Property development and construction firm Lend Lease has declared that the fraudulent practices which prompted a three-year investigation into its operations in New York no longer take place.
According to a report on Australian Associated Press (AAP), the company says that since allegations of the practices surfaced, it has implemented more rigorous control processes and replaced most of its senior management team both locally in New York and nationally in the US.
“The investigated activities relate to past billing practices and the use of minority business enterprises and conduct which no longer occur,” the company said in a statement on Wednesday. “Lend Lease has put in place more rigorous processes and an enhanced compliance regime in the US.”
According to the AAP report, the US Attorney’s Office for the Eastern District of New York has just finished a three-year investigation into alleged fraudulent practices of Bovis Lend Lease – now called Lend Lease (US) Construction.
Allegations centred specifically around claims of fraudulent billings and of misrepresentations by the company about the extent of work on its projects completed by ‘minority’ business enterprises.
It was alleged that Bovis fraudulently over-billed clients on projects for hours which were not actually worked over at least a 10-year period from at least 1999-2009.
It was further alleged that the company misrepresented the amount of work it awarded on its projects to companies owned by women or minorities to public sector clients. This was done in order to fraudulently obtain payments on lucrative government contracts for participation in affirmative action programs designed to increase participation of small construction firms or firms owned by women or minorities on large-scale development projects.
Following the investigation, the report says Bovis has admitted to over-billing clients for longer than 10 years and that the company has entered into a deferred prosecution agreement with the US Attorney’s Office.
The report also says Bovis has admitted to defrauding two of its public sector clients by misrepresenting the amount of work performed by minority business enterprise partners on its developments.
The deferred prosecution agreement requires the company to pay up to $56 million in penalties to the US government and restitution to victims, and to institute corporate reforms to avoid future problems.