Judge dismisses $18M Navy kickbacks mastermind's lawsuit against whistleblowers

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PROVIDENCE, Rhode Island — A former Navy employee who masterminded an $18 million kickback scheme won't be allowed to proceed with a lawsuit against the whistleblowers who helped bring him down.

U.S. District Judge Mary Lisi dismissed the claims Tuesday of Ralph Mariano, a former civilian employee of the Navy, who is serving a 10-year prison sentence for conspiracy, theft of government property and tax evasion. Mariano had counter-sued Rekha and Karan Vasudeva, who in 2006 filed a federal whistleblower lawsuit, prompting an investigation that resulted in the conviction of Mariano and five other people.

The Vasudevas helped set up a Georgia-based company that was allegedly used in the scheme. Their lawsuit is pending.

Lisi's decision adopted the recommendation of Magistrate Judge Patricia Sullivan to dismiss Mariano's counterclaims of malicious prosecution, defamation and violation of federal privacy laws.

In Sullivan's report, she wrote that Mariano's claims of defamation were a "wishful fantasy." She also called him "libel-proof" because he publicly confessed at a plea hearing and was convicted, then was condemned by Lisi during his sentencing as having behaved with arrogance and avarice.

"The criminal proceeding launched by the supposedly defamatory statements ended in his admission of guilt to the charge that he was the mastermind of a criminal scheme involving fraudulent invoices that has had a devastating impact on the Navy, the community and Mariano's family," Sullivan wrote.

Mariano worked for the Navy for 29 years, working at the Naval Undersea Warfare Center in Newport and later at the Navy Yard in Washington. As part of his job, he had the power to approve payments on Navy contracts. He pleaded guilty last year to using his position to funnel payments through contractors and subcontractors to himself and several others.

After pleading guilty but before he was sentenced, Mariano denied the scheme in complaints of prosecutorial misconduct that he sent to the U.S. Department of Justice and to the judge.

Mariano said through his girlfriend, Mary O'Rourke, that he filed his counterclaim in good faith and "was not surprised with the result given the predisposition of this court." O'Rourke was one of the people convicted in the investigation.

A lawyer for the Vasudevas did not immediately return a message seeking comment.

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