USA Trends and Developments Contributed by: Daniel J. Fetterman and Brian S. Choi, Kasowitz LLP
Outside of specific industries, the government is expected to continue investigating two distinct areas – fraud in connection with the Paycheck Protection Program (PPP) and what the administration perceives as fraud in connection with Diversity, Equity, and Inclu - sion initiatives. Six years removed from Congress’s enactment of the Paycheck Protection Program, DOJ has ramped up its investigations and enforcement actions into companies that were ineligible to receive PPP funds, or lenders that processed loans for ineligi - ble borrowers. Given that the statute of limitations for pandemic-related fraud is ten years, the government is expected to actively litigate these cases for the next five years. And just this year, DOJ notched its first FCA settlement under a Civil Rights Fraud Initiative that it announced in May 2025, as IBM agreed to pay more than USD17 million for its alleged non-compliance with anti-discrimination requirements in its federal contracts. Specifically, the government alleged that IBM had factored race, colour, national origin, or sex into account when making employment decisions, including by using a diversity modifier that tied bonus compensation to achieve demographic targets. DEI and civil rights-related enforcement under the FCA is likely to surge this year following remarks from Deputy Assistant Attorney General Brenna Jenny that “DEI is a priority for us, and these cases are receiving expe - dited priority treatment”. DOJ is also likely to tap into a fertile source of informa - tion from the Criminal Division’s Corporate Whistle - blower Awards Pilot Program (the “Whistleblower Program”) to fuel its surge of FCA enforcement. In May 2025, DOJ expanded the Whistleblower Pro - gram, which was first created in 2024, to broaden the array of offences eligible for awards. While the original pilot programme covered financial institution crimes, foreign bribery, domestic bribery and kickbacks, and healthcare offences, the expanded programme now encompasses procurement and federal programme fraud, trade and customs fraud, federal immigration violations, and support for foreign terrorist organisa - tions, cartels, and transnational criminal organisa - tions. Unsurprisingly, these additional offences eligi - ble for an award under the programme directly reflect the priorities of the current administration. And the expansion appears to have yielded fruitful results. In September 2025, DOJ reported that since the expan -
sion, it received 313 tips and found that 120 of them warranted additional investigation, “including a num - ber of tips relating to... priority areas – procurement fraud, trade fraud, and sanctions evasion”. A Neutered Approach to FCPA Cases Under the Corporate Enforcement Policy While DOJ’s FCA enforcement has surged, its enforce - ment of the Foreign Corrupt Practices Act (FCPA) has diminished significantly under the current administra - tion. Initially, the White House in February 2025 issued an Executive Order suspending FCPA enforcement for 180 days, finding that “overexpansive and unpredict - able” actions “against American citizens and business – by our own Government – for routine business prac - tices in other nations not only wastes limited pros - ecutorial resources … but actively harms American economic competitiveness and, therefore, national security”. In June 2025, DOJ’s Criminal Division issued updated guidelines on FCPA cases largely echoing the White House’s priorities: to “limit... undue burdens on American companies that operate abroad”, and target conduct “that directly undermines U.S. national inter - ests”. Beyond US economic and national security, the guidance specifically calls out the prosecution of brib - ery “that facilitates the criminal operations of Cartels and [transnational criminal organisations]” and poten - tially companies operating in “[t]erritories dominated by Cartels, criminal gangs, and other transnational criminal organisations” that “threaten the erosion of the rule of law and economic growth”. While DOJ’s FCPA guidance may explain part of the diminished FCPA enforcement activity, another DOJ policy appears to have had a material impact on the disposition of FCPA cases, particularly for corpora - tions under investigation. In June 2025, DOJ’s Criminal Division issued a revised CEP designed to streamline the charging calculus in cases involving companies. By and large, the CEP offered potential benefits to companies that (i) voluntarily self-disclosed miscon - duct, (ii) fully co-operated with DOJ’s investigation, and (iii) timely and appropriately remediated. While prior iterations of the CEP created a presumption of a declination if a company satisfied these requirements, the revised version requires a declination. What’s more, even in “near miss” cases involving delayed self-reporting or aggravating circumstances, the CEP
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