Louis Berger International Inc: The Bribes Behind the Project Invoices

The Louis Berger International Inc FCPA case concerned approximately $3,934,431 in bribes to foreign officials to secure government contracts in Indonesia, Vietnam, India and Kuwait. In its 2015 deferred prosecution agreement, International admitted responsibility for the scheme, including false invoices and payments disguised as ordinary project expenses. For someone who knows what a vendor actually did, the gap between the invoice and the work can expose who the payment served.

International assumed responsibility for international operations and liabilities previously carried by other Berger Group Holdings businesses. The agreement’s account of those operations describes engineering, architecture and construction management work, with employees and agents hiding bribes behind inflated or fictitious invoices. In foreign bribery cases, the project can be real while the reason for paying a supposed service provider is false.

Indonesia: A Different Contractor, the Same Bribe

Under its deferred prosecution agreement, International admitted that employees and agents used fees and per diems to conceal bribes tied to Indonesian government contracts. Money traveled from a New Jersey bank account to the company’s Indonesian account or to subcontractors that provided no legitimate services. Agents and intermediaries handled payments to officials, while employees also paid directly or through companies they owned.

An agent’s email to a senior executive, reproduced in the criminal complaint, explained the label:

The agreement also describes a change in contracting roles. The company placed a one-person consulting business above it as the prime contractor and took the subcontractor role, knowing that the prime contractor would pay bribes. In the emails reproduced in the agreement, a senior executive proposed having the lead firm deduct a management fee from the company’s invoices.

We see the absurdity in that change: the executive objected to paying a commitment fee while proposing a management fee for the same arrangement. Someone familiar with the project could explain why the contracting roles changed and what the lead firm was expected to do. That knowledge connects the agreement between companies to the official whose cooperation they wanted.

Vietnam: An Invoice Written Inside the Company

International’s admissions describe a local foundation that supplied labor and operational support while also serving as a channel for bribes in Vietnam. The company sent money from New Jersey to an account it held jointly with the foundation, disguising transfers as donations or payments against foundation invoices. A senior executive, an employee and others withdrew cash and paid officials.

One transaction shows who created the supposed outside bill. The agreement describes an $18,000 draft invoice created on the computer used by a senior executive’s assistant. An identical invoice on foundation letterhead then reached the company and received that executive’s approval to pass bribe money to government officials. The apparent outside request began on the company’s own computer.

When the foundation was preparing to cease operations, the agreement says the company generated bribe money by paying vendors for services they had never performed. Those vendors became channels for payments to officials. For an insider in construction and power projects, knowing which vendor actually supplied labor or completed an assignment can connect the project records to the false charge.

The agreement also reproduces an employee’s request for a vendor invoice to clear an advance. The requested description was logistics support and travel cost, even though the employee referred indirectly to the advance’s purpose in the message. A finance employee who knows how an advance was approved and later cleared may be able to explain why an invoice appeared after the money had already gone out.

India and Kuwait: The Payment Behind the Vendor’s Bill

International admitted that its employees, agents and consortium partners concealed bribes for Indian water development projects as vendor payments for services never performed. They circulated a spreadsheet tracking the share of each bribe paid to officials overseeing the projects. A partner’s payment schedule recorded $976,630 in company bribes connected with the Goa project.

The spreadsheet and the invoice served different purposes. One tracked the participants’ actual shares of the bribes, while the other presented a charge for services. Someone who handled the consortium accounts could recognize why a payment appeared in both places and explain the relationship between the partner’s calculation and the vendor’s bill.

For a road construction project with Kuwait’s Ministry of Public Works, International admitted that employees, agents and a joint venture partner paid an official to secure the contract. Some payments appeared as proposal costs; others went through a purported business development contract with another firm. An email reproduced in the agreement connected the intermediary’s proposed billing to a discussion about cash sought by the official. Here, the person who knew what happened at the meeting could explain a contract whose written description concealed its purpose.

The Earlier Billing Case Led to an Internal Inquiry

The Justice Department’s earlier Louis Berger Group announcement describes a former accounting employee’s qui tam lawsuit over inflated federal overhead charges. International’s agreement separately records that, after the government alerted International and Berger Group Holdings to a False Claims Act investigation, Berger Group Holdings investigated internally, discovered potential foreign-bribery violations and reported them. The route from the billing inquiry to the foreign-payment investigation shows why an insider’s knowledge of the accounts can matter beyond a single invoice.

What an Insider Adds to the Accounts

Evidence about a payment becomes more useful when it connects the business decision, the approval and the work actually performed. Consultant agreements, payment approvals, invoices and accounting entries show different parts of that sequence. A person who knows why the assignment changed, who approved it or what was delivered can explain the relationship between them. Connecting that knowledge to the transactions is the work our whistleblower experts do with you.

There is also evidence that whistleblower incentives can change company behavior. The March 2019 working paper Do Corporate Whistleblower Laws Deter Accounting Fraud?, hosted by MIT Sloan, studied companies exposed to state False Claims Acts through state pension fund investments. The study found that exposure reduced the likelihood of accounting fraud by 5% to 9%.

A whistleblower case under the False Claims Act can pay 15% to 30% of what the government recovers. For concerns about foreign payments, our whistleblower experts work with you on the FCPA whistleblower program questions and the transaction you know.

You Know What the Project Actually Required

If you saw costs reassigned or consultant payments that the project work cannot explain, speak to one of our Whistleblower Experts about the transaction. We connect your knowledge of the work to the payment decisions and bring in whistleblower lawyers experienced in foreign bribery or government-contract fraud to build your strongest whistleblower case. We stay beside you as that account becomes a case worth pursuing.