Leah B. Foley United States Attorney for the District of Massachusetts | Department of Justice
MED-EL Corporation has agreed to pay about $2.1 million to resolve allegations that it falsely certified its eligibility for a Paycheck Protection Program (PPP) loan, according to an announcement from federal authorities.
The settlement agreement states that MED-EL Corporation applied for a second draw PPP loan on January 19, 2021. At the time of application, the company’s headcount—including employees of its foreign parent company—exceeded the Small Business Administration’s (SBA) cap of 300 employees.
The PPP was established as part of the Coronavirus Aid, Relief, and Economic Security Act (CARES Act), passed on March 29, 2020. The program was designed to provide forgivable loans to small businesses for job retention and other approved expenses during the COVID-19 pandemic. On May 5, 2020, SBA guidance clarified that applicants must include all employees from U.S. and foreign affiliates when determining eligibility unless a waiver or exception applies. This rule was enforced only for applications made after May 5, 2020. A second round of PPP loans became available starting January 8, 2021.
The Department of Justice credited MED-EL Corporation for cooperating with authorities under federal guidelines related to voluntary disclosure and remediation in False Claims Act cases.
"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."
