USA Trends and Developments Contributed by: Daniel J. Fetterman and Brian S. Choi, Kasowitz LLP
Introduction The current administration has articulated law enforce - ment priorities that do not necessarily track the con - ventional white-collar issues that prior administrations had focused on. The White House, Department of Justice (DOJ), and its partner law enforcement agen - cies have strived to create a business-friendly environ - ment while promulgating policies aimed at preserv - ing economic and national security interests. These policies present a promising path forward for many companies under investigation, particularly under the newly revised Corporate Enforcement Policy (CEP) that mandates a declination of prosecution so long as a company timely and voluntarily self-reports its mis - conduct, co-operates with the government’s investi - gation, and remediates. But it would be a mistake for companies and their leadership to believe that they are far removed from regulatory risk even in the current environment. The administration has prioritised rooting out and combat - ting fraud in healthcare, government contracting, and tariffs and customs duties, and has utilised expansive and powerful provisions under the False Claims Act to do so. And companies caught in the crosshairs of DOJ and other law enforcement agencies must grapple with the reality that their executives and employees remain vulnerable to prosecution as the administration has prioritised holding individuals accountable. The Surge in False Claims Act Enforcement Is Likely to Continue In the past year, the current administration has pri - oritised white-collar enforcement under the False Claims Act (FCA), recovering over USD6.8 billion in settlements and judgments – an amount that repre - sents the “highest in a single year in the history of the False Claims Act”. DOJ reported a record-high 1,297 qui tam lawsuits by whistle-blowers and 401 investi - gations. The government’s focus on the FCA aligns closely with the white-collar “high-impact areas” that the Criminal Division prioritised in a May 2025 memo: “[w]aste, fraud, and abuse, including healthcare fraud and federal program and procurement fraud that harm the public fisc” – ie, those areas that waste or steal government funds. With the White House’s recent announcement creating a “division for national fraud enforcement” within DOJ, the administration’s focus
on “combat[ting] the rampant and pervasive problem of fraud in the United States” is highly likely to con - tinue unabated. There are three distinct industries that appear to be the focus of DOJ’s FCA-related enforcement. First, the vast majority of the government’s claims are expect - ed to arise from healthcare fraud. In fiscal year 2025 alone, DOJ recovered over USD5.7 billion in cases ranging from Medicare and Medicaid fraud to miscon - duct relating to prescription drug pricing and illegal kickbacks, and improper billing by healthcare provid - ers for medically unnecessary services. Second, the government has prioritised procurement and government contracting cases where, among other things, contractors are being targeted for their failure to meet cybersecurity requirements. For exam - ple, in May 2025, major weapons manufacturer Ray - theon Company and intelligence services company Nightwing Group agreed to pay USD8.4 million to resolve claims that they failed to implement cyberse - curity controls in a system used to perform work for the Department of Defense. Cyberfraud is a rapidly growing area within FCA enforcement. The current administration has resumed and amplified the work of the prior administration’s Civil Cyber-Fraud Initia - tive, utilising the FCA to “pursue cybersecurity related fraud by government contractors and grant recipi - ents”. In the past year, DOJ recovered over USD52 million in nine cybersecurity fraud settlements. Third, there is likely to be a heightened focus on fraud relating to tariffs and customs duties with the launch of the Trade Fraud Task Force – a cross-agency partner - ship between DOJ and the Department of Homeland Security to pursue “any parties who seek to evade tar - iffs and other duties, as well as smugglers who seek to import prohibited goods into the American economy”. Last year, DOJ secured a series of settlements rang - ing from USD4.9 to USD12.4 million to resolve claims against companies that had evaded paying duties on products imported from China. And, in December 2025, DOJ secured a record-breaking settlement with Ceratizit USA LLC, a distributor of tungsten carbide products, for USD54.4 million to resolve claims that it failed to pay duties on products imported from China.
230 CHAMBERS.COM
Powered by FlippingBook