Florida-based HX5 LLC, its owner and CEO Margarita Howard, and affiliate HX5 Sierra LLC in Ohio have consented to pay $7,759,693.92 to resolve allegations of violation of the False Claims Act. The U.S. Government accused the parties of intentionally providing false data to the Small Business Administration (SBA) regarding their eligibility for federal contracts for small businesses controlled by socially and economically disadvantaged individuals.<\/p>\n

The SBA\u2019s 8(a) business development initiative is intended to support small businesses owned by such disadvantaged individuals. Upon certification, these businesses become eligible for federal contracting preferences. The settlement announced today pertains to allegations that HX5, HX5 Sierra, and Howard dishonestly obtained six 8(a) contracts between January 1, 2015, and December 31, 2021.<\/p>\n

\u201cSmall business set-aside contracts assist small businesses, including socially disadvantaged companies, to compete in the American economy,\u201d stated Brian M. Boynton, Principal Deputy Assistant Attorney General, head of the Justice Department\u2019s Civil Division. \u201cWhen companies misrepresent their eligibility for such contracts, they prevent others from receiving the business opportunities Congress intended.\u201d<\/p>\n

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Specifically, it was alleged that HX5 and Howard neglected to report distributions and payments to Howard\u2019s family members, supposedly supplying SBA with false data concerning Howard\u2019s assets. The government further claimed that if the accurate data had been supplied, it would have resulted in HX5\u2019s exclusion from the SBA 8(a) Program, rendering HX5 Sierra ineligible for 8(a) contracts.<\/p>\n

\u201cThis result demonstrates a coordinated effort among our agency partners to ensure that disregard for the integrity of small business contracting will not go unchecked,\u201d said U.S. Attorney Jason R. Coody for the Northern District of Florida.<\/p>\n

\u201cToday\u2019s settlement sends a strong message that those responsible will be held accountable,\u201d added Special Agent in Charge Amaleka McCall-Brathwaite of the SBA\u2019s Office of Inspector General\u2019s Eastern Region.<\/p>\n

Due to the alleged fraudulent statements, HX5 unduly maintained its 8(a) Program participant status. Both HX5 and HX5 Sierra were awarded contracts by NASA, the U.S. Army, and the U.S. Air Force for which they were ineligible.<\/p>\n

The civil settlement also includes resolving claims raised under the qui tam or whistleblower provisions of the False Claims Act by Vantage Systems Inc. In this agreement, Vantage Systems is set to receive $1,357,964.00.<\/p>\n

Today\u2019s resolution sends a clear message to small businesses about the severe consequences of fraudulent claims. It reiterates the commitment of the government and law enforcement agencies to ensure transparency and fairness in allocating contracts and resources intended for small businesses.<\/p>\n

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Image: Justice.gov<\/small><\/em><\/p>\n

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