Stax Inc., a consulting firm based in Boston, Massachusetts, has agreed to a settlement of $1 million with the U.S. government to resolve allegations of overbilling the U.S. Agency for International Development (USAID). The case involved inflated claims for salary reimbursement during the Sri Lanka@100 project, funded by the U.S. Government.
The matter was referred to the U.S. Attorney’s Office by the USAID Office of the Inspector General. Investigations revealed that Stax overcharged the agency over $850,000 by inflating employee salary costs, according to the terms of their cooperative agreement with USAID. It was found that hidden profits were included in the proposed salaries, which violated the agreement terms expressly prohibiting any profit accrual from the arrangement.
During the investigation, a different company acquired Stax and started cooperating with authorities. They took remedial measures, including firing the official responsible for the profit inclusion in salaries, revamping compliance procedures, and placing new compliance-experienced personnel in leadership roles. The company's cooperation led to a settlement for "1.2 times the single damages for a settlement total of $1 million."
This settlement resulted from collaboration between the U.S. Attorney’s Office for the District of Columbia and the USAID Office of the Inspector General. Assistant U.S. Attorney Darrell Valdez from the District of Columbia, alongside Special Agents Michael Pak and Kristopher Nordeen from USAID, conducted the investigation.
Stax Inc. agreed to the settlement without admitting to any facts or liabilities, resolving the claim disputes.