On June 30, the Department of Justice announced that two affiliated companies, HX5 LLC and HX5 Sierra LLC, agreed to pay $7.7 million to resolve allegations that they violated the False Claims Act (FCA). The government alleges that the two companies knowingly submitted false claims to the Small Business Administration (SBA) which allowed them to become eligible for set-aside contracts for small businesses from government agencies that include the National Aeronautics and Space Administration (NASA), the U.S. Army, and the U.S. Air Force.

In describing the nature of the alleged fraud, Principal Deputy Assistant Attorney General Brian M. Boynton explained that “small business set-aside contracts assist small businesses, including socially disadvantaged companies, to compete in the American economy.” Boynton pointed out that “when companies misrepresent their eligibility for such contracts, they prevent others from receiving the business opportunities Congress intended.”

Amaleka McCall-Brathwaite, Special Agent in Charge of the SBA’s Office of Inspector General’s Eastern Region, emphasized their office’s interest in detecting this kind of alleged fraud: “Individuals that provided fraudulent information to gain access to SBA funds intended to support eligible small businesses will face justice.” McCall-Brathwaite added that “Today’s settlement sends a strong message that those responsible will be held accountable. I want to thank the U.S. Department of Justice and our law...

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