DOJ Fraud Section Year in Review 2025: What Private Equity Sponsors and Their Portfolio Companies Should Know

by Lewis Zirogiannis, P.C., Michael R. Huttenlocher, Joyce Cowan, Matthew Smith and Yoav Gaffney

 

I.       Introduction

 

In January 2026, the Department of Justice Criminal Division’s Fraud Section released its Year in Review for 2025, a document worth reviewing for private equity sponsors and their portfolio companies across a range of industries.  The 2025 report reflects a significant expansion of both the Fraud Section’s mandate and resources.  The Fraud Section now has more than 200 attorneys—the largest in its history—and has assumed the criminal portfolio and personnel of the former Consumer Protection Branch, uniting expertise in its effort to more comprehensively protect the American public.

 

The numbers tell an interesting story: the Fraud Section charged 265 defendants in 2025 (an over 10% increase from the prior year), with aggregate intended fraud loss exceeding $16 billion—a record and more than double 2024’s total.  Corporate accountability remained a central pillar of the Section’s work, resulting in 15 corporate enforcement actions, including 12 corporate resolutions and 3 corporate indictments.  These cases resulted in combined resolution amounts of approximately $1 billion.  Notably, for the first time in over 15 years, the Fraud Section indicted corporate entities for criminal activity, signaling an evolving enforcement approach.

For private equity sponsors and portfolio company leadership teams, this report offers a useful window into where the DOJ is focusing its attention.  Understanding these priorities can help inform investment decisions, due diligence practices, compliance planning, and risk management discussions at both the sponsor and portfolio company levels.

 

II.       Where the DOJ Is Focusing: 2025 Enforcement Priorities

 

The 2025 Year in Review identifies several key enforcement priorities across the Fraud Section’s four litigating units which are worth keeping on your radar:

 

• Foreign Corrupt Practices Act (FCPA) and Anti-Bribery Enforcement. The FCPA Unit, composed of over 20 prosecutors, is responsible for investigating and prosecuting violations of the FCPA and the Foreign Extortion Prevention Act (FEPA). In June 2025, the Deputy Attorney General issued new Guidelines for FCPA enforcement, highlighting four non-exhaustive priority areas: (1) investigation and prosecution of foreign bribery conduct that facilitates the operations of cartels and transnational criminal organizations; (2) conduct that deprives U.S. companies of fair opportunities to compete; (3) conduct that undermines U.S. national security interests; and (4) conduct involving substantial bribe payments and efforts to conceal criminal schemes.  The Fraud Section brought three corporate enforcement actions under the FCPA in 2025, including the first corporate indictment in 15 years against SGO Corporation (Smartmatic) for alleged bribery and money laundering in connection with Philippine election contracts.

 

• Health Care Fraud. The Health Care Fraud (HCF) Unit had a record-setting year, leading the largest coordinated nationwide effort to combat and deter health care fraud in the Department’s history. In June 2025, the Department charged 324 individuals—including 96 licensed medical professionals—across 50 federal districts and 12 state jurisdictions, with alleged losses exceeding $14.6 billion.  The report states that ongoing health care fraud enforcement priorities include: protecting the public fisc through seizure and forfeiture; targeting foreign actors; addressing addiction rehabilitation fraud; tackling prescription drug abuse; and pursuing corporate enforcement.  Health care sectors with specific enforcement initiatives include wound care, digital health technology, substance abuse treatment providers and telemedicine providers.  Additionally, an NPA with Troy Health, Inc., a Medicare Advantage plan accused of enrolling beneficiaries without their consent, shows continued interest in Medicare Advantage fraud.  In 2025, the HCF Unit seized more than $568 million in assets, the Centers for Medicare and Medicaid Services (CMS) prevented more than $4 billion in fraudulent payments, and CMS suspended the billing privileges of 205 providers.

 

• Health and Safety Enforcement. The newly formed Health and Safety Unit (HSU) focuses on ensuring products distributed to consumers meet legal obligations. The HSU criminally enforces the Federal Food, Drug, and Cosmetic Act (FDCA), pursuing offenses involving food, prescription medications, counterfeit pills, medical devices, dietary supplements, and tobacco.  The HSU also brings criminal enforcement actions under the Consumer Product Safety Act and the Federal Hazardous Substances Act, targeting dangerous products and the knowing failure by companies or individuals to report defects or hazards presenting unreasonable risk of death or injury to consumers.

 

• Market, Government, and Consumer Fraud. The Market, Government, and Consumer Fraud (MGC) Unit prosecutes: (1) fraud and manipulation harming U.S. markets and investors; (2) schemes to defraud government programs, evade tariffs, and procure government contracts fraudulently; and (3) complex consumer fraud targeting Americans. In 2025, the MGC Unit expanded its mandate through integration of the former Consumer Protection Branch, adding over 20 consumer fraud prosecutors.  Priority areas include: securities fraud schemes involving foreign issuers and variable interest entities (VIEs); trade and tariff fraud; procurement fraud; and consumer investment scams.

