Balfour Beatty fined $65m for defrauding US military

Balfour Beatty has agreed to pay $65m in fines and restitution after pleading guilty to a charge of fraud by a subsidiary operating as a military landlord.

Balfour Beatty Communities (BBC), one of the US military's largest private landlords, was investigated for defrauding the US Air Force, Army and Navy.

The probe found that employees falsified maintenance documents at Air Force bases to help the company qualify for incentive fee payments.

“In reality, BBC did not meet those objectives in many of the quarters during that time,” the US Department of Justice said in a statement.

“Specifically, BBC employees altered or manipulated data in property management software and destroyed and falsified resident comment cards to falsely inflate these metrics and, ultimately, to fraudulently induce the service branches to pay performance incentive fees which BBC had not earned.”

Forces personnel and their families were exposed to asbestos, vermin, mould and raw sewage. Two managers have pleaded guilty in the case.

US District Judge Emmet Sullivan accepted the company's guilty plea and sentenced it to pay $33.6m in penalties and $31.8m in restitution, serve three years of probation, and engage an independent compliance monitor for three years.

"Instead of promptly repairing housing for US service members as required, Balfour Beatty Communities lied about the repairs to pocket millions of dollars in performance bonuses," said Deputy Attorney General Lisa Monaco.

"This pervasive fraud was a consequence of Balfour Beatty Communities' broken corporate culture".

FBI deputy director Paul Abbate said BBC “took advantage of their unique position as a military housing provider and put greed and personal profit above our servicemembers”.