The U.S. Justice Department said it had resolved investigations into Balfour Beatty Communities, one of the U.S. military's largest private landlords, after it pleaded guilty Wednesday to one count of major fraud and agreed to pay more than $65 million in fines and restitution.
Balfour Beatty, which was being investigated for defrauding the U.S. Air Force, Army and Navy, was not immediately available for comment. The company is a unit of British infrastructure conglomerate Balfour Beatty Plc.
In 2019, Reuters reports described how Balfour Beatty employees falsified maintenance documents at Air Force bases to help the company qualify for incentive fee payments, citing five former employees who said they had falsified records, company emails and internal Air Force communications. Service members and their families were exposed to asbestos, vermin, mold and raw sewage.
The reports prompted an investigation by the Air Force Office of Special Investigations and the Inspector General’s Defense Criminal Investigative Service.
U.S. District Judge Emmet Sullivan accepted the company's guilty plea on Wednesday and sentenced it to pay more than $65 million, serve three years of probation and engage an independent compliance monitor for three years.
"Instead of promptly repairing housing for U.S. service members as required, Balfour Beatty Communities lied about the repairs to pocket millions of dollars in performance bonuses," Deputy Attorney General Lisa Monaco said in a press release. "This pervasive fraud was a consequence of Balfour Beatty Communities' broken corporate culture."
Stacy Cabrera, a former housing manager at Texas’ Lackland Air Force Base who told Reuters she felt pressure to manipulate records to meet the bonus goals, pleaded guilty of major fraud in April. Rick Cunefare, a former Balfour Beatty regional manager who oversaw bases in Oklahoma, Texas and other states, pleaded guilty earlier this year of major fraud.
According to court documents, Balfour Beatty Communities, headquartered in Malvern, Pennsylvania, operated privatized military housing communities at 21 Air Force, 18 Navy and 16 Army bases across the United States, in which tens of thousands of service members and their families lived, the Justice Department press release said.