Order — United States ex rel. Novik v. Cosmax Bti, Inc. (Dkt. 17, N.D. Ohio)

Summary

An order by United States District Judge Bridget Meehan Brennan in United States ex rel. Alexander Novik v. Cosmax BTI, Inc., et al., Case No. 1:22-CV-2171, in the U.S. District Court for the Northern District of Ohio, Eastern Division, filed May 27, 2025 as Doc #: 17. It recites that the United States intervened in part and settled with the relator and defendants, and sets out the covered conduct, including Nu-World's PPP loan application, which counted payments to staffing companies, its forgiveness application despite a warning that contractors could not be included, and Cosmax USA's second-draw loan and forgiveness applications. Under the settlement and the parties' joint stipulation, the covered claims are dismissed with prejudice, the remaining relator claims are dismissed with prejudice to the relator and without prejudice to the United States, and the case is closed.

Summary drafted by a model from the document's text below and checked by script against that text before publication. It is a navigation aid, not a reading of what the document proves. Where AI is used

Record facts

Full text

Case: 1:22-cv-02171-BMB Doc #: 17 Filed: 05/27/25 1 of 2. PageID #: 148




                             UNITED STATES DISTRICT COURT
                              NORTHERN DISTRICT OF OHIO
                                  EASTERN DIVISION

UNITED STATES OF AMERICA,                   )       CASE NO. 1:22-CV-2171
ex rel. ALEXANDER NOVIK,                    )
                                            )       JUDGE BRIDGET MEEHAN BRENNAN
              Plaintiff-Relator,            )
                                            )
       v.                                   )
                                            )
COSMAX BTI, INC., et al.,                   )       ORDER
                                            )
              Defendants.                   )

       WHEREAS the United States of America (the “United States”) has intervened in part in

this action with regard to certain of the allegations asserted against Defendants Cosmax USA,

Corporation d/b/a Nu-World and Nu-World Corporation (“Cosmax USA”) and Nu-World

Corporation (“Nu-World”) for the purpose of effectuating a Settlement Agreement between the

United States, the Relator, and Defendants; and

       WHEREAS the United States and the Relator have filed a joint stipulation of dismissal;

       IT IS HEREBY ORDERED as follows:

       1.     Consistent with the terms of the Settlement Agreement, the claims asserted by the

Relator on behalf of the United States against Defendants that are based on the Covered Conduct

as defined in Recitals, Paragraph C of the Settlement Agreement are dismissed with prejudice.

Recitals, Paragraph C of the Settlement Agreement specifically provides as follows:

              a.      On or about April 17, 2020, Nu-World submitted an application for a
                      federally guaranteed loan under the Payment Protection Act (“PPP”), 15
                      U.S.C. § 636(a)(36). That loan application impermissibly included a
                      requested loan amount that was calculated based, in part, on amounts Nu-
                      World paid to staffing companies for the services of individuals employed
                      by the staffing companies and not employed by Nu-World.

              b.      On or about July 29, 2021, Nu-World included an application for

     Case: 1:22-cv-02171-BMB Doc #: 17 Filed: 05/27/25 2 of 2. PageID #: 149




                      forgiveness of the entire amount of the PPP loan, even though it had
                      previously been warned by another financial institution that the loan and
                      forgiveness could not include contractors who were not themselves
                      employees of Nu-World. As a result, NuWorld knowingly submitted, or
                      caused the submission of, a false claim to the SBA for payment in
                      connection with its request for loan forgiveness. Based on the false loan
                      forgiveness application, SBA approved the loan forgiveness in full.

               c.     Cosmax USA submitted an application for a federally guaranteed PPP loan
                      on or about April 5, 2020. Subsequently, on or about March 22, 2021,
                      Cosmax USA submitted an application for a federally guaranteed “second-
                      draw” PPP loan. A second draw PPP loan was only available to companies
                      with 300 or fewer employees, including the employees of the applicant’s
                      affiliates. 15 U.S.C. § 636(a)(37)(A)(iv)(I)(aa). Cosmax USA was not
                      eligible for the second-draw loan. Cosmax USA and Nu-World were
                      affiliated by common ownership, and collectively the number of their
                      employees exceeded 300. Cosmax USA knew it exceeded the size threshold
                      but nonetheless certified that it met the requirements for the loan.

               d.     On or about December 24, 2021, Cosmax USA submitted an application for
                      forgiveness of its second-draw loan. Cosmax USA falsely stated on its
                      forgiveness application that it had 244 employees, when, in fact, the number
                      of its employees, combined with the number of Nu-World employees,
                      exceeded the 300-employee limit. As a result of the false statement, SBA
                      approved the forgiveness application. That conduct is referred to below as
                      the “Covered Conduct.”

       2.      The remaining claims asserted by the Relator in this action on behalf of the United

States are dismissed with prejudice to the Relator and without prejudice to the United States.

       3.      All claims asserted by the Relator regarding attorney’s fees, costs, and expenses

under 31 U.S.C. § 3730(d) are dismissed with prejudice.

       4.      The Court retains jurisdiction to enforce the Settlement Agreement.

       This matter is now CLOSED.

       IT IS SO ORDERED.



Date: May 27, 2025                                   _________________________________
                                                     BRIDGET MEEHAN BRENNAN
                                                     UNITED STATES DISTRICT JUDGE

File and source

File

17-order.pdf

Size

159,900 bytes

SHA-256

3024a73a80b4620d5a90a3ccd134364c6e59ff335143c5972ce1ce56d525bdc4

Our copy

17-order.pdf