MED-EL Corporation has agreed to pay about $2.1 million to settle allegations that it falsely certified its eligibility for a Paycheck Protection Program (PPP) loan, according to an announcement from federal authorities in Boston.
The settlement agreement states that MED-EL Corporation admitted to applying for a second draw PPP loan on January 19, 2021. At the time of application, the company’s headcount, when combined with its foreign parent company, exceeded the Small Business Administration’s (SBA) cap of 300 employees.
The PPP was created under the Coronavirus Aid, Relief, and Economic Security Act (CARES Act), which was passed in March 2020 to help businesses affected by the COVID-19 pandemic. The CARES Act allowed small businesses to apply for forgivable loans if they met certain criteria related to employee numbers and business size. In May 2020, SBA guidance clarified that applicants must count all employees of both U.S. and foreign affiliates unless a waiver or exception applied. This rule would only be enforced prospectively for applications made on or after May 5, 2020. A second round of PPP loans became available on January 8, 2021.
“The settlement credits MED-EL Corporation for cooperation under the Department of Justice’s Guidelines for Taking Voluntary Disclosure, Cooperation and Remediation into Account in False Claims Act Matters.”
U.S. Attorney Leah B. Foley and Wendell Davis, General Counsel for the Small Businesses Administration announced the resolution. Assistant U.S. Attorney Charles B. Weinograd from the Affirmative Civil Enforcement Unit handled the case.
