Home » Louis Berger Group Completes Compliance Overhaul
Louis Berger Group completed a costly, condensed two-year program during which it upgraded its compliance and audit systems and functioned with the supervision of a monitor as part of its 2010 settlement with federal prosecutors of fraud and overbilling charges.
Known as a deferred prosecution agreement, the program’s completion marked the end of a painful period for the company that included an initial $69-million settlement of fraudulent billing charges with the U.S. attorney in Newark, N.J.
Based in Morristown, N.J., Louis Berger Group said in a statement Dec. 20 that it spent an additional $20 million since the initial settlement on new accounting systems, electronic expense report and invoicing systems, centralized information management systems, a new FAR-compliant procurement system and budgeting and forecasting systems. Additional funds were spent improving the company’s code of conduct and training.
“The process made us more efficient,” says Larry D. Walker, Louis Berger Group’s president, in a phone interview. “We took improvements that should have started many years ago and condensed them” into a short period of time. “It’s money that should have been spent but we accelerated.”
Walker says the $20-million program was paid for with the company’s normal operating income.
Assistant U.S. attorney Scott McBride says that deferred prosecutions help federal prosecutors avoid penalizing companies and innocent employees “because of the misdeeds of a few.”
Wolff, now 78, was related to the company founder through marriage and had worked at Louis Berger Group for decades.
Walker declined to comment on Wolff or the terms of his departure from Louis Berger Group, where Wolff was a 26% owner. According to McBride, the company paid Wolff roughly 10% of the value of his equity but has withheld tens of millions of dollars more.
McBride says Wolff’s trial is scheduled to begin in May. Wolff’s attorney confirmed the schedule and declined to discuss the possibility of a plea agreement. In its descriptions of the fraud, the U.S. attorney claimed that Berger Group charged overhead for home office employees as if they only worked on federal contracts when those employees actually only spent part of their time working on federal contracts. The inflated charges involved work for the USAID and the Dept. of Defense and the amount involved is believed to be around $10 million.