USA – TENNESSEE Trends and Developments Contributed by: Alex Little, Zack Lawson, Ted Canter and JR Glover, Litson PLLC
ing Group, announced in July 2025, co-ordinates enforcement across the HHS and DOJ. Its priority areas include Medicare Advantage; drug and device pricing; barriers to patient access; kickbacks related to drugs, devices, and equipment; defective medical devices; and manipulation of electronic health records. The Working Group encourages both whistle-blower reports and voluntary corporate disclosures. Tennessee healthcare providers should expect aggressive prosecution to continue. The long tail of COVID 19-related fraud prosecutions White-collar practitioners in Tennessee have grown accustomed to headlines trumpeting enforcement actions for COVID-19 fraud. More than five years after the pandemic began, this shows no signs of stop - ping. This is because Congress extended the statute of limitations for prosecutions of the Paycheck Pro - tection Program (PPP) and Economic Injury Disaster Loan (EIDL) fraud – two of the more pervasive forms of COVID-19 fraud – to ten years in 2022. This exten - sion ensures that federal prosecutors will be pursuing COVID-19 fraud cases for the foreseeable future. This remains a priority enforcement area under the Galeotti Memorandum – part of its focus on fighting fraud, waste, and abuse – and it has been an active area of enforcement for all three US Attorney’s Offices in Tennessee over the last year: • The Eastern District of Tennessee saw a King - sport man plead guilty in September 2025 to tax crimes and wire fraud for his role in a scheme to claim fraudulent refunds based on false COVID-19 employment tax credits. The defendant and his co-conspirators created phoney businesses lacking any employees or operations for the sole purpose of claiming bogus credits. They filed false tax returns claiming over USD3.4 million in refunds and received over USD1.8 million from the IRS. The defendant faces sentencing in January 2026. • In the Western District of Tennessee, an Olive Branch, Mississippi woman was sentenced in Sep - tember 2025 to 18 months in prison for defrauding the PPP of over USD5 million. According to infor - mation presented in court, the woman was a loan
aggregator who submitted fraudulent PPP loan applications on behalf of others, using fake federal tax documents to support the applications. When borrowers obtained the funds, they allegedly paid her kickbacks of 20–30%. • In the Western District of Tennessee, eight defend - ants were sentenced for their roles in a scheme to defraud COVID-19 relief programmes of over USD17 million. The defendants submitted false PPP and EIDL loan applications with fraudulent information about employees, revenue, and payroll, then used the proceeds for unauthorised personal expenses. The lead defendant was sentenced to 58 months in prison, while sentences for the remaining defendants ranged from one month to 23 months in prison, with some also receiving home detention. • In the Middle District of Tennessee, a Texas insur - ance broker was sentenced in March 2025 to one year and a day in prison for fraudulently obtaining and misusing PPP loans. According to court docu - ments, the defendant obtained a USD220,645 loan for a fictitious cattle farm in Crossville, claiming it employed 14 people with monthly payroll exceed - ing USD88,000. She submitted fake W-2 forms and Tennessee Secretary of State records as proof. She then received a second fraudulent loan for another fictitious company and misused proceeds from a third loan to begin installing a personal swimming pool. Given the widespread nature of COVID-19 fraud, and the extended statute of limitations, practitioners will likely continue to see COVID-19 charges tacked onto other fraud cases. This offers prosecutors two advan - tages – dirtying up the defendant with evidence of multiple crimes and increasing the likelihood of admis - sibility without the need to navigate Federal Rules of Evidence 404 (b) and 403. The Trade Fraud Task Force: enhanced enforcement on the horizon The Galeotti Memorandum’s enforcement priorities are not just aspirational – the DOJ is dedicating real resources to carrying them out. In August 2025, the DOJ launched a cross-agency Trade Fraud Task Force to bring “robust enforcement”
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