MEA, a health insurance affiliate settles PPP loan fraud claims for $226k.


What is MEA?

MEA is a health insurance affiliate that provides coverage for medical expenses. With a focus on delivering affordable and accessible healthcare, MEA offers a range of insurance plans to meet the needs of individuals and families. Through its network of healthcare providers, MEA ensures that its members receive quality medical care when they need it most. For $225,887, the largest teachers union in Michigan and its affiliate will pay off federal False Claims Act allegations that they took out unqualified loans from the Paycheck Protection Program during the COVID era. The agreement was publicized in the nation’s capital.

According to the DOJ’s report from 2020 December, the MEA and MESSA repaid their loan proceeds of more than $12.5 million.

Each of the two East Lansing, Michigan, businesses have denied any wrongdoing. MESSA handles health insurance for the union’s 120,000 members in Michigan’s K-12 and higher education sectors.

The Central Region Office of the Inspector General for the Small Business Administration released a statement saying, “Those who violate the False Claims Act by fraudulently receiving SBA pandemic program funds meant for eligible small businesses will be held accountable.” Sharon Johnson, the head of the FBI’s special agents, made this statement.

The resolutions reached today to send a strong message that those at fault will be held accountable. I value the efforts of the Justice Department and its law enforcement colleagues.

DOJ Press Release Alleges MEA and MESSA.

According to a press release from the Department of Justice, prosecutors believe that MEA and MESSA knowingly or recklessly caused the Small Business Administration to pay lender fees to the bank that processed their loans despite knowing or having reason to know that they were ineligible to receive PPP loans.

The PPP program was established under the 2020 CARES Act to provide forgivable loans to certain private businesses and some nonprofits to allow them to continue paying employees during the pandemic, but some nonprofits were ineligible for loans under federal rules governing the program.

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“The PPP was intended to provide critical economic relief to eligible small businesses and other entities,” said Principal Deputy Assistant Attorney General Brian M. Boynton, head of the Justice Department’s Civil Division. This settlement shows that the department is committed to maintaining the integrity of the PPP loan program.


According to the Justice Department, this settlement puts an end to a False Claims Act lawsuit brought by the conservative Mackinac Center for Public Policy in Midland. This organization has been a strong critic of the MEA. The Justice Department announced on Monday that it has not yet decided how much money will go to the Mackinac Center as part of the settlement.

Some of the largest PPP loans in the country have been secured by the union and MESSA members “Joseph G. Lehman, president of the Mackinac Center, issued the statement last week. “Amid failing restaurants, stores, and workers, they stole money for which they had no legal claim.

In addition, MEA has agreed to pay $115,000 in pandemic aid processing fees.

The lawsuit brought by the Mackinac Center was deemed “frivolous” and “politically motivated” by MEA. According to a union statement released in April 2020, MEA officials asserted that the union was fully eligible for the PPP program based on the rules published by the federal government at the time the union had applied for a PPP loan.

The union claims that in December 2020, the MEA repaid the loan plus interest in the amount of $6,461,876. As of 2010, MESSA had borrowed $6.13 million, according to PPP data collected by the federal government.

The Mackinac Center sued the MEA in the U.S. District Court for the Western District of Michigan in January 2022, claiming that the MEA had knowingly broken the law by applying for the loan.

According to a press release from the MEA, they are innocent of any wrongdoing, and that “the facts do not back up those claims,” which have more to do with the political agenda of the Mackinac Center than principles of truth or justice.

As the MEA explained it, the union’s decision to settle with the government was motivated by a desire to avoid a “waste” of federal justice resources and the associated costs for MEA members. The MEA will pay $115,265 and the MESSA will pay $110,622 to the bank to settle the loan processing fee dispute.

As the MEA put it in a statement, “MEA did not engage in any wrongdoing,” which is “notable” given the media attention given to “bad actors” who misused PPP loans for their benefit.

On Tuesday, Gisgie Dávila Gendreau, a representative for MESSA, reiterated the organization’s lack of responsibility. There is no connection between the MEA and the MESSA.

“While MESSA was not found liable, we settled a meritless lawsuit with the federal government to avoid the extraordinary time and expense that should instead be invested in the public service workers who stepped up to take care of our children and communities during the pandemic,” Gendreau said.

Gendreau vouched for MESSA’s sincerity, saying the organization had applied for the PPP loan “at a time of unprecedented uncertainty.”

“The loan provided stability,” Gendreau said when it was unclear whether schools and municipalities would be able to pay their share of premium dollars, which could have affected MESSA’s ability to provide health insurance to public servants during a pandemic. After the situation had stabilized, MESSA repaid the loan in full, plus interest.

Jennifer Chambers, an employee writer, assisted.



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