DOJ Formally Establishes National Fraud Enforcement Division, Reassigns Criminal Division Portfolio

On August 18, the US Department of Justice (DOJ) published a Final Rule formally establishing the National Fraud Enforcement Division and reassigning significant portions of the Criminal Division’s portfolio. The rule, effective August 24, amends the Department’s organizational regulations to delegate authority over criminal fraud, tax fraud, health care fraud, trade fraud, and controlled substances distribution and diversion matters to the new Fraud Division. The rule also strips the Criminal Division of its exclusive authority to handle criminal and civil cases involving the illegal distribution and diversion of restricted drugs, allowing the Fraud Division to bring such charges where authorized. These changes formalize directives previously outlined in an April memorandum by then-Acting US Attorney General Todd Blanche. 

The Fraud Division’s stated mission is to investigate and prosecute fraud against taxpayer dollars and taxpayer-funded programs using advanced, data-driven investigative techniques and coordinated federal, state, tribal, territorial, and local law enforcement partnerships. On August 13, US Assistant Attorney General Colin McDonald issued a memorandum outlining five enforcement priorities: public trust and financial integrity, health care, internal revenue, global trade and commerce, and corporate misconduct. 

Read the Final Rule here.

Eleventh Circuit Affirms AKS Convictions for Pain Doctor, Salesman

On August 18, a three-judge panel of the Eleventh Circuit affirmed the convictions and sentences of Dr. Steven Chun, a Florida pain-medicine physician, and Daniel Tondre, a sales representative for now-defunct Insys Therapeutics Inc., for their roles in a kickback conspiracy involving the fentanyl spray Subsys. According to the government, from August 2012 through July 2015, Tondre arranged sham “speaker programs” — ostensibly designed to educate physicians about Subsys but which really functioned as social dinners with little or no attendance, inappropriate attendees, and forged sign-in sheets. Insys paid Chun approximately $278,900 in speaker honoraria in exchange for his high-volume prescribing of Subsys. Following separate jury trials in 2022, Chun was convicted of conspiracy and five counts of violating the Anti-Kickback Statute (AKS) and sentenced to 42 months’ imprisonment; Tondre was convicted of conspiracy, five AKS counts, and two identification-fraud counts and sentenced to 48 months’ imprisonment. 

The Eleventh Circuit found that the evidence of the defendants’ knowing participation in the scheme was “overwhelming,” pointing to testimony from former Insys executives who admitted the speaker programs were illegal, evidence that Chun’s Subsys prescribing increased during the period of the sham events, and forged attendance records. 

Notably, the Eleventh Circuit adopted the Fifth Circuit’s approach in United States v. Shah, holding that, to satisfy the AKS’s federal healthcare program element, the government need only show that the defendant knowingly agreed to accept remuneration for referring patients who “could be federally insured” — rather than patients who were in fact federally insured. The court relied upon the statute’s requirement that payments “may be made … under a Federal health care program” to conclude that a defendant could be liable “if there is a possibility that payment could come from a federal health care program.” 

US Attorney’s Office Files FCA Civil Complaint Against Texas Medical Device Company 

On August 17, the US Attorney’s Office (USAO) for the District of South Dakota announced the filing of a civil complaint against Michael Bingham of North Carolina, and his company, NeuroSolutions 100, LLC of Texas. The complaint alleges that Bingham and NeuroSolutions violated the False Claims Act (FCA) by submitting false claims, false records, and false statements to obtain funds from Medicare. The government seeks a total recovery of $4,591,003. 

According to the complaint, NeuroSolutions improperly billed Medicare for the surgical implantation of electro-neurostimulators, when the devices were allegedly temporary, non-surgical electro-acupuncture devices applied behind patients’ ears using an adhesive and/or with needles inserted into the patient’s ear similar to acupuncture. By billing these non-surgical procedures under codes designated for surgical implantation, the defendants allegedly caused Medicare to reimburse them at significantly higher rates than the services actually provided would have warranted. 

