GA Medical Company Accused Of Overcharging Receives Federal Loan

MARIETTA, GA — A Marietta-based biopharmaceutical company is reported to have received $10 million from the federal government's Paycheck Protection Program. According to reports, the company received the $10 million just two weeks after paying $6.5 million to resolve claims it had knowingly overcharged for medical supplies.

A Justice Department investigation accused MiMedx Group, which makes and sells human-tissue grafts, of violating federal law by knowingly overcharging the Department of Veterans Affairs for the supplies, according to The New York Times.

On April 6, MiMedx Group agreed to pay $6.5 million. Then on April 21, the company received
a $10 million loan from the Paycheck Protection Program. The government essentially paid back the $6.5 million and some, according to the Times report.

The Paycheck Protection Program is a loan designed to provide a direct incentive for small businesses to keep their workers on the payroll. The program provides low-interest loans, which will be forgiven loans if all employees are kept on the payroll for eight weeks and the money is used for payroll, rent, mortgage interest, or utilities.

"We don't have the option of raising capital in the public markets owing to our financial restatement process,” Hilary Dixon, a MiMedx representative, told The Times.

The Securities and Exchange Commission sued the company last year over accusations that it had exaggerated its revenue to investors over several years. The case was settled for $1.5 million. No fault was ever admitted. Also, two former top executives were indicted on charges of accounting fraud.