Balfour Beatty to pay £ 49million for US military fraud

Balfour Beatty is due to pay the US government $ 65.4million (£ 49million) after pleading guilty to major fraud related to falsified military housing maintenance records.

The contractor’s U.S. affiliate, Balfour Beatty Communities, maintained 55 military bases, earning performance fees for various measures, including proof of residents’ satisfaction with their work.

From 2013 to 2019, some of its employees submitted false information showing that it had met maintenance and resident satisfaction targets in several military housing projects. The fraud included altering data in property management software and destroying resident comment cards to falsely inflate the proportion of satisfied responses.

Deputy Attorney General Lisa O Monaco said: “Instead of quickly repairing US military housing as needed, [Balfour Beatty Communities] lied about repairs to pocket millions of dollars in performance bonuses.

“This widespread fraud was the consequence of [its] shattered corporate culture that favored profit over military well-being.

Balfour Beatty apologized and said the actions were contrary to how he expects employees to behave.

Just before Christmas, the company pleaded guilty to one count of major fraud against the United States. District Judge Emmet G Sullivan accepted the plea and ordered him to pay more than $ 33.6 million (£ 24.9 million) in criminal fines and over $ 31.8 million (23 , £ 56million) in restitution to the US military, serve three years of probation and participate in an independent compliance review for three years.

Separately, Balfour has reached a settlement to resolve its civil liability for $ 35.2million (£ 26.1million). He will be credited with the sums he owes for his criminal plea.

As part of its plea deal, Balfour agreed to continue to implement a compliance and ethics program designed to end any future violations of US anti-fraud laws across all of its operations.

United States Attorney for the Southern District of Georgia, David H. Estes, said: “The men and women who live in military housing across our country […] deserve prompt and professional maintenance from their housing providers. This [Balfour Beatty Communities] not only would fail to provide this service, but would also falsify information to line their pockets is despicable.

FBI Deputy Director Paul M Abbate called the crime “shameful.”

In June of last year, it was announced that former Balfour managers Rick Cunefare, 61, of Glendale, Ariz., And Stacy M Cabrera, 47, of Converse, Texas, had pleaded guilty to “major fraud. ” On the question. The latest statement from the US Department of Justice said other people were also involved in the crime, although it did not say whether other people would face charges.

A statement from Balfour Beatty said he had fully cooperated with the Justice Department’s investigation into the matter.

He added, “Balfour Beatty is committed to the highest standards of ethical conduct. The wrongdoing that has taken place is totally contrary to the way the company expects its employees to behave. The company apologizes for the actions of Communities to all of its stakeholders. It has been made clear to all employees that violations of policies, procedures or laws will not be tolerated. Communities welcome the appointment of the Independent Compliance Monitor and look forward to constructive engagement. “

He added that he had carried out a thorough review of the operations of the branch and made a series of changes to prevent such faults from recurring in the future, including the restructuring of his management team and the appointment. new leaders. It also introduced new surveillance controls for its housing maintenance system.

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