Stax Inc., a consulting firm located in Boston, Massachusetts, has agreed to a settlement of $1 million over allegations of overbilling the U.S. Agency for International Development (USAID). The case involves claims for inflated salary reimbursements connected to the U.S. Government-funded Sri Lanka@100 project.
Originating from a USAID Office of the Inspector General investigation, the case revealed that Stax overbilled USAID by more than $850,000. It was found that the company inflated its employee salary claims by embedding hidden profit, in violation of the terms of their cooperative agreement with USAID. The firm's actions contradicted previous instructions explicitly disallowing profit from the agreement.
Amidst the investigation, a new company acquired Stax and chose to cooperate fully with the authorities. They took several corrective steps, including firing the official responsible for the hidden profit strategy, overhauling compliance procedures, and placing compliance-savvy personnel in key leadership roles. This cooperation resulted in an agreed settlement of $1 million, amounting to 1.2 times the actual damages.
The settlement is the product of collaborative efforts between the U.S. Attorney’s Office for the District of Columbia and the USAID Office of the Inspector General. The investigation team included Assistant U.S. Attorney Darrell Valdez and Special Agents Michael Pak and Kristopher Nordeen from the Inspector General's office.
The agreement explicitly states that Stax Inc. does not admit to any facts or liability related to the overbilling charges, but it provides a resolution to the allegations.
