USA – TENNESSEE Trends and Developments Contributed by: Alex Little, Zack Lawson, Ted Canter and JR Glover, Litson PLLC
Complex money laundering follows, with particular emphasis on Chinese money-laundering organisa - tions that facilitate drug trafficking. Violations of the Controlled Substances Act and the Federal Food, Drug and Cosmetic Act – especially fentanyl-related offences – rank eighth. Bribery and associated money laundering that under - mine US competitiveness or enrich foreign officials take ninth place. Digital assets crimes round out the list, focusing on schemes that victimise investors or facilitate other criminal conduct, with top priority reserved for cases involving cartels, terrorists, drug- money laundering, or sanctions evasion. The memorandum matters because it clarifies where the DOJ will direct its resources – and, just as impor - tantly, where it will not. Many priorities are not new – federal prosecutors have pursued healthcare fraud, federal programme fraud, and trade fraud for years. But the Galeotti Memorandum provides a framework for understanding which cases will receive priority and draw an aggressive law enforcement response. Enforcement activity in Tennessee over the past year demonstrates that the DOJ is following through on these priorities. From substantial healthcare fraud prosecutions to ongoing COVID-19 cases to the for - mation of a dedicated Trade Fraud Task Force, the department has backed the memorandum’s directives with action. All three Tennessee US Attorney’s Offices are prosecuting these cases. Three enforcement areas demonstrate how the Gale - otti priorities are playing out in Tennessee. For Ten - nessee companies and their counsel, these trends carry significant consequences: large penalties, prison sentences, and reputational harm. Understanding the government’s priorities allows for proactive compli - ance, informed decisions about voluntary disclosure, and strategic risk assessment. Healthcare fraud remains a priority in Tennessee The DOJ has backed this priority with aggressive enforcement. The 2025 National Health Care Fraud Takedown – which the Justice Department described as the largest healthcare fraud takedown in Ameri -
can history – charged 324 defendants with schemes involving USD14.6 billion. The healthcare fraud takedown included multiple fed - eral cases in Tennessee: • In the Middle District of Tennessee, a Hender - sonville doctor and her husband face charges for billing Medicare and Blue Cross Blue Shield approximately USD20 million for in-patient physi - cian services never actually provided. This alleged - ly included billing for instances where the hospital had closed, the patients were in nursing homes, or the patients were deceased. The government seized approximately USD6 million and a Tesla Cybertruck. • In the Western District of Tennessee, three Mem - phis-area defendants face charges for fraudulently billing the Federal Employees’ Compensation Fund approximately USD28.7 million. According to the government, the defendants used a Memphis-area pharmacy to bill for prescriptions drugs that were never in fact prescribed for or dispensed to claim - ants. Healthcare fraud enforcement extends well beyond the takedown, however. Recent Tennessee cases include: • a gynaecologist indicted for conducting medi - cally unnecessary procedures with reused medical devices while billing Medicare and Medicaid; • pharmacy owners in Celina who pleaded guilty to dispensing controlled substances despite obvious signs of abuse while submitting fraudulent claims to Medicare and TennCare; • a Spring Hill laboratory owner sentenced to five years for a multi-state kickback conspiracy involv - ing USD129 million in fraudulent genetic-testing claims; and • an Ashland City doctor who was sentenced to three years for taking kickbacks and causing the submission of more than USD41 million in false and fraudulent claims to Medicare. In addition, the DOJ has launched a False Claims Act Working Group with the Department of Health and Human Services (HHS). The False Claims Act Work -
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