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 on January 19, 2021, MED-EL Corporation applied for a second draw PPP loan despite having a headcount—when combined with its foreign parent company—that exceeded the Small Business Administration’s (SBA) cap of 300 employees.
The PPP was established under the Coronavirus Aid, Relief, and Economic Security Act (CARES Act), which Congress passed on March 29, 2020. The program was designed to provide forgivable loans to small businesses for job retention and certain approved expenses during the COVID-19 pandemic. On May 5, 2020, the SBA issued guidance requiring applicants to count all employees of both U.S. and foreign affiliates when determining size eligibility unless an exception or waiver applied. This rule was enforced prospectively for applications submitted on or after May 5, 2020. A second round of PPP loans became available on January 8, 2021.
The settlement takes into account MED-EL Corporation’s cooperation with authorities under Department of Justice guidelines regarding voluntary disclosure and remediation in False Claims Act matters.
“U.S. Attorney Leah B. Foley and Wendell Davis, General Counsel for the Small Businesses Administration made the announcement today. Assistant U.S. Attorney Charles B. Weinograd of the Affirmative Civil Enforcement Unit handled the case.”
