Rebecca C. Lutzko United States Attorney for the Northern District of Ohio | U.S. Attorney for the Northern District of Ohio
The Justice Department has announced a settlement with Cosmax USA, a company formerly operating as Cosmax USA and Nu-World Corporation. The corporation will pay $6 million, including $3 million in restitution, to resolve allegations under the False Claims Act (FCA) that it provided false information to obtain Paycheck Protection Program (PPP) loans and loan forgiveness. These companies are part of a global conglomerate supplying cosmetics and nutritional supplements. In 2023, Nu-World was merged into Cosmax USA.
Cosmax USA operated a manufacturing facility in Solon, Ohio until 2023. The settlement resolves a lawsuit filed by Alexander Novik, a former employee who worked at that location. Under the FCA's whistleblower provisions, individuals may file suits on behalf of the United States for false claims and share in the government’s recovery.
The PPP was initiated by the Small Business Administration (SBA) through the CARES Act in 2020 to support businesses during the COVID-19 pandemic. This resolution addresses two alleged violations where Cosmax USA and Nu-World reportedly submitted false information to qualify for PPP funds.
First, allegations state that Nu-World applied for a First-Draw PPP loan in April 2020 and sought forgiveness in 2021 based on payments to temporary employees not employed by Nu-World.
Second, allegations assert that Cosmax USA falsely certified itself as a small business with fewer than 300 employees when applying for its Second-Draw PPP loan. Combined with its affiliate Nu-World’s staff, their total exceeded the program's employee limit.
This resolution resulted from coordinated efforts between various branches of the Civil Division and U.S. Attorney’s Office for Northern District of Ohio, along with assistance from SBA offices.
Trial Attorney Graham D. Welch and Assistant U.S. Attorney J. Jackson Froliklong managed this matter with help from Thomas W. Rigby and Arlene P. Messinger Lerner of the SBA.
Reports of CARES Act fraud can be submitted via the Justice Department’s National Center for Disaster Fraud Hotline or online.
It is noted that these resolved claims are allegations only without any determination of liability.
