Reuters reports that the former head of a New Jersey-based engineering consulting firm was charged with leading a scheme to overbill the U.S. government by hundreds of millions of dollars for international reconstruction contracts, including work in Iraq and Afghanistan.
Derish Wolff, former president and chief executive of Louis Berger Group Inc is reported to have surrendered to the FBI on Thursday morning, and a judge agreed to release him on a $1 million bond after he appeared in Newark federal court.
Wolff, 76, of Miami, Florida, and Bernardsville, New Jersey, was charged with one count of conspiring to defraud the government and five counts of making false claims.
Last November, Louis Berger Group agreed to pay more than $69 million to the U.S. government to settle charges related to overbilling on contracts for work performed overseas on behalf of federal agencies.
At the time of that settlement, two former top executives at the privately held company also pleaded guilty to participating in an overbilling conspiracy.
Prosecutors said that Wolff was the company's president and CEO from 1982 until 2002 and recently served as chairman of the parent company, Berger Group Holdings Inc.
They said that while at the company Wolff conspired to defraud the U.S. Agency for International Development (USAID) by billing on "cost-plus" contracts for the company's overhead, such as rent, and other indirect costs at falsely inflated rates. The government contends the scheme went on for nearly 20 years.
The lead defense counsel on Wolff's case told Reuters, "Mr. Wolff will plead not guilty because he is not guilty and looks forward to his opportunity to demonstrating that in court."
If convicted, Wolff could face up to 10 years in prison on the conspiracy charge. Each of the false-claims counts carries a maximum penalty of up to five years in prison, according to prosecutors.
Louis Berger Group said in a statement that the individuals associated with the government prosecution are no longer with the company, and that it had made significant changes to its internal controls.