US military's largest landlord pleads guilty to fraud - Justice Department

The US Military landlord, Balfour Beatty Communities, pleads guilty and is sentenced to pay over $65 million for defrauding the US Air Force, Army and Navy.

 Balfour Beatty Communities President Christopher Williams testifies before Senate Armed Services subcommittees on the Military Housing Privatization Initiative in Washington, U.S. February 13, 2019. (photo credit: ERIN SCOTT/REUTERS)
Balfour Beatty Communities President Christopher Williams testifies before Senate Armed Services subcommittees on the Military Housing Privatization Initiative in Washington, U.S. February 13, 2019.
(photo credit: ERIN SCOTT/REUTERS)

The US Justice Department said it resolved probes into Balfour Beatty Communities, one of the US military's largest private landlords after it pleaded guilty on Wednesday to one count of major fraud and agreed to pay over $65 million in fines and restitution.

Balfour Beatty was being investigated for defrauding the US Air Force, Army and Navy. A company spokesperson said on Thursday: “We have taken full responsibility and apologize to all our stakeholders.”

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 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.

 Homes that were constructed by Balfour Beatty are seen in a neighborhood at Tinker Air Force Base, Oklahoma, US May 1, 2019. Picture taken May 1, 2019.  (credit: REUTERS/NICK OXFORD/FILE PHOTO) Homes that were constructed by Balfour Beatty are seen in a neighborhood at Tinker Air Force Base, Oklahoma, US May 1, 2019. Picture taken May 1, 2019. (credit: REUTERS/NICK OXFORD/FILE PHOTO)

US District Judge Emmet Sullivan accepted the company's guilty plea on Wednesday and sentenced it to pay over $65 million, serve three years of probation, and engage an independent compliance monitor for a period of 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."

Stacy Cabrera, a former housing manager at Texas’s Lackland Air Force Base who told Reuters she felt pressure to manipulate records to meet the bonus goals, pleaded guilty to 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 to major fraud.