Balfour Beatty’s US arm Communities to pay £49m after pleading guilty to fraud

Balfour Beatty’s US arm that provides privatised military housing to America’s armed forces has agreed to pay £49 million in fines and damages after pleading guilty to fraud.

Balfour Beatty Communities reached a resolution with the US Department of Justice following criminal and civil investigations into performance incentive fees improperly claimed between 2013 and 2019.

Communities pleaded guilty to one count of fraud and has agreed to the appointment of an independent compliance monitor for a three-year period, while it has also been placed on probation for three years.

The fraud related to maintenance work at certain US military housing installations.

Communities will pay 65.4 million US dollars (£49 million) in total, comprising around 33.6 million US dollars (£25.1 million) in penalties and 31.8 million US dollars (£23.8 million) in restitution.

London-listed group Balfour said: “The wrongdoing that took place is completely contrary to the way the company expects its people to behave.

“The company apologises 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.”

Balfour said it had reviewed its operations since the fraud came to light in 2019 and has overhauled the management team at Communities, appointed several key executives and a chief compliance officer for the US business.