Property developer Lend Lease is facing more legal action in the United States, after it received subpoenas for alleged over-billing practices by its Bovis arm at various New York construction projects, including the September 11 Memorial site.

According to The New York Times, the investigation was spurred by a former federal agent named Brian Aryai, who had served as senior vice-president at Bovis. It said Mr Aryai had a history of working in various investigations involving money laundering, fraud and other white-collar crimes.

This is the second legal stoush the group's contracting arm has incurred in New York as it works as one of the contractors on the clean-up and excavation of the former site of the World Trade Centre.

In 2006, the group was issued with claims from emergency services personnel and other workers over the clean-up and rescue of people on the World Trade Centre site. Lend Lease remains covered by a $US1 billion ($1.3 billion) insurance note as it battles the case through the US courts.

There remain about 5300 defendants to the class action, but as yet no definitive cash claim has been made to the courts.

A year later Lend Lease was also involved in investigations about a fire that killed two firefighters on the project to demolish a 41-storey Deutsche Bank building.

In a short statement yesterday, Lend Lease said it was co-operating fully with the authorities and that it had also conducting its own investigations into the matters.

Investors shrugged off the news by and pushed the shares up 7 cents to $7.46.

Goldman Sachs JBWere's head of research, Simon Wheatley, said unless Lend Lease is charged with widespread fraud, which would have negative implications for Bovis's US operations, "at this stage we do not factor in the investigation as meaningful in the context of Lend Lease's valuations''.

"The investigations arise from allegations made by a former employee. These include an allegation relating to billing practices in respect of foremen taken out of the union pool where excess costs incurred by Bovis Lend Lease for payments made to union foremen were billed to clients. The union pool is a source of labour available to contractors in New York which is used by Bovis Lend Lease,'' the statement from Lend Lease says.

ccummins@smh.com.au

SMH