MED-EL Corporation Agrees to Pay $2.1 Million to Resolve Allegations of PPP Loan Fraud

Summary

A press release datelined Boston and published September 5, 2025, from USAO - Massachusetts, announces that MED-EL Corporation has agreed to pay approximately $2.1 million to resolve False Claims Act allegations of falsely certifying eligibility for a Paycheck Protection Program (PPP) loan. The release states that, as detailed in the settlement agreement, MED-EL Corporation admits that on Jan. 19, 2021 it applied for a second draw PPP loan when headcount, together with a foreign parent company, exceeded the SBA's 300 employee cap. It says the settlement credits MED-EL Corporation for cooperation. U.S. Attorney Leah B. Foley and Wendell Davis, General Counsel for the Small Businesses Administration, made the announcement.

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BOSTON – MED-EL Corporation has agreed to pay approximately $2.1 million to resolve False Claims Act allegations that the company falsely certified to the United States Small Business Administration (SBA) its eligibility for a Paycheck Protection Program (PPP) loan.
As detailed in
the settlement agreement
, MED-EL Corporation admits that, on Jan. 19, 2021, it applied for a second draw PPP loan. When it did, its headcount, together with its foreign parent company, exceeded SBA’s 300 employee cap.
Congress enacted the Coronavirus Aid, Relief, and the Economic Security Act (CARES Act) on March 29, 2020, to provide emergency financial assistance to the millions of Americans who were suffering the economic effects of the COVID-19 pandemic. The CARES Act authorized forgivable loans to small businesses for job retention and certain approved expenses through the PPP. On May 5, 2020, the SBA issued guidance that explained that, for purposes of meeting size eligibility requirements (i.e. whether the applicant is a “small business concern” or otherwise falls below the cap on employee headcount) an applicant must count all of its employees and the employees of its U.S. and foreign affiliates, absent a waiver of or an exception to the affiliation rules. SBA’s guidance also made clear that it would only enforce this rule prospectively, i.e., for applications made on or after May 5, 2020. On Jan. 8, 2021, SBA announced the availability of a second round of PPP loans, known as the “second draw” PPP loans.
The settlement credits MED-EL Corporation for cooperation under the Department of Justice’s Guidelines for Taking Voluntary Disclosure, Cooperation and Remediation into Account 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.

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