Balfour Beatty US arm to pay £49m over military housing fraud

Aaron Morby 7 months ago
Share

Balfour Beatty’s US operation has been ordered to pay out £49m after pleading guilty to major fraud on its military housing maintenance contract.

The Balfour Beatty Communities pay-out is made up of £25m in fines and £24m in damages relating to its military housing contract 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.

As part of the settlement with the US Department for Justice, BBC pleaded guilty to one count of fraud and has agreed to the appointment of an independent compliance monitor for a three-year period, while it has also been placed on probation for three years.

According to court documents, from around 2013 to around 2019, Balfour Beatty Communities staff falsified performance information for incentive fee requests at various military housing projects.

Specifically, BBC staff altered or manipulated data in property management software and destroyed and falsified resident comment cards to falsely inflate performance to obtain pay performance incentive fees that BBC had not earned.

US Deputy Attorney General Lisa O. Monaco said: “Instead of promptly repairing housing for U.S. service members as required, BBC lied about the repairs to pocket millions of dollars in performance bonuses.”

“This pervasive fraud was a consequence of BBC’s broken corporate culture, which valued profit over the welfare of servicemembers.

“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.”

In a statement today Balfour said:  “Balfour Beatty is committed to the highest standards of ethical conduct. 

“The wrongdoing that took place is completely contrary to the way the company expects its people to behave.

“The company apologises for the actions of Communities to all its stakeholders. It has been made clear to all employees that breaches of policies, procedures, or law will not be tolerated.

“Communities welcomes the appointment of the independent compliance monitor and looks forward to a constructive engagement.”

In 2019, the Balfour Beatty undertook an in-depth review of operations at Communities and, as a result, introduced a series of changes to prevent misconduct from occurring in the future.

These involved the restructuring of the Communities management team including the additional appointment of several key executives and a Chief Compliance Officer for the US.  

It said: “Communities also has enhanced its ethics and compliance training for all employees and has made significant improvements to the maintenance work order processing system, underpinned by enhanced controls and protocols that are aimed to prevent misuse and strengthen oversight.”

Latest news

Leisure centre legal battle ends 15 years after handover

Allenbuild ordered to pay £2.2m to Sefton Council over defective swimming pool
23 hours ago

Morgan Sindall Highways chief departs

Paul Gott exits after 15 years at Morgan Sindall Infrastructure
2 hours ago

Balfour Beatty calls on supply chain to sign-up to Code of Ethics

Code of Ethics will eventually form part of Balfour Beatty contracts and supplier frameworks
2 hours ago

Tolent suffers £4.3m loss after High Street Group collapse hit

Gateshead builder says it returned to profit this year and is eyeing a £1bn work pipeline
1 hour ago

Persimmon build rates fall amid material and labour shortages

Planning delays also hit house builder as completions drop on last year
1 hour ago

Thirty construction workers killed on site last year

Industry fatality numbers drop 25% on previous year
12 hours ago

Construction and housing ministers resign

Industry leaders join mass exodus from government
16 hours ago

Aecom hires Arcadis veteran to grow northwards

Jonathan Moore aims to expand Aecom's business in the Midlands and North
15 hours ago

M&E contractor Kershaw went down owing subbies £10m

More than 400 firms left holding unpaid invoices
1 day ago

Green light for UK’s first plastic recycling park

£165m park in Cheshire will recycle 367,500 tonnes of plastic
1 day ago

Go-ahead for two Tilbury Douglas hospital jobs

Wirrall and Stockport hospital A&E jobs together worth nearly £60m
1 day ago

Eight contractors trailblaze concrete carbon reduction plan

Firms pledge to switch to 30% low emission concrete by 2025
2 days ago

Red Construction lands London Victoria office overhaul

St James's Park building will be extended up by two floors in overhaul
1 day ago

Six locations shortlisted for Great British Railways HQ

Site for national HQ narrows to Birmingham, Crewe, Derby, Doncaster, Newcastle and York
2 days ago

Kit maker Genie fined after M25 work platform death fall

Court hears how calibration error led to death of worker when 40 metre high mobile elevating work platform collapsed
2 days ago

O’Connor Utilities sold to private equity

OCU Group reported to have fetched around £400m
3 days ago

Rolls-Royce shortlists sites for first SMR factory

Three factories will make reactor, civils and MEP modules for SMR nuclear power stations
2 days ago

£233m loan kick starts £3.5bn regen of Royal Docks site

Infrastructure loan paves way for 6,000-home East London Silvertown scheme
2 days ago

Henry Construction wins £33m Oxford housing estate rebuild

Contractor signs off first deal with A2Dominion
2 days ago

Carillion collapse hospital hit by more construction delays

Balfour will take another 18 months to complete Midland Met scheme
3 days ago

Leeds college launches new construction and football course

Students can now combine site and tech skills with learning at a football academy
2 days ago

Willmott Dixon blasts new Building Safety law

Rick Willmott accuses Government of scapegoating construction over its own regulatory failure
3 days ago

£550m plan to redevelop The Galleries centre in Bristol

Shopping centre building to be demolished for major mixed-use scheme
3 days ago

Costain cancels supply chain event on £260m road job

Preparation work for A1 upgrade stalls as Transport Secretary dithers over approval
3 days ago

£170m London Holborn Circus office approved

Demolition work set to start in the autumn for 10-storey office block
3 days ago

City leaders launch net zero construction skills drive

City of London leader warns "skills gap and labour shortage are threats to our net zero ambitions"
3 days ago

Marlborough Highways lands £32m Islington civils deal

Contractor to help with north London borough's green drive
3 days ago

Osborne makes £45m construction loss

Sale of infrastructure business balances books as contractor looks for zero-carbon wins
6 days ago

John F Hunt forecasts record revenue and profits this year

Demolition contractor back on strong financial footing after previously setting aside £5.6m for bid rigging probe
6 days ago

Notting Hill Genesis names £2.8bn framework winners

26 firms land places on main contractor deal: Full list
6 days ago

Contractor services