Military housing company admits to fraud at Fort Stewart

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FORT STEWART, GA (WSAV) – A multi-million dollar admission of guilt from a military housing contractor accused of fraud, putting soldiers and their family’s health at risk.

One of the bases included in the criminal case, Fort Stewart.

Balfour Beatty Communities LLC pleaded guilty and was ordered to pay $33.6 million in criminal fines and nearly $32 million in restitution.

The company will also be on probation for three years, during which it will be closely monitored for compliance.

The US Attorney’s Office of the Southern District and the Justice Department says Balfour Beatty engaged in a scheme to alter maintenance records so it looked like the company was meeting goals required for its financial incentive bonuses from its properties on 55 different Army, Navy, and Air Force bases around the United States.

“Instead of promptly repairing housing for U.S. service members as required, BBC lied about the repairs to pocket millions of dollars in performance bonuses,” Deputy Attorney General Lisa O. Monaco said in a statement. “This pervasive fraud was a consequence of BBC’s broken corporate culture, which valued profit over the welfare of servicemembers.

“They were incentivized to manipulate those metrics,” explained Sarah Lynne Kline, Vice-President in charge of Environmental Hazards for Armed Forces Housing Advocates.

The company would get a bonus if it fixed any issues with military homes quickly and dealt with any work orders quickly.

But the court documents show that the company had no plans to fix anything. Ignoring any work order, or worse.

“They either tore them up or put them on a list that wasn’t in the Yardi system (which documented all the work orders and repairs),” said Kline. “Or they changed the dates. and the times. We have actually, our organization has uncovered work order times that were actually before the call in time.”

“It (the orders) came down from the former Chief Operating Officer of Balfour Beatty to a Senior Executive Vice President, all the way down to the individuals that put in the work orders for the installations.”

Kline traveled to many if the bases where housing was run by Balfour Beatty, including Fort Stewart.

She says after the 2019 Congressional hearings on the issue and a Reuters series about the problems, many companies who dealt with military housing took the issue to heart and worked to fix it, but not Beatty.

“What I saw when I arrived on Fort Stewart in November of 2019 was a lot of paint,” explained Kline. “They had done work, on the exteriors. You could literally drive through the neighborhood and see the mold growing through the homes. And I actively witnessed them painting over that mold.”

And Kline says other bases were even worse.

“We are talking squirrels in walls, raccoons on roofs and in attics, roaches crawling over babies.”

She used words like asbestos and radon, mold, and lead paint. All of which could cause short-term and long-term health issues.

“I know families that live in Balfour Beatty housing that have their babies become completely sick, had to move out of their homes. they lost all their household goods. and now they have a fine that is going to end up being deposited in the US treasury. “

Some military families are suing the company for damages. But Kline estimates it is only around 15. Far less than the number of people actually affected.

“People were afraid of reprisal and retaliation,” explained Kline. “and they didn’t want to say anything but put their work orders in and hope for the best. Then those work orders got deleted out of the system.”

Kline believes lawyers are also hesitant to take on these cases and fight the large companies with big legal teams, with a fee from military families without a lot of money that would be contingent on winning the case.

While the monitoring is a step in the right direction, Kline says the settlement doesn’t do anything for these families who need a safe and healthy place to live.

“They are put on a probationary term and they have a monitor attached and they are supposed to meet with that monitor and have these meetings every four to six months. It doesn’t necessarily change anything.”

“It is a drop in the bucket,” continued Kline. “This is two years’ worth of profits for Balfour Beatty Communities. It is a complete slap on the wrist. No one is facing jail time. all those criminal charges have completely gone away. “

The question is, what should military families do now if they live on base and still see and deal with problems?

“The first step is actually to contact the housing company. Make sure your work order is put in make sure you have proof that work order is put in. Go to the Garrison housing office, the DPW housing office, and make sure you have a worker there that is following your case as well.”

Kline says if you are still having issues, you can contact Armed Forces Housing Advocates for help https://www.afhousingadvocates.org

Or reach out to your Congressional representative to try and get changes made.

The decision is being called a “global resolution” of the Justice Department’s criminal and civil investigations into the company.

“The 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,” Monaco said.

While Balfour Beatty is “on probation” they are still under a 50-year contract with the government to continue overseeing military housing. Some families wonder why that contract wasn’t taken away.

Kline says there are 13 other private housing companies used on military bases. While not criminal like Balfour Beatty, her agency has “not seen good behavior out of any of them.”

In a Statement, Balfour Beatty wrote:

Balfour Beatty is committed to the highest standards of ethical conduct. The wrongdoing that took place is completely contrary to the way the Company expects its people to behave. The Company apologizes for the actions of Communities to all its stakeholders. It has been made clear to all employees that breaches of policies, procedures, or law will not be tolerated. Communities welcomes the appointment of the independent compliance monitor and look forward to a constructive engagement.

In 2019, the Company undertook an in-depth review of operations at Communities and, as a result, a series of changes have been made to prevent this type of misconduct from occurring in the future. These involved the restructuring of the Communities management team including the additional appointment of several key executives and a Chief Compliance Officer for the U.S. In addition, Communities has enhanced its ethics and compliance training for all employees and has made significant improvements to the maintenance work order processing system, underpinned by enhanced controls and protocols that are aimed to prevent misuse and strengthen oversight.

Communities is committed to delivering a consistently high level of service to the military residents it serves and will continue to work closely and constructively with its military partners to achieve this.

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