The New Enforcement Calculus: How DOJ Priorities Are Reshaping White-Collar Prosecutions in Tennessee

The federal government is going through a period of significant change. Experienced federal prosecutors and agents are retiring or facing reassignment. Law enforcement resources are shifting towards immigration enforcement, violent crime, and cartel cases. The Department of Justice appears to be pulling back on Foreign Corrupt Practices Act and public corruption prosecutions.

So where does that leave white-collar enforcement in Tennessee?

The answer is surprisingly straightforward: it continues, but with sharper focus. The Department’s Criminal Division has identified ten enforcement priorities. And despite the broader shifts in federal law enforcement, these priorities are already driving prosecutions across Tennessee. Healthcare fraud cases are increasing. COVID-19 fraud prosecutions will extend for years. And a new Trade Fraud Task Force is targeting importers with civil and criminal enforcement tools.

For Tennessee companies and their counsel, the stakes remain high: multimillion-dollar penalties, prison sentences, and reputational harm that can outlast any criminal case. The government may be reorganising, but it has not retreated from white-collar enforcement. It has simply refocused. Understanding that focus – and the cases already demonstrating it – allows for better compliance decisions, smarter risk assessment, and more informed choices about voluntary disclosure.

The Galeotti Memorandum details the DOJ’s new enforcement priorities

In May 2025, the Department of Justice issued a memorandum outlining the Criminal Division’s enforcement priorities under the new administration. Authored by Matthew R Galeotti, who heads the division, the memorandum reaffirms the DOJ’s commitment to white-collar enforcement.

The Criminal Division has distilled its enforcement focus into ten priority areas. Leading the list are waste, fraud, and abuse in government programmes – the healthcare fraud, programme fraud, and other schemes that drain public funds.

Trade and customs fraud, including tariff evasion, comes next. The memorandum then addresses fraud perpetrated through variable interest entities, and Chinese-affiliated shell companies on US exchanges that funnel American capital into strategic Chinese industries with minimal investor protection. Traditional investor protection remains a priority, such as from Ponzi schemes, investment fraud, elder fraud, and other schemes that defraud American investors.

National security threats occupy the fifth and sixth spots. These include sanctions violations by financial institutions enabling cartels, transnational criminal organisations, hostile nation-states, and terrorist groups, along with material support given to those same entities.

Complex money laundering follows, with particular emphasis on Chinese money-laundering organisations 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 undermine 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 importantly, 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 formation 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 Galeotti priorities are playing out in Tennessee. For Tennessee companies and their counsel, these trends carry significant consequences: large penalties, prison sentences, and reputational harm. Understanding the government’s priorities allows for proactive compliance, 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 American history – charged 324 defendants with schemes involving USD14.6 billion.

The healthcare fraud takedown included multiple federal cases in Tennessee:

• In the Middle District of Tennessee, a Hendersonville doctor and her husband face charges for billing Medicare and Blue Cross Blue Shield approximately USD20 million for in-patient physician services never actually provided. This allegedly 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 Memphis-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 claimants.

Healthcare fraud enforcement extends well beyond the takedown, however. Recent Tennessee cases include:

• a gynaecologist indicted for conducting medically 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 involving 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 Working 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 stopping. This is because Congress extended the statute of limitations for prosecutions of the Paycheck Protection 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 extension 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 Kingsport 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 September 2025 to 18 months in prison for defrauding the PPP of over USD5 million. According to information 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 defendants 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 insurance broker was sentenced in March 2025 to one year and a day in prison for fraudulently obtaining and misusing PPP loans. According to court documents, the defendant obtained a USD220,645 loan for a fictitious cattle farm in Crossville, claiming it employed 14 people with monthly payroll exceeding 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 advantages – dirtying up the defendant with evidence of multiple crimes and increasing the likelihood of admissibility 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” against importers and other parties who defraud the United States of tariffs and duties. The Task Force will co-ordinate efforts among the Department’s Civil and Criminal Divisions, as well as the Department of Homeland Security, to enhance enforcement against tariff evasion, goods misclassification, and smuggling of prohibited items.

The Trade Fraud Task Force targets one of the other priority items from the Galeotti Memorandum – trade and customs fraud – which ranked just below waste, fraud, and abuse. The Task Force also follows the trend of cross-agency partnerships designed to pool resources around the Administration’s enforcement priorities, much like the Health and Human Services False Claims Act Working Group referenced above.

The Civil Division will leverage the False Claims Act as a familiar weapon. Since March 2025, the DOJ has reached several significant settlements in key industries, showing what Tennessee companies face. An USD8.1 million settlement with a San Francisco importer resolved allegations of falsifying country-of-origin information to evade anti-dumping, countervailing and Section 301 tariffs on multi-layered wood flooring. A USD12.4 million settlement with a Dallas-based countertop supplier addressed a scheme to evade customs duties for quartz surface products from China. And a USD6.8 million settlement involving plastic resin imports notably came after the company self-disclosed the misconduct following an internal investigation – proof that voluntary disclosure can still