Novum settles PPP affiliate-size allegations
Oct 4, 2026 edition · GC-2026-0044 · Published 2026-10-04 · Version 2 · Settled
Novum agreed to a $3,345,000 settlement over a $2 million Second Draw PPP loan allegedly obtained despite excessive affiliate headcount.
What happened
DOJ announced September 1, 2026 that Novum Pharmaceutical Research Services of Delaware, Inc. agreed to pay $3,345,000 to resolve False Claims Act allegations concerning a $2 million Second Draw Paycheck Protection Program loan. Novum received the loan and full forgiveness, but the government alleged that it was ineligible under the program's employee-based size standard. The settlement also resolves whistleblower claims. DOJ states that the resolved claims remain allegations, with no determination of liability; the announcement does not independently prove that the settlement payment was completed.
For the Second Draw program described in the release, eligibility required no more than 300 employees including domestic and foreign affiliates. Novum certified that it and its affiliates had fewer than 300, while DOJ says their combined workforce exceeded 300, including employees of its India-based ultimate parent, Lambda Therapeutic Research. The distinction is the applicant's consolidated eligibility calculation, rather than simply its own payroll. Although Novum is a research business, the case concerns SBA relief lending and forgiveness certifications, not reimbursement for healthcare services or a new Medicaid eligibility rule.
Scope and timing
- Authority status
- Settled
- Applicability
- Operationally relevant
- Audience
- Health systems, Provider networks
- Jurisdiction
- Federal
Why it matters
Relief-program certifications require the affiliate calculation specified by that program, including relevant foreign affiliates.
Recommended action
Retain contemporaneous affiliate and workforce calculations supporting application and forgiveness certifications, and investigate unresolved discrepancies with finance and counsel.
Case details
- agencies
- DOJ
- entities
- Novum Pharmaceutical Research Services of Delaware, Inc.
- action Type
- Settlement
- event Date
- 2026-09-01
- alleged Conduct
- Second Draw eligibility and forgiveness were allegedly obtained despite aggregate affiliate headcount exceeding the program threshold.
- resolution
- Agreement to pay $3,345,000 resolving allegations involving a $2 million Second Draw PPP loan and forgiveness; no determination of liability.
Operational lessons
- Include relevant domestic and foreign affiliates in eligibility analysis.
- Retain evidence supporting application and forgiveness certifications.
Sources
- Novum settles PPP affiliate-size allegationsOfficial · DOJ, District of Delaware · 2026-09-01 · Source review 2026-09-06
Complete edition and supplemental material
This finding in the complete approved report →Regulatory horizons, CIA trends and implementation trackers remain in the full report.
Read the entire Enforcement Briefing report →