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Harry Cassin
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Louis Berger pays $17 million to resolve FCPA offenses, two former execs plead guilty

Louis Berger International Inc., a New Jersey-based construction management company, admitted violating the Foreign Corrupt Practices Act and agreed to pay a $17.1 million criminal penalty.

The company said it bribed foreign officials in India, Indonesia, Vietnam, and Kuwait to win construction management contracts. 

Two of its former executives also pleaded guilty to conspiracy and FCPA charges.

Louis Berger entered into a deferred prosecution agreement Friday.

In addition to paying the $17.1 million criminal penalty, the company agreed to enhance its internal controls and retain a compliance monitor for at least three years.

Richard Hirsch, 61, of Makaati, Philippines, and James McClung, 59, of Dubai, each pleaded guilty to one count of conspiracy to violate the FCPA and one substantive count of violating the FCPA.

Hirsch was the senior vice president responsible for the company’s operations in Indonesia, Thailand, the Philippines, and Vietnam. 

McClung was the senior vice president responsible for the company’s operations in India and later for Vietnam. 

They’re scheduled to be sentenced on November 5.

From 1998 through 2010, the DOJ said, the defendants paid $3.9 million in bribes to foreign officials in various countries to win government contracts. 

They hid the payments by recording them as “commitment fees,” “counterpart per diems,” and other payments to third-party vendors.

The DOJ said it gave Louis Berger a DPA because the company self reported the FCPA offenses and made U.S. and foreign employees available for interviews. The company collected and organized evidence for federal investigators and undertook “extensive remediation, including terminating the officers and employees responsible for the corrupt payments.” It also promised to improve its compliance program and internal controls.

In a statement from the company emailed to the FCPA Blog, Louis Berger chairman Nicholas Masucci said: “The DOJ has acknowledged the extensive global reforms undertaken at Louis Berger since 2010. . . . Today’s settlement is the critical final milestone in our reform, as it was important for us to take responsibility for the historic actions of former managers and close the chapter on the company’s pre-2010 era.”

A copy of the complaint against Louis Berger International is here (pdf) and the DPA is here (pdf).


Richard L. Cassin is the publisher and editor of the FCPA Blog. He can be contacted here.

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1 Comment

  1. Most of the cases involving an US company in developing country lead to the exploitation of native professionals who are never party to the intended strategy of business in that country.They usually are the soft targets and conveniently dispensed with.The real beneficiaries and the responsible executives are never unveiled.More or less these are convenient acts of PR and serve no purpose in establishing sustainable proper behavior.Vishnu Goel T&M +919810101238

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