The case is United States v. NeuroSolutions 100, LLC, No. 26-5082 (D.S.D.). 

Read the USAO’s press release here.

A complaint is merely an allegation. All defendants are presumed not to have violated the law until proven otherwise by a preponderance of the evidence in a court of law. 

Ninth Circuit Reverses Lower Court’s Quashing of Gender-Affirming Care Subpoenas 

On August 14, a split Ninth Circuit panel reversed a district court’s quashing of a subpoena issued to QueerDoc, a gender-affirming medical care provider. The court held that President Trump has the authority to direct the DOJ to issue subpoenas that align with his broader policy objectives. The majority found that the Health Insurance Portability and Accountability Act (HIPAA) authorizes what the Administration has characterized as an investigation into possible violations of the Food, Drug and Cosmetic Act (FDCA). 

Writing for the majority, Judge Carlos Bea stated that “the goal of ending ‘gender-affirming care’ is not in and of itself an ‘improper’ policy objective” and that “[t]here is nothing improper about a president having policy preferences and directing the Executive Branch to enforce federal law in a manner consistent with those preferences.” Judge Richard Paez dissented, writing that there is a “mountain of evidence” that the DOJ used the subpoena as pretext for its goal of eliminating gender-affirming care, and warned that the majority’s reasoning “will require federal courts to rubber stamp investigations initiated by the DOJ to harass opponents and chill disfavored causes, so long as the investigation serves the President’s policy priorities.”

The subpoena in question, issued in 2025, sought patient records, Social Security numbers, and home addresses from QueerDoc after President Trump signed an executive order declaring that the country recognizes only two sexes. US District Judge Jamal Whitehead had quashed the subpoena, finding a “mismatch” between the government’s stated investigative purpose and QueerDoc’s actual operations, as the company neither manufactures drugs nor submits insurance claims. The case has been remanded to the district court.

The case is QueerDoc PLLC v. U.S. Department of Justice, No. 25-7384 (9th Cir.). 

Georgia Man Charged in $165 Million Cryptocurrency Ponzi Scheme 

On August 17, the USAO for the Northern District of Georgia announced the indictment of Edward Zimbardi of Georgia for his alleged role in spearheading a $165 million cryptocurrency fraud scheme. According to the indictment, Zimbardi solicited investors to purchase purported advertising packages through a venture he called “The Crypto Program,” guaranteeing 25% returns every 30 days. Using a website and promotional efforts on several online platforms, Zimbardi and unnamed co-conspirators allegedly claimed investors could buy advertising packages affiliated with major technology and media companies. The government alleged that no investments were made in advertising packages, and Zimbardi used investor funds for his own purposes. When the distribution system collapsed in June 2023, Zimbardi rebranded the scheme as “Amsys” and continued operating it until August 2023. 

Zimbardi is charged with wire fraud and money laundering. The case is United States v. Zimbardi, No. 2:26-cr-00035 (N.D. Ga.). 

An indictment is merely an allegation. All defendants are presumed innocent until proven guilty beyond a reasonable doubt in a court of law.

Read the USAO’s press release here.

United States and Illinois Intervene in Qui Tam Action Alleging $5.2 Million Medicare and Medicaid Fraud Against Podiatry Practice and Billing Companies 

On August 17, the USAO for the Northern District of Illinois and the Illinois Attorney General jointly filed a complaint in intervention against Foot & Ankle Health Care Center, Ltd. (d/b/a European Foot and Ankle Clinic), European Foot & Ankle Surgical Care, Ltd. (d/b/a Chicago Home Foot Care), podiatrist Dr. Vadim Goshko, Atlantic Wave Holdings, LLC, Atlantic Wave II, LLC, Mark D. Schmidt, and Will Welter, alleging violations of the federal FCA, the Illinois FCA, and common-law theories of payment by mistake and unjust enrichment. According to the complaint, after Illinois Medicaid terminated Dr. Goshko as a provider on or about May 1, 2019, the defendants allegedly devised a scheme to continue billing Medicaid and Medicare by submitting claims for Goshko’s podiatry services under other physicians’ names and National Provider Identifiers (NPI). The government and Illinois allege that the defendants used fictitious “service locations” in their billing system to track and disguise the fraud. The complaint further alleges that the defendants failed to report Goshko’s Medicaid termination to Medicare within the required 30-day period and extended the scheme by billing services performed by newly hired physicians under other providers’ NPIs to avoid credentialing costs.

