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US Balfour Beatty to pay $ 65.4m after pleading guilty to fraud

An agent for the UK’s largest construction company Balfour Beatty has fined $ 65.4m in restitution after pleading guilty to fraud in the US Department of Justice’s investigation.

The DoJ investigated the funding for the operations that Balfour Beatty Communities reported between 2013 and 2019 following the US military rehabilitation program.

The company has pleaded guilty to one count of felony criminal mischief and consented to a three-year independent contractor, Balfour Beatty said in a statement on Thursday.

“The offenses were completely contrary to the company’s expectations of the people,” the construction team added. “The company apologizes for the actions of Communities to all those involved.”

The DoJ reported that the Balfour Beatty Communities operated secret troops in airports, navy and military bases in the US, and paid for various stages of development and management of each building. Employees pay the company’s subsidies.

In order to earn “incentive payments”, the company had to provide evidence that it had met the operational objectives related to housing renovation and public satisfaction.

However, the DoJ said Balfour Beatty Communities lied a lot saying it had achieved its goals.

“Employees altered or tampered with data in the asset management program and destroyed and switched residents’ comment cards to fraudulently increase metrics, and ultimately, fraudulently sued service departments to pay interest that Balfour Beatty Communities did not receive,” DoJ said.

“Instead of quickly rehabilitating US workers’ homes as they want, Balfour Beatty Communities lied about the multi-million dollar renovation in labor bonuses,” said Deputy Attorney General Lisa O. Monaco.

“This widespread hypocrisy was a result of [the company’s] violating corporate culture, which required more profit than the way they operate, ”he said.

“The current global decision sends a clear message to companies that if they do not adhere to compliance, voluntary disclosure, and full cooperation with the government, they will have to pay more than the initial profit.”

Balfour Beatty shares rose 2 percent to 261.43p on Thursday, mostly unaffected by the ruling.

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