Two ex-Balfour employees plead guilty to US fraud

11 June 2021 | Construction

Two former Balfour Beatty employees have pleaded guilty to “major fraud” against the United States, relating to falsified records of military housing maintenance, it has emerged.

The US Department of Justice announced this week that Rick Cunefare, 61, of Glendale, Arizona, and Stacy M Cabrera, 47, of Converse, Texas, pleaded guilty earlier this year over their roles in a conspiracy to manipulate and falsify maintenance-information reports. The reports were filed showing they had met maintenance objectives, which then triggered performance bonuses paid to their company.

The fraud took place at Lackland, Travis, Tinker and a number of other US Air Force bases between 2013 and 2016.

Reuters, which first broke the news of accusations against the UK contractor’s US subsidiary, Balfour Beatty Communities, in 2019, reported this week that the pair had worked for the company. Balfour Beatty has since confirmed this.

Cunefare faces a maximum penalty of 10 years in prison and a $250,000 (£176,619) fine. Cabrera faces a maximum penalty of five years in prison and a $250,000 fine, the Department of Justice said.

The department’s acting assistant attorney general, Nicholas L McQuaid, said: “The defendants defrauded the US Air Force and put corporate profits ahead of the wellbeing of service members and their families. The department is committed to protecting our military families from deceit and mistreatment, and ensuring the integrity of Department of Defense programmes.”

Investigations into the fraud remain ongoing.

In its UK accounts for 2020, released earlier this year, Balfour Beatty said a £5m drop in its operating profit for infrastructure investments was due to a provision made in relation to allegations relating to fraud on military housing in the US. The amount was said to reflect the value of the incentive fees received for work that its own internal investigation could not verify.

After the accusations first emerged in 2019, the contractor appointed a law firm to investigate. A spokesperson said today that it had proactively contacted the Department of Justice after concerns were raised. She added: “Balfour Beatty Communities is committed to conducting its business legally, decently, and honestly and is dismayed that the actions of certain individuals reflect poorly on the efforts of the hundreds of dedicated employees. The company is continuing to work with the Department of Justice to resolve the matter.”

This post has originally been featured in Construction News.