The government alleges that the fraud resulted in at least $5,215,857.51 in improper payments from federal and state funds and seeks treble damages and civil penalties under the FCA and Illinois FCA. According to the complaint, Atlantic Wave Holdings acquired the billing company PhysicianDS, and its leadership — including CEO Schmidt and managing director Welter — were informed of the fraudulent billing practices but continued to process and bill Goshko’s claims to Medicare and Medicaid without ever instructing staff to stop. The matter originated as a qui tam action filed by PayrHealth, LLC, which acquired Atlantic Wave II’s assets, discovered the alleged fraud, terminated Goshko as a client, and reported the scheme to the government. 

The case is United States and State of Illinois ex rel. Payrhealth, LLC v. Foot & Ankle Health Care Center, Ltd., No. 21-C-2536 (N.D. Ill.).

A complaint is merely an allegation. All defendants are presumed not to have violated the law until proven otherwise by a preponderance of the evidence in a court of law. 

Read the USAO’s press release here.

Massachusetts Mayor Charged With Wire Fraud and Money Laundering in $1.5 Million COVID-19 Loan Scheme 

On August 13, the USAO for the District of Massachusetts announced a criminal complaint against Brian DePena, the current Mayor of Lawrence, Massachusetts. DePena is alleged to have fraudulently obtained more than $1.5 million in COVID-19 Economic Injury Disaster Loans (EIDLs) through the US Small Business Administration (SBA) and used the funds for personal expenses. The government alleged that DePena unlawfully used the funds to pay off personal tax liabilities, fund his mayoral campaign, and retire nearly $900,000 in high-interest, hard-money mortgages on properties he owned. According to the criminal complaint, DePena applied for and received an initial $150,000 EIDL in 2020 for his tire sales and automobile service business, Tenares Tire Service Inc. He subsequently sought two loan modifications in 2021 that brought the total loan amount to $1,654,400. The complaint alleges that DePena falsely certified in the loan documents that the funds would be used solely as working capital to alleviate economic injury caused by the COVID-19 pandemic.

DePena is charged with one count of wire fraud and one count of money laundering. The case is United States v. DePena, No. 26-MJ-1383-DLC (D. Mass.). 

A criminal complaint is merely an allegation. All defendants are presumed innocent until proven guilty beyond a reasonable doubt in a court of law.

Read the USAO’s press release here.

Illinois Man Charged With Impersonation Scheme to Obtain GLP-1 Medications 

On August 17, the USAO for the Southern District of New York announced a four-count indictment against Rodney Greer of Illinois, charging him with a scheme to impersonate physicians and make false statements to pharmacies to obtain unauthorized prescription medications on behalf of paying customers. According to the indictment, beginning in or about March 2023, Greer acquired personal identifying information for approximately 60 physicians located across 19 states, including their names and National Provider Identification numbers. Between January 2023 and March 2026, Greer allegedly contacted approximately 261 pharmacies on approximately 3,329 occasions, falsely identifying himself as a physician and providing false information to obtain GLP-1 and other prescription medications.

Greer is charged with one count of wire fraud, one count of health care fraud, and two counts of aggravated identity theft. The case is United States v. Greer, No. 26-Crim-342 (S.D.N.Y.). 

An indictment is merely an allegation. All defendants are presumed innocent until proven guilty beyond a reasonable doubt in a court of law.

Read the USAO’s press release here.