Former Louis Berger CEO, 79, Sentenced in Government Overbilling Fraud
Derish Wolff in 2003, former CEO of Louis Berger, was sentenced to one year of house arrest
Louis Berger is based in Morristown, N.J.; Wolff is a resident of Bernardsville., N.J., said Fishman.
Fishman said Wolff, a nephew of firm founder Louis Berger, "led a conspiracy to defraud USAID by billing the agency for overhead and other costs "at falsely inflated rates on so-called 'cost reimbursable' contracts, including hundreds of millions of dollars in contracts" for reconstruction of war-devastated infrastructure in Iraq and Afghanistan.
According to Fishman, the overbilling continued from 1990 through 2009, "and was carried out by numerous [Louis Berger] employees at the direction of Wolff."
Wolff and Louis Berger parted ways in 2010, when his former company settled potential charges against it.
"Derish Wolff has been separated from the company since late 2010, and the company has reformed its management, processes and systems since that time," the company said in an emailed statement on May 8. The firm said it has spent more than $25 million on restructuring and other reform-related investments.
These include an expanded global business conduct program and on-line training in eight languages launched in 2013 and a new enterprise resource planning system in its international and services operations implemented in 2014.
Two former financial staffers, CFO Salvatore Pepe and controller Precy Pelletieri, pleaded guilty in 2010; they and others linked to the fraud are no longer at the firm, it said. A Fishman spokesman says the two will be sentenced on June 4 and 5, respectively.
Looking for quick answers on construction and engineering topics?
Try Ask ENR, our new smart AI search tool.
Ask ENR →
The firm also signed a deferred prosecution agreement with the U.S. Attorney, suspending prosecution of any criminal charges, in exchange for an estimated $69-million settlement.
Louis Berger says that as part of that settlement, it agreed to conduct internal investigations into corporate-wide activities overseas in 2010 and prior, and has been in ongoing discussions with the U.S. Justice Dept. to settle potential Foreign Corrupt Practice Act issues that the firm says it uncovered in that probe.
"We hope to have an agreement in late May or early June so we can finally close the chapter on this era of the company’s history," says the firm in a statement.
Wolff had led one of the country's most prominent engineering consultants and contractors, with more than 6,000 employees, which specializes in work overseas in difficult environments.
He appeared on the cover of ENR on July 28, 2003.
One industry top executive with international design experience said the sentence was "not surprising given [Wolff's] age."
He said "a plea deal usually involves a sentence the defendant and prosecutor agree on to recommend to the judge, who doesn't have to take that recommendation but nearly always does."
