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Catch of the Week: Privatized Military Housing Contractor Pays Over $65 Million to Resolve Criminal and False Claims Act Allegations

Posted  December 23, 2021

Government contractors are held to high standards in the performance of their contracts or services because of the direct impact to government services and taxpayer dollars at stake. Often fraud related to government contractors can negatively impact U.S. servicemembers or public servants who diligently serve our country.

This week we focus on the over $65 million judgment and settlement reached between the Department of Justice and Balfour Beatty Communities LLC (“BBC”) relating to a scheme to defraud the U.S. military in providing housing maintenance services. The settlement includes over $33.6 million in criminal fines, $31.8 million in restitution and a separate $35.2 million False Claims Act settlement that is credited to the overall criminal settlement.

The Fraud Scheme

BBC operated privatized military housing on over forty-five military bases covering the Air Force, Navy, and Army. The scheme centered on BBC falsifying submissions on performance to qualify for performance incentive payments between 2013 and 2019. In many instances BBC either failed to perform maintenance on the private housing or lied about performing maintenance to claim performance incentive payments. The government relied on BBC’s honesty in its submission to approve the performance incentive payments. BBC falsified or manipulated data in property management software and destroyed or falsified resident comment cards to create a false illusion that BBC was performing well and meeting metrics to qualify for performance bonuses.

The Settlement with BBC

BBC pled guilty to one count of major fraud against the United States. The plea was accepted, and BBC was ordered to pay over $65 million in fines and restitution. Separate to the plea and judgment, BBC also settled a civil False Claims Act case for $35.2 million. The U.S. Attorney for the Southern District of Georgia David H. Estes commented, “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. That BBC would not only fail to deliver this service, but also falsify information to line their own pockets is despicable. Our office will work tirelessly with our law enforcement partners, and other components of the Department of Justice, to make sure those who provide subpar service to the military and lie about it are held accountable.”

This judgment and settlement demonstrate the obligation government contractors have to maintain high standards of conduct to protect our servicemembers and our taxpayers. It is incumbent on companies to provide proper service to the government and the servicemembers who valiantly serve our country every day. While no known whistleblower was involved here, the global resolution also emphasizes the continued need for whistleblowers to hold their employers accountable by coming forward with information about fraud schemes relating to government contracts and services.

If you have information or would like to speak to a member of the Constantine Cannon whistleblower lawyer team, please contact us for a confidential consultation.

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Tagged in: Catch of the Week, Contract Non-Compliance, Criminal Proceedings, Defense Contract Fraud, FCA Federal, Government Procurement Fraud,