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Military housing provider at Ellsworth Air Force Base pleads guilty to fraud

WASHINGTON — One of the privatized military housing providers at Ellsworth Air Force Base has pleaded guilty for defrauding the U.S. Air Force, U.S. Army and U.S. Navy.

The Justice Department announced a global resolution on Wednesday of its criminal and civil investigations into Balfour Beatty Communities LLC, which is one of the largest providers of privatized military housing to the U.S. Armed Forces.

Balfour Beatty Communities earned fees for various phases of development and management of each housing community, from design and construction to ongoing community management and maintenance, and service members paid their living allowance to live in these communities. However, according to court documents from 2013 to 2019, Balfour Beatty Communities employees falsified information so that incentive fee requests falsely reflected that BBC had met performance objectives when they had not.

The employees altered or manipulated data in property management software and destroyed and falsified resident comment cards to falsely inflate metrics and to fraudulently induce the service branches to pay performance incentive fees which Balfour Beatty Communities had not earned.

“Instead of promptly repairing housing for U.S. servicemembers as required, Balfour Beatty Communities lied about the repairs to pocket millions of dollars in performance bonuses,” said Deputy Attorney General Lisa O. Monaco. “This pervasive fraud was a consequence of Balfour Beatty Communities’ 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.”

U.S. District Judge Emmet G. Sullivan accepted the plea and sentenced Balfour Beatty Communities to pay over $33.6 million in criminal fines and over $31.8 million in restitution to the U.S. military. They will also serve three years of probation.

As part of the plea agreement, Balfour Beatty Communities agreed to cooperate fully with the United States in all matters relating to the conduct covered by the plea agreement.

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