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December 24, 2021

US military housing provider pleads guilty to fraud

BBC will pay $33.6m in criminal fines and more than $31.8m in restitution for defrauding the US military.

Balfour Beatty Communities (BBC), a privatised military housing provider, has settled criminal and civil investigations in the US after pleading guilty to one count of major fraud.

The company agreed to pay more than $65m in fines and restitution to resolve the lawsuits.

A unit of British infrastructure conglomerate Balfour Beatty, BBC is a diversified real estate services company and is one of the largest providers of privatised military housing to the US Army, Navy and Air Forces (USAF).

It operated privatised military housing communities at 21 USAF, 18 US Navy and 16 US Army bases.

The company earns a base fee as well as performance incentive fees for property management and maintenance of these military housing communities.

According to court documents, BBC falsified documents to qualify for incentive fee payments despite not meeting stated objectives in several quarters from 2013 to 2019.

Particularly, some company employees changed data in property management software to tamper the metrics and claim bonuses from service branches.

In a statement, US Department of Justice said: “As a result, according to court documents, there were lengthy and unnecessary delays in the resolution of maintenance issues to the detriment of servicemembers and their families.

“In addition, the military service branches were provided an inaccurate assessment of the state of BBC’s military housing communities and were unable to assess, and potentially correct, BBC’s performance.”

BBC will pay $33.6m in criminal fines and more than $31.8m in restitution to the US military.

It will serve three years of probation and agreed to be supervised by an independent compliance monitor for three years.

Separately, BBC signed a False Claims Act settlement to resolve its civil liability for $35.2m.

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