A private military housing contractor recently agreed to pay over $65 million to resolve criminal and civil litigations stemming from a scheme to receive undeserved incentive fees from the U.S. military using falsified maintenance reports.
Balfour Beatty Communities LLC (BBC) pleaded guilty on Dec. 22 to one count of major fraud against the United States, a U.S. Department of Justice press release said. The company was sentenced “to pay over $33.6 million in criminal fines and over $31.8 million in restitution to the U.S. military, serve three years of probation, and engage an independent compliance monitor for a period of three years.”
“This pervasive fraud was a consequence of BBC’s broken corporate culture, which valued profit over the welfare of servicemembers,” Deputy Attorney General Lisa O. Monaco said in the release. “Today’s global resolution sends a clear message to companies that if they do not maintain adequate compliance programs, voluntarily self-disclose misconduct, and fully cooperate with the government, they will pay a price that outweighs the profits they once reaped.”
BBC also entered a civil settlement with the United States for $35.2 million, which will be credited against money owed under the criminal plea.
BBC engaged in falsifying documents between 2013 and 2019 in order to show performance objectives being completed, resulting in additional incentive fees being awarded, the release said. This included the maintenance of several military housing projects to resident satisfaction. The company in actuality did not meet the objectives during several review periods. Former Community Manager Stacy Cabrera and former Regional Manager Rick Cunefare pleaded guilty to related charges.
“The health and safety of service members and their families remains of critical importance to the DoD Office of Inspector General's Defense Criminal Investigative Service (DCIS),” Principal Deputy Director James R. Ives of DCIS said in the release. “DCIS and our law enforcement partners are committed to working with the Department of Justice to hold companies accountable when they emphasize profits over the well-being of those who honorably serve our nation.”
