Wrist Slap for CEO Who Defrauded USAID out of Hundreds of Millions
Former CEO Derish Wolff of Louis Berger Group, one of the country’s largest engineer contracting firms will be confined to his home for a year and have to pay a $4.5 million fine for helping to defraud the federal government out of hundreds of millions of dollars over 20 years. The fine represents a tiny fraction of the amount the company collected from the government.
Wolff, 70, was sentenced by U.S. District Court Judge Anne Thompson for leading a “conspiracy to defraud USAID by billing the agency on so-called ‘cost-reimbursable’ contracts—including hundreds of millions of dollars of contracts for reconstructive work in Iraq and Afghanistan” and for inflating overhead costs.
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Federal prosecutors said the company, tasked with building roads and bridges in Afghanistan and Iraq, charged the government 140 percent of the actual cost for every project it did. That means that for every one dollar of work the contractor did, it received $1.40 extra. Louis Berger was paid more than $2 billon by the U.S. government for its infrastructure work in war zones.
Prosecutors said that between 1990 and 2009, Wolff and his colleagues inflated the costs of their work for USAID by telling accountants to “pad time sheets with hours ostensibly devoted to federal government projects when it had not actually worked on such projects.”
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Beyond logging false work hours, the prosecutor said Wolff routinely instructed his subordinates to bill USAID for all of their overhead expenses—like rent at Louis Berger’s Washington office even though the D.C. office worked on other projects that had nothing to do with the federal government.
After two other company executives pleaded guilty to conspiring to defraud the federal government in 2010, Louis Berger Group agreed to make full restitution to USAID. It settled civil and criminal charges and had to pay $18.7 million in criminal fines and an additional $50.6 million to resolve allegations that it violated the False Claims Act by significantly overbilling USAID.
This Is What America’s 'Dream Home' Looks Like
The dream home for today’s American consumer is just over 2,000 square feet and located outside of a major city, according to a report out today by Trulia.
Consumers polled by the real estate Web site said the top features in their dream home were a backyard deck, a gourmet kitchen, and an open floorplan.
Owning a home is still part of the American dream for 70 percent of those polled, down from 77 percent five years ago. The portion of Americans who want to buy a home one day was highest—hitting almost 90 percent—among millennials.
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Those findings echo the results of a Wells Fargo poll in June, which found that nearly two-thirds of consumers say that home ownership is a “dream come true” and an accomplishment to be proud of.
Despite the desire for home ownership, only 14 percent of those surveyed by Trulia said they would buy a home this year. Nearly 70 percent said they planned on waiting at least two years to make a purchase.
The country’s home ownership rate fell to 63.7 percent in the first quarter, the lowest level since 1989. The rate peaked at 69.2 percent in the fourth quarter of 2004, right before the housing bubble burst.
Just 36 percent of millennials who want to buy a home are currently saving to purchase one. As rents in many cities continue to skyrocket, however, homeownership may become more appealing.
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CVS Quit Selling Cigarettes, but It’s Found a Patch for Sales
CVS executives knew that some of their sales would go up in smoke when they decided last year to stop selling cigarettes. The press release announcing that all 7,600 CVS stores nationwide would stop selling all tobacco products acknowledged that sales would take a hit. Still, the company said, “This is the right thing to do.”
The costs of the decision are now becoming clear. CVS Health’s general merchandise sales slumped 7.8 percent last quarter on a same-store basis, the company said Tuesday. The company claims non-pharmacy sales would have stayed the same if tobacco sales — and the other products cigarette buyers added to their baskets — were removed from sales figures for the same quarter in 2014.
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Same-store sales in the pharmacy category climbed 4.1 percent, boosting overall same-store sales growth to 0.5 percent compared with the second quarter of last year, down from a 1.2 percent year-over-year increase the previous quarter. Net revenue overall grew by 7.4 percent to $37.2 billion, helped by pharmacy services revenue that surged 11.9 percent ($2.6 billion) to $24.4 billion. The company has reportedly increased its market share in the health and beauty categories (it did, however, narrow its full-year earnings forecast).
So even as the move to drop cigarettes has cost the company, its bet on health as the source of future growth may be starting to pay off. CVS stock dropped in the wake of its earnings announcement, but shares are still up more than 15 percent on the year and 44 percent over the past 12 months.
Is the American Dream Dead? Most Parents Think Their Kids Will Be Less Well Off
Parents think their children will be happier and healthier in the future as adults, but also less well off, according to a new report commissioned by insurance company Haven Life.
Only one in eight Americans believe that their children will be better off financially, when compared to their parents. More than half of American parents believe their children will have less disposable income in the future, and only one in five Americans believe their children will enjoy greater quality of life.
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On the other hand, more than 60 percent of adults believe that future generations will lead “as healthy or healthier” lifestyles than adults today. And half of them think their children will grow up to be more environmentally conscious adults who lead greener lifestyles. More than half believe that this future generation will be more ethnically and racially diverse.
The study was done by YouGov for the Haven Life Insurance Agency. YouGov conducted an online poll with a representative sample of 1,124 U.S. adults in the first quarter of 2015.
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Travel Nightmares: How to Avoid Getting Bumped from Your Flight
You're finally on your way out for a summer vacation. The flight was booked months ago. Your bags are packed and ready. You arrive at the airport the recommended 90 minutes before the scheduled departure time (because it's a great long trip, and you've decided to check your bags). After enduring the inhumanity that is the TSA line, you get to your gate. Of course, everyone else has done the same thing, and you hear the familiar strains of "this flight is overbooked, we are offering a travel voucher if you are willing to fly on a later flight."
But you ignore that, as always, because, well, your bags are already on the plane, and you don't want to miss even a second of your long-awaited time away. Still, that $300 voucher sounds tempting. You could use it to help defray the cost of holiday travel in a few months.
Don't do it. Resisting that temptation can be even more rewarding: If the worst still happens and you get involuntarily bumped, you can get a full refund of your ticket price plus up to $1,300 in added compensation.
The AirHelp inforgraphic below lays out the basic dos and don'ts of dealing with an overbookd flight. You can also find more from AirHelp here.
(h/t lifehacker.com)
Blame China for Your Costly Lobster Roll
Looking for authentic, down-home Maine lobster? Head to China.
The upsurge in demand for lobster in China this year has caused the price of the succulent marine crustacean to shoot up to record highs in the U.S., according to Bloomberg News. Wholesale prices for lobsters have clawed 32 percent higher over the last year.
Lacking a lobster industry itself, China used to rely on Australian imports to meet the demand from an expanding middle class that views lobster as a status symbol. But in 2012, as catches off of Western Australia began dwindling and prices of lobster fell in the Gulf of Maine, China changed its main supplier to the U.S.
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Lobster exports from the East Coast are the main reason for the hike in fish and seafood exports to China in recent years, according to U.S. Department of Agriculture data. Over the past seven months, about 60,000 live North American lobsters a week make the 7,500-mile trek halfway across the world. The lobsters must still be alive by the time they arrive in China or else they lack appeal, so they’re packed in wet newspapers and Styrofoam coolers for a trip that must be made in 18 hours or less, according to Bloomberg.
Another reason for the surge in prices was the bitterly cold winter this year, which slowed the catch in Canada and delayed the summer harvest in Maine.
Holding off on your lobster roll until next summer in the hopes that prices will wane? Don’t count on it. The Chinese middle class is still growing rapidly, and the country already consumes 35 percent of the world’s seafood — a number likely to increase.
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