U.S. Govt Intervenes in False Claims Act Suit Against Govt Contractor
The government has filed suit under the False Claims Act against Derish M. Wolff and Salvatore J. Pepe, respectively the former CEO and CFO of Louis Berger Group Inc. (LBG), for conspiring to overbill the U.S. Agency for International Development (USAID) and other government agencies for costs incurred performing reconstruction contracts in Afghanistan, Iraq, and other countries, the U.S. Department of Justice announced last month.
The government’s complaint alleges that Wolff and Pepe designed and directed various accounting schemes that resulted in LBG billing the government for indirect overhead costs at inflated rates. According to the complaint, for example, Wolff and Pepe shifted portions of salaries of LBG executives and accounting personnel from contracts paid for by foreign and state governments and private entities to contracts paid for by the United States. Wolff and Pepe allegedly certified the false rates and submitted them to the government in annual financial reports.
The United States resolved criminal and civil claims against LBG arising from this conduct on Nov. 5, 2010. At that time, LBG entered into a Deferred Prosecution Agreement and paid $50.6 million to resolve False Claims Act allegations. Pepe pleaded guilty on that date to a charge of conspiracy to defraud the government and was later sentenced to one year probation. Wolff pleaded guilty to the same charge on Dec. 12, 2014, and was later sentenced to 12 months of home confinement and required to pay a $4.5 million fine for his role in the scheme. The complaint filed today asserts civil claims against Wolff and Pepe.
The United States filed its complaint in a lawsuit originally brought under the qui tam, or whistleblower, provisions of the False Claims Act, by Harold Salomon, an LBG accountant from March 2002 to October 2005. Under the Act, a private citizen can sue on behalf of the United States and share in any recovery. The United States is also entitled to intervene in the lawsuit, as it has done in this case.
The Chanler Group, in association with the Hirst Law Group, represents whistleblowers who take action under the False Claims Act to report fraud committed against the federal and state governments. We have years of experience representing whistleblower clients who expose every kind of fraud against the government, including health care fraud, contract fraud, and tax fraud. Read more about our expertise in False Claims Act cases and how you can take action.