Overseas Civilian Contractors

News and issues relating to Civilian Contractors working Overseas

Ex-CEO of Defense Department contractor charged with overbilling

Cliffview Pilot  October 20, 2011

BEHIND THE STORY: The former president and CEO of international engineering consulting firm Louis Berger Group surrendered early today to face a six-count grand jury indictment accusing him of over-billing the government millions of dollars in reconstruction contracts in Iraq and Afghanistan, federal authorities in Newark said.

Derish M. Wolff has a court appearance scheduled this afternoon in U.S. District Court in Newark, they said.

Soon after Wolff — the nephew of company founder Louis Berger — became the firm‘s president in 2002, federal officials awarded a five-year $300 million contract to the Berger group for rebuilding power plants, schools and irrigation systems in Afghanistan.

But the company, among other sleights of hand, shifted overhead costs from private clients to federal and state contracts, hoping they wouldn’t be noticed, federal authorities said.

Two former senior employees with the Morristown-based company pleaded guilty in federal court in Newark last year to their roles in the scheme.

Although he wasn’t identified by name, Wolff is believe to be the mastermind of the plot, which federal authorities said was carried out by the two: Salvatore Pepe, 58, of Tuckahoe, N.Y., LBG’s former Chief Financial Officer, and Precy Pellettieri, 54, of Rahway, the former controller.

Pepe and Pellettieri admitted targeting an overhead rate above 140 – meaning: for every dollar of labor devoted to a USAID contract, LBG would receive an additional $1.40 in overhead expenses and total profits allegedly incurred by LBG

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October 20, 2011 Posted by | Afghanistan, Civilian Contractors, Contractor Corruption, Contractor Oversight, Follow the Money, Government Contractor, State Department, USAID | , , , , | Leave a comment