Ex-Louis Berger Group CEO Pleads Guilty in USAID Fraud

The former chief executive officer of a New Jersey engineering consulting firm, Louis Berger Group Inc., pleaded guilty to overbilling the U.S. for reconstruction contracts in Iraq and Afghanistan.

Derish Wolff, 79, who was also president of the company, admitted today in federal court in Trenton, New Jersey, that he conspired to defraud the U.S. Agency for International Development over nearly 20 years, U.S. Attorney Paul Fishman said in a statement.

“Derish Wolff admitted today that he enriched himself and his company with money intended for important reconstruction projects in Afghanistan and Iraq,” Fishman said.

Wolff’s plea follows the company’s agreement in 2010 to pay $69.3 million to resolve criminal and civil probes of its overbilling. The Justice Department agreed to defer prosecution of the case against the company, which pledged to reform its practices under a monitor. Two employees also pleaded guilty then to conspiring to defraud USAID by inflating overhead rates.

Louis Berger International, a unit of Louis Berger Group, got about $736 million to modernize a power system and rehabilitate the Kajakai Dam in Afghanistan, prosecutors said. The company won the second-most contracts for reconstruction work in Afghanistan over a three-year period ended in 2009, according to a 2010 report by the Special Inspector General for Afghanistan Reconstruction.

From 1999 to 2007, former executives submitted “false, fictitious and fraudulent overhead rates for indirect costs and correspondingly resulted in overpayments by the government in excess of $10 million,” the company admitted as part of its deferred-prosecution agreement.

Wolff, a resident of Bernardsville, New Jersey, faces as many as 10 years in prison. He is scheduled to be sentenced on March 20.

The case is U.S. v. Wolff, 11-cr-719, U.S. District Court, District of New Jersey (Newark).

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