 

• Trade Fraud Task Force. The MGC Unit is now part of the cross-agency Trade Fraud Task Force, which pursues enforcement actions against parties who seek to evade tariffs and other duties, as well as smugglers importing prohibited goods. The MGC Unit brought its first corporate and individual trade fraud case in 2025.

 

III.       What This Means for Private Equity Sponsors and Portfolio Companies

 

The 2025 Year in Review offers several practical takeaways for private equity sponsors and their portfolio companies:

 

• Corporate Liability and Indictments. One notable development is the Fraud Section’s renewed willingness to indict corporate entities, as evidenced by the first corporate indictments in over 15 years. This marks a departure from the Section’s traditional exclusive reliance on Deferred Prosecution Agreements (DPAs) and Non-Prosecution Agreements (NPAs).  This is a shift worth noting: the DOJ appears more willing to bring criminal charges against companies, not just individuals, in appropriate circumstances.

 

• Industry-Specific Considerations. Portfolio companies in certain sectors may want to pay particular attention to these developments:

 

• Healthcare: The HCF Unit’s active enforcement year is particularly relevant for healthcare portfolio companies. In addition to the June Takedown, the Unit indicted two corporate defendants and resolved allegations with two others in 2025—its first such resolutions in nearly a decade. Portfolio companies providing skilled nursing facilities, telemedicine, durable medical equipment, addiction treatment, pharmaceutical distribution, Medicare Advantage plans or services, and wound care may see continued attention.  The prosecution of KBWB Operations LLC (Atrium Health and Senior Living), which operated 23 skilled nursing facilities and resulted in a guilty plea, $146 million in restitution, and $8.4 million in forfeiture, provides a concrete example of the types of cases the DOJ is pursuing.  An HCF Data Fusion Center is being created to leverage cloud computing, artificial intelligence, and advanced analytics to identify emerging healthcare fraud schemes.  The ability to readily analyze billing trends within a subsector may be of particular concern to investors in provider sectors that bill federal health care programs (e.g., Medicare and Medicaid).

 

• Life Sciences and Medical Devices: The Kimberly-Clark Corporation resolution illustrates the DOJ’s continued attention to medical device companies. Kimberly-Clark entered a DPA and agreed to pay up to $40.4 million to resolve charges stemming from the sale of adulterated surgical gowns that failed to meet required fluid-resistance standards.  The Aesculap Implant Systems NPA involving forged FDA documents and the illegal introduction of medical devices into interstate commerce is another corporate example in this space.  As in healthcare, the DOJ also pursued individual violators in this space in 2025.

 

• Consumer Products and Manufacturing: The integration of the Consumer Protection Branch into the Fraud Section expands enforcement capacity for violations involving consumer product safety, hazardous substances, and import fraud. The HSU will pursue companies that fail to report defects or hazards posing unreasonable risk of death or injury.  The prosecution of Royal Sovereign for fire hazard defects in dehumidifiers and failure to report those hazards is a useful case study for companies thinking about product safety compliance.

 

• International Operations: Portfolio companies with international operations, particularly those doing business with or through foreign governments, will want to keep FCPA compliance top of mind. The TIGO Guatemala resolution—in which the telecommunications company agreed to pay over $118 million in connection with bribery of Guatemalan government officials—demonstrates that subsidiaries of international companies remain enforcement targets.  The Liberty Mutual declination shows that voluntary self-disclosure, full cooperation, and timely remediation may result in favorable outcomes.

 

• Government Contractors: Portfolio companies with federal contracts should be aware of continued procurement fraud enforcement. The Vistant and Apprio corporate resolutions, arising from a decade-long bribery scheme involving a USAID contracting officer and over $550 million in prime contracts, highlight the importance of robust controls in this area.

 

• Compliance Program Expectations. The DOJ’s Corporate Enforcement and Compliance (CEC) Unit has responsibility for evaluating corporate compliance programs and determining whether independent compliance monitors should be imposed. Last updated in September 2024, the Evaluation of Corporate Compliance Programs Guidance (ECCP) sets forth three fundamental questions for prosecutors: (i) is the corporation’s compliance program well designed? (ii) is the program adequately resourced and empowered to function effectively? and (iii) does the corporation’s compliance program work in practice?  These questions offer a helpful framework for sponsors conducting portfolio company reviews and for GCs and compliance teams assessing their own programs.

 

• Voluntary Self-Disclosure Benefits. The Corporate Enforcement Policy (CEP) provides significant benefits for companies that voluntarily self-disclose misconduct. In 2025, the Department revised the CEP to describe the path to a declination based on a timely voluntary self-disclosure, cooperation, and remediation. The Liberty Mutual declination illustrates these benefits: the company voluntarily self-disclosed FCPA violations involving bribes totaling approximately $1.47 million to Indian government officials, fully cooperated, conducted a thorough root-cause analysis, separated personnel involved, and made significant compliance improvements—resulting in a declination with only disgorgement of $4,699,088 rather than criminal charges.

