The Louis Berger Group has agreed to pay a record sum to settle its three-year dispute with the U.S. government over allegations it overbilled the U.S. Agency for International Development for reconstruction work in Iraq and Afghanistan. The amount: USD69.3 million.
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The sum comprises USD18.7 million in criminal penalties and USD50.6 million in civil penalties, the largest ever imposed on a contractor working in the two war-torn countries, The New York Times notes.
“They manipulated the formula for allocating indirect costs of their work on the invoices they submitted for the reconstruction projects in Afghanistan and Iraq,” Paul Fishman, the U.S. attorney in New Jersey, told Bloomberg.
USAID will not ban the New Jersey-based firm from future contracts based on its remedial efforts, Fishman said.
The U.S. Justice Department agreed to defer prosecution of the case against the consulting firm. The agreement requires the private company to reform its practices under a federal monitor, Reuters reports.
Meantime, two former Louis Berger employees have pleaded guilty in a federal court in Newark, N.J., to overbilling the U.S. government from 2001 to 2007.
Salvatore Pepe, former chief financial officer, and Precy Pellettieri, former controller, entered their guilty pleas Friday (Nov. 5). The two face 30 months to 37 months in prison, Reuters reports.
“LBG is a stronger company today as a result of this settlement as well as the company’s corporate improvement program,” Larry Walker, the firm’s president, said in statement. “The improvements made to our systems, policies and structures over the past four years have paved the way for a sustainable future and for the company’s continued leadership in providing the highest quality of services to our clients in an ethical, transparent and compliant manner.”
