importantly in this case, this includes “a duty to find any evidence favorable to the defendant that was known to those acting on the government's behalf[, ] . . . including] other members of the prosecuting team [and] police investigators working for the prosecution.” United States v Bender, 304 F.3d 161, 163-64 (1st Cir. 2002) (internal citations omitted).

A Brady violation consists of three elements “[t]he evidence at issue (whether exculpatory or impeaching) must be favorable to the accused; that evidence must have been either willfully or inadvertently suppressed by the government; and prejudice must have ensued.” U.S. v. Connolly, 504 F.3d 206, 212 (1st Cir. 2007) (quoting Strickler v. Greene, 527 U.S. 263, 281-82 (1999)). The test for prejudice under Brady “is not whether the defendant would more likely than not have received a different verdict with the [suppressed] evidence, but whether in its absence he received a fair trial, understood as a trial resulting in a verdict worthy of confidence.” Kyles, 514 U.S. at 434.

Under the Brady prejudice standard, the withheld evidence must be “considered collectively, not item by item.” Id. at 436. Also, the evidence must be “evaluated in the context of the entire record.” U.S. v. Agurs, 427 U.S. 97, 112 (1976). Once the elements of favorability, suppression, and prejudice are satisfied, a Brady violation is found, “regardless of [whether the defendant] requested]” the Brady material.” Kyles, 514 U.S. at 433 (quoting U.S. v. Bagley, 473 U.S. 667, 685 (1985)).

II Background

A. The lead-up to the criminal case

The defendant Imran Alrai served as Senior Director of IT and later Vice President of IT at United Way from May 2012 until he was terminated in June 2018. In these roles, Alrai managed the IT department at United Way. In August 2012, Alrai hired DigitalNet to complete an IT Network Health and Security Assessment for United Way. In 2013, United Way decided to hire an IT vendor to “outsource much of the organization's IT functions”; Alrai orchestrated the vetting process and ultimately selected DigitalNet.^[1] By January 2013, United Way had contracted with DigitalNet to provide the following IT services: hosting, data management and backup, virtual desktops, on-site support, after-hours and weekend support, email and mobile device access, security, disaster recovery and business continuity, and service level agreement.^[2] United Way paid DigitalNet over $6 million for various IT services from 2012 to 2018.

In March 2018, United Way learned of a potential, personal connection between Alrai and DigitalNet. In May 2018, United Way hired John J. Commisso to “represent [United Way] and provide legal services, advice, and counsel regarding allegations that Alrai was defrauding [United Way] while employed” there.^[3] That same month, Commisso began an internal investigation into the matter, and he contacted the United States Attorney's Office in Boston “to discuss Alrai's actions.”^[4] Based on the internal investigation, United Way came to believe that Alrai had not disclosed to United Way that his father owned DigitalNet.^[5] In June, Commisso and two other United Way representatives spoke with the Assistant United States Attorney who became the lead prosecutor on this case, FBI Agent Jill Laroe and other representatives of the government regarding Alrai's allegedly fraudulent conduct. According to FBI files from the meeting, at that time, the New Hampshire USAO had already initiated an investigation into overseas money transfers potentially involving DigitalNet and Alrai.^[6]

During the same period, United Way hired the company Technology Business Solutions and its President John Meyer, “to provide services in connection with [United Way's] IT systems . . . and prepare to take control of the IT systems away from Alrai . . . .”^[7] United Way terminated Alrai on June 14, 2018, and TBS and Meyer took over United Way's IT systems.

United Way received a grand jury subpoena around June, as well.^[8] In order to respond to the subpoena, United Way gathered roughly 723, 000 electronic and paper files and deposited them on an electronic database.^[9] United Way also retained Ralph Losey, National E-Discovery Counsel at Jackson Lewis P.C., and placed Commisso and Losey in charge of the document review process. Ultimately, United Way produced more than 38, 000 pages of documents regarding Alrai and DigitalNet to the government in response to the grand jury subpoena.^[10]

Around July 2018, United Way launched another internal investigation into Alrai's alleged fraud, focusing on how it took place, the resulting economic impact, and future prevention.^[11] Commisso retained RSM U.S. LLP to conduct the internal investigation. Naviloff, a Director in the Dispute Advisory Services practice at RSM, served as the relationship lead.^[12] Naviloff is a “Certified Public Accountant [], Certified in Financial Forensics [], and Accredited in Business Valuation[, ]” and he has been involved in forensic investigations, busines valuations, and breach of contract claims for years.^[13]

RSM's work for United Way consisted of three different work streams - (i) the collection and preservation of electronic records and provision of digital forensics and incident response services (“data security investigation”), a workstream and team over which Naviloff had “no direct oversight”; (ii) an accounting analysis of the economic loss to United Way from Alrai's alleged fraud, resulting from “duplicative billing, excessive billing, and billing for services not provided to [United Way]” (“loss analysis”), completed under Naviloff's supervision; and (iii) an internal control evaluation, or root cause analysis, reviewing United Way's procurement of DigitalNet's services and ways to strengthen internal controls.^[14] The second workstream, Naviloff's loss analysis, is most pertinent to the instant...