D.C. U.S. Attorney Ed Martin Claws Back $1 Million in USAID Overbilling Case

WASHINGTON - Stax Inc., a private consulting based in Boston, Massachusetts, has agreed to pay $1 million to resolve allegations it overbilled the U.S. Agency for International Development (USAID) in claims for salary reimbursement in the implementation of the U.S. Government funded Sri Lanka@100 project.

This matter came to the U.S. Attorney's Office from the USAID Office of the Inspector General which found that Stax overbilled USAID more than $850,000 by inflating its employee salary costs.

During an administrative audit, it was discovered that Stax put hidden profit in its proposed salary for its employees. This hidden profit violated the terms of the cooperative agreement entered into by USAID, and further was in direct contradiction to expressed statements to Stax informing them that they were not to get any profit from this cooperative agreement.

During the investigation, Stax was bought out by another company that immediately began to cooperate with the investigation and instituted remedial measures. The new company fired the official who directed that the profit be hidden in the salaries, revamped Stax's compliance procedures, and placed new personnel with extensive compliance experience into leadership positions. As a result of the earned cooperation credit, the parties agreed to settle for 1.2 times the single damages for a settlement total of $1 million.

The settlement was the result of a coordinated effort between the U.S. Attorney's Office for the District of Columbia and USAID Office of the Inspector General.

The matter was investigated by Assistant U.S. Attorney Darrell Valdez of the District of Columbia and Special Agents Michael Pak and Kristopher Nordeen of the USAID Office of the Inspector General.

The settlement agreement is not an admission of facts or liability by Stax Inc. but does resolve the disputed overbilling claims.