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.
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
Bloomberg at SF Gate July 31, 2011
A U.S. contractor in Iraq overbilled the Pentagon by at least $4.4 million for spare parts and equipment, including $900 for an electronic control switch valued at $7.05, according to a new audit.
Based on the questionable costs identified in a $300 million contract with Dubai-based Anham LLC, the U.S. should review all its contracts with the company in Iraq and Afghanistan, which total about $3.9 billion, said Special Inspector General for Iraq Reconstruction Stuart Bowen.
“The audit found weak oversight in multiple areas that left the government vulnerable to improper overcharges,” Bowen wrote in the forward to his 30th quarterly report, released today. The contract in question was funded with a combination of money earmarked for Iraqi Security Forces and Army operations and maintenance funds.
Among the “egregious examples of overbilling” by Anham were $4,500 for a circuit breaker valued at $183.30, $3,000 for a $94.47 circuit breaker and $80 for a small segment of drain pipe valued at $1.41