Design Firms' Ex-Execs Get Jail in Pay-to-Play Schemes
James McClung, a former senior vice president of engineer Louis Berger, Morristown, N.J., and William Birdsall, ex-senior vice president of the now defunct Birdsall Services Group, Monmouth County, N.J., earlier this month received jail sentences in separate New Jersey courts related to their roles in unrelated bribe schemes of contracting officials.
McClung, 60, was sentenced in U.S. District Court in Trenton to one year in prison for violations of the Foreign Corrupt Practices Act for bribing officials in India, Indonesia, Vietnam and Kuwait to win contracts for the firm, from which the Dubai-based executive was terminated in 2012.
Richard Hirsch, 62—another former Berger senior vice president who had been based in the Philippines before he was also was fired in 2012—was sentenced to two years of probation and a $10,000 fine for his role in the multiyear scheme.
The wrongdoing by both executives was uncovered as part of a company-instigated probe of ethics violations related to its overseas federal contracting work.
Louis Berger agreed last year to pay a $17.1-million criminal penalty in a deferred prosecution agreement with the U.S. government.
The company in June announced a civil suit against Hirsch to recover unspecified compensatory and punitive damages, and said it had filed a similar suit against McClung on July 14.
Louis Berger contends that McClung set up overseas companies to bill it for nonexistent work or work at higher rates, and did not disclose his financial interests in those firms, according to a review of the suit by online legal publication Law360.
McClung's companies also charged Louis Berger at least $3 million in unsubstantiated or inflated charges for worker placement, rent and construction. Louis Berger also claim seelks to recover more than $150,000 in legal fees related to the U.S. government probe of him before his complicity in the illegality was apparent.
Birdsall was sentenced to nine months in county jail as part of a two-year probation for his role in channeling more than $1 million in corporate political donations through employees. He pleaded guilty in May.
His brother, former firm CEO Howard Birdsall, was sentenced in April to four years in jail. The executives also are debarred for 10 years from bidding on public contracts in New Jersey or owning more than 5% of a firm that does.
The company went bankrupt in 2013 and assets were acquired by another firm. Attorneys for the executives did not comment to media.