Military housing contractor pleads guilty to defrauding United States armed forces

Tinker Air Force Base

OKLAHOMA CITY (KFOR) – Following allegations of deplorable conditions at bases across the country, including one in Oklahoma, the housing provider has pleaded guilty to a scheme to defraud the U.S. military.

In 2019, KFOR reported on multiple instances of residents at Tinker Air Force Base dealing with housing issues.

Oklahoma Sen. Jim Inhofe began looking into Balfour Beatty Communities, a private contractor and management company that built and operates the military housing.

“Quite frankly I thought this was a problem that was unique to Tinker. I didn’t know, and I chair the committee. So we had a hearing and we talked about it, then I concluded that, no, this something that is all over Oklahoma. Then we find out its all over America,” Inhofe said.

Asbestos, mold, and firewall issues were some of the concerns from residents.

On Wednesday, the Department of Justice announced a global resolution of its criminal and civil investigations into Balfour Beatty Communities.

The company pleaded guilty to one count of major fraud against the United States in connection with the criminal information.

BBC was ordered 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.

Also, the company entered into a False Claims Act settlement with the United States to resolve its civil liability for $35.2 million.

“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. 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 operated privatized military housing communities at 21 U.S. Air Force, 18 U.S. Navy, and 16 U.S. Army bases across the country.

BBC’s fees for the property management and maintenance of its military housing communities generally consisted of a base fee and performance incentive fees. To obtain the incentive fees, BBC was required to submit to the service branches proof that it had satisfied performance objectives related to, among other things, maintenance of the housing communities and resident satisfaction. The service branches relied on BBC’s submissions in deciding whether to approve the payment of relevant performance incentive fees.

According to court documents, from around 2013 to around 2019, BBC employees falsified information so that BBC’s incentive fee requests falsely reflected that BBC had met performance objectives. In reality, BBC did not meet those objectives in many of the quarters during that time. Specifically, officials say BBC employees altered or manipulated data in property management software and destroyed and falsified resident comment cards to falsely inflate these metrics and, ultimately, to fraudulently induce the service branches to pay performance incentive fees which BBC had not earned.

Court documents allege there were lengthy and unnecessary delays in repairs and maintenance issues.

“In defrauding our country’s military services, BBC took advantage of their unique position as a military housing provider and put greed and personal profit above our servicemembers,” said FBI Deputy Director Paul M. Abbate. “Today’s guilty plea reaffirms the FBI, along with our partners, are committed to preventing such disgraceful crimes and will work tirelessly to bring those who engage in this type of crime to justice.”

“The defendants’ greed undermined a program designed to protect servicemembers’ homes while they courageously fight to protect our homeland,” said Acting U.S. Attorney Robert J. Troester for the Western District of Oklahoma. “Servicemembers and their families deserve better. The U.S. Attorney’s Office is committed to working with our law enforcement partners to protect our military community from fraudulent conduct of all kinds, particularly the integrity of DoD housing programs.”

Copyright 2022 Nexstar Media Inc. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed.

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