Balfour Beatty Communities, LLC has entered a guilty plea to defrauding the U.S. Army, U.S. Navy and U.S. Air Force.
Based in Malvern, Penn., the company is one of the largest providers of privatized military housing to the U.S. Armed Forces. The company entered the plea Dec. 20 before U.S. District Judge Emmet Sullivan in the District of Columbia.
As part of the plea, the company agreed to pay $33.6 million in criminal fines and $31.8 million in restitution to the U.S. military. The company will also serve three years of probation and use an independent compliance monitor for a period of three years.
According to court documents, from around 2013 through around 2019, the company did not meet certain performance objectives, primarily related to maintenance and customer satisfaction at various military housing projects.
Two employees, Stacy Cabrera and Rick Cunefare, falsified information that the company had met the objectives and was eligible for Performance Incentive Fees. Court papers said the three branches of the military sustained a loss of approximately $18.7 million as the result of the scheme.
“Instead of promptly repairing housing for U.S. servicemembers as required, BBC 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 BBC’s broken corporate culture, which valued profit over the welfare of servicemembers.”
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Cabrera pled guilty in April 2021 to conspiracy to commit wire fraud. Cunefare pled guilty in June 2021 to major fraud against the United States. Both individuals are awaiting sentencing.
In a separate action, Balfour Beatty Communities entered into a false claims settlement and will pay about $35.2 million in civil restitution and penalties. Law enforcement in the Southern District of Georgia assisted in the settlement by investigating the company’s conduct at Fort Gordon in Augusta and Fort Stewart/Hunter Army Airfield in Savannah.
“The men and women who live in our nation’s military housing, including those at Fort Stewart and Fort Gordon, deserve prompt and professional maintenance service from their housing providers,” said David H. Estes, U.S. Attorney for the Southern District of Georgia. “That BBC would not only fail to deliver this service, but also falsify information to line their own pockets is despicable.”
Reports concerning the condition of on-post housing at Fort Gordon prompted U.S. Senator Jon Ossoff (D-Ga.) to visit the post twice, including on July 16, 2021.
MORE: Improving Housing for Military Families at Fort Gordon
The senator released a statement after learning of the guilty plea.
“Balfour’s guilty plea is progress toward accountability for the mistreatment of families housed at Fort Gordon, but there is more work to be done. As I pledged this summer, I will continue pursuing every avenue available to ensure accountability where our military families have been subjected to unsafe, unhealthy low-quality housing. Our heroes and their families deserve the best,” said Ossoff.
According to court documents, the company operated privatized military housing communities at 21 U.S. Air Force, 16 U.S. Army and 18 U.S. Navy bases across the United States. Tens of thousands of servicemembers and their families paid their living allowances, known as Basic Allowance for Housing, in rent to Balfour Beatty Communities.
The company has not responded to requests for comment on the guilty plea, whether repairs not made from 2013 through 2019 have been made, or its plans to address complaints from military families in the future.
Dana Lynn McIntyre is a Staff Reporter with The Augusta Press. You can reach her at dana@theaugustapress.com
