USAID Contractor Faces Fraud Investigation

An infrastructure development project by the U.S. Agency for International Development in Afghanistan. The Louis Berger Group, a USAID contractor, is subject to investigation for allegedly overcharging the U.S government for work. Photo by: USAID Afghanistan / CC BY SA USAID AfghanistanCC BY SA

U.S. federal prosecutors are investigating whether the Louis Berger Group overcharged the government for work.

The probe, now on its third year, focuses on the alleged inflated invoices submitted by the New Jersey-based engineering consulting firm to the U.S. Agency for International Development. Records indicate that Louis Berger has managed more than USD2 billion worth of USAID contracts in Iraq and Afghanistan, The Associated Press reports.

Details of the inquiry surfaced after Derish Wolff, chairman of the parent company Berger Group Holdings, sued the Justice Department last week. He alleged that the government “suggested” he resign to help put an end to the probe.

“[USAID] insinuated that it would debar LBG from [USAID] projects if Wolff did not ‘voluntarily exclude himself’ from government contract related activities, and Wolff complied in order to protect the company,” stated Wolff’s filing obtained by Bloomberg Businessweek.

Although they refuted Wolff’s allegations, prosecutors acknowledged an ongoing negotiation to settle the claims of overcharged invoices. Court filings by the U.S. government also affirmed the existence of criminal and civil investigations into allegations that the company ”defrauded” USAID but did specify the projects that these investigations have been focusing on, The Telegraph notes.  

According to AP, Louis Berger’s officials declined to comment on the issue and instead issued a brief statement.

“LBG has and will continue to cooperate fully with the U.S. government throughout the process as we work toward a resolution,” said a statement from the company. “As it is an ongoing investigation, we cannot comment further at this time.”

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    Eliza Villarino

    Eliza Villarino currently manages one of today’s leading publications on humanitarian aid, global health and international development, the weekly GDB. At Devex, she has helped grow a global newsroom, with talented journalists from major development hubs such as Washington, D.C, London and Brussels. She regularly writes about innovations in global development.