 

• Compensation Clawbacks and Incentives. The Pilot Program on Compensation Incentives and Clawbacks requires companies entering criminal resolutions to implement and report on compliance-related criteria in their compensation and bonus systems during the resolution term. This program also allows for possible fine reductions based on corporate efforts to recoup compensation from culpable employees.  Private equity sponsors may want to discuss these requirements with compensation committees and HR leadership at portfolio companies, particularly when structuring management incentive plans, as the program demonstrates the DOJ’s continued focus on individual accountability.

 

• Individual Accountability. The Pilot Program on Voluntary Self-Disclosures for Individuals, launched in April 2024, details circumstances in which the Department will offer non-prosecution agreements to individuals who voluntarily disclose original information about certain criminal conduct involving corporations, fully cooperate, and pay applicable restitution or disgorgement. This program is worth understanding, as it may encourage employees with knowledge of misconduct to come forward.  Strong internal reporting channels can help ensure issues are identified and addressed internally first.

 

• Monitor and Reporting Obligations. The DOJ reported 39 active resolutions with Fraud Section-imposed reporting obligations in 2025, with 33 corporate entities under self-reporting requirements and 6 under independent monitorships. The May 2025 Revised Memorandum on Selection of Monitors clarified factors prosecutors must consider when determining whether a monitor is appropriate and how to tailor the scope of a monitor’s review.  For companies that do find themselves in a resolution, these ongoing obligations are worth factoring into planning.

 

IV.       Practical Considerations Going Forward

 

Given these developments, private equity sponsors and portfolio company senior management teams may want to consider:

 

• Pre-Acquisition Due Diligence. For private equity sponsors evaluating potential investments, the DOJ’s enforcement priorities provide useful guidance in evaluating investment decisions and shaping due diligence protocols around potential compliance risks. Particular focus should be placed on compliance with the FCPA, trade sanctions, health care fraud and abuse laws, FDA regulations, consumer product safety requirements, and tariff obligations.

 

• Portfolio Company Compliance Assessments. Private equity sponsors may want to consider conducting periodic compliance assessments across their portfolio. The ECCP framework offers a useful benchmark for these reviews as well as for GCs looking to assess the strength of their programs.  This assessment should include evaluation of program design, adequacy of resources and empowerment, and real-world effectiveness.  Special attention should be paid to companies operating in the priority enforcement areas identified in the 2025 report: health care, life sciences, consumer products, government contracting, and businesses with international operations.

 

• Voluntary Self-Disclosure Assessment and Readiness. The revised CEP’s emphasis on voluntary self-disclosure as the path to declination is worth understanding, particularly for companies thinking about how they would respond if potential misconduct were identified. Companies benefit from having clear internal reporting mechanisms, investigation protocols, and decision frameworks for evaluating whether voluntary self-disclosure is appropriate when potential misconduct is identified.  The Liberty Mutual outcome demonstrates the benefits of timely disclosure, full cooperation, and appropriate remediation.

 

• Compensation and Clawback Provisions. The DOJ’s Pilot Program on Compensation Incentives and Clawbacks is worth considering when private equity sponsors and portfolio company boards review executive compensation arrangements. Incorporating compliance-related criteria and clawback provisions may be worthwhile.  Such provisions may also provide fine reduction benefits in the event of a resolution.

 

• International Operations Review. Portfolio companies with international operations, particularly those involving government customers or operating in higher-risk jurisdictions, may benefit from periodic FCPA and anti-bribery compliance reviews. The FCPA Guidelines’ focus on conduct involving cartels and transnational criminal organizations, unfair competitive advantages, national security implications, and substantial bribe payments can help inform risk assessment priorities.

 

• Product Safety and Regulatory Compliance. For portfolio companies manufacturing or distributing consumer products, medical devices, pharmaceuticals, or food products, this is a good time to review product safety compliance programs, including defect reporting obligations under the Consumer Product Safety Act and FDA regulations. The HSU’s focus on knowing failures to report defects or hazards underscores the importance of timely reporting and remediation.

 

• Trade Compliance Programs. With the establishment of the Trade Fraud Task Force and the MGC Unit’s first trade fraud case in 2025, companies engaged in international trade may want to take a fresh look at tariff and customs compliance programs. This is particularly important given current trade policy developments and heightened tariff enforcement.

 

• Ongoing Monitoring and Board Reporting. Regular monitoring and board-level reporting on compliance matters remains a best practice. The DOJ’s oversight of 39 active resolutions with reporting obligations is a reminder that compliance is an ongoing commitment, not a one-time exercise.

 

V.       Conclusion

 

The DOJ Fraud Section’s 2025 Year in Review reflects an active and evolving enforcement environment.  The record-setting activity, expansion into new areas like consumer protection and trade fraud, and renewed willingness to indict corporations all suggest that compliance deserves continued attention at the board and management level.  For private equity sponsors and portfolio company senior management, the report offers helpful insight into the DOJ’s current thinking and priorities—information that can inform thoughtful investment decisions, compliance planning, and risk management.  We are happy to discuss any of these developments in more detail and how they may relate to your specific situation.