Derish Wolff, the former chief executive of Louis Berger Group, pleaded guilty Dec. 12 to inflating overhead rates for work on cost-reimbursable U.S. Agency for International Development contracts and now faces a possible prison sentence and heavy fines.
His sentencing is scheduled for March, 2015.
The plea agreement in federal court in Trenton represents a bitter conclusion to a career in which Wolff, now 79, led one of the country's most prominent engineering consultants and contractors, excelling at work overseas in difficult environments. A member of the Berger family through marriage, Wolff's worldly and outspoken style made him an engaging figure. He appeared on the cover of ENR on July 28, 2003.
Wolff and Louis Berger Group parted ways in 2010, when his former company settled potential charges against it.
At that time, former Berger chief financial officer Salvatore Pepe and former controller Precy Pelletieri, admitted to participating in a scheme in which they reclassified work hours of accounting employees in the company's New Jersey headquarters from 2003 to 2007 as hours worked by employees who worked on federal projects.
In federal court, according to a statement released by U.S. Attorney Paul Fishman, Wolff admitted to ordering Pepe to target an overhead rate for USAID work of 140%.
"In addition to padding employee's work hours with fake hours supposedly devoted to USAID work," Fishman's statement said, "Wolff instructed his subordinates to charge all commonly shared overhead expenses, such as rent" at Berger's Washington, D.C., office, "unrelated to USAID or other federal government agencies."
The window in which prosecutors claim Berger Group overbilled federal agencies was described in a press release as a "nearly 20-year period" but the focus of the prosecution was on 2003 to 2006. According to an official information released by Fishman's office, Wolff directed staff at Louis Berger Group to reclassify hours raising the overhead recovery rate "despite the objections" or without the knowledge of the employees that performed the work.