Cosmax USA False Claims Act settlement

Case summary

Cosmax USA, which previously did business as two separate entities, Cosmax USA and Nu-World Corporation, operated a manufacturing facility in Solon, Ohio, until 2023; the companies are part of a global conglomerate that supplies cosmetics and nutritional supplements. In May 2025 Cosmax USA agreed to pay $6 million, of which $3 million is restitution, to resolve False Claims Act allegations that the companies knowingly provided false information to obtain PPP loans and loan forgiveness. The claims are allegations only, and there has been no determination of liability.¹

The first allegation concerned Nu-World's April 2020 application for a First-Draw PPP loan and its 2021 application for forgiveness of that loan. The government alleged that the loan amount was calculated partly on payments to temporary employees who were not Nu-World's employees.¹

The second concerned Cosmax USA's Second-Draw PPP application, in which it certified that it was a small business with fewer than 300 employees, including employees at affiliated companies. The government alleged Cosmax USA's employee count, combined with Nu-World's, exceeded that 300-employee ceiling.¹

The settlement resolves a whistleblower lawsuit under the False Claims Act filed by Alexander Novik, a former employee who served as Cosmax USA's controller and also in its human resources department.¹

Nu-World was merged into Cosmax USA in 2023. The resolution was the result of a coordinated effort by the Justice Department Civil Division's Commercial Litigation Branch, Fraud Section, and the U.S. Attorney's Office for the Northern District of Ohio. The SBA's Office of General Counsel and Office of Inspector General assisted.¹

Notes

1. U.S. Attorney's Office for the Northern District of Ohio, "Former Solon-based Manufacturer to Pay $6M to Resolve False Claims Act Allegations Relating to Paycheck Protection Program" (original), May 22, 2025. ↩₁ ↩₂ ↩₃ ↩₄ ↩₅

Summary written from the documents on this page; every sentence is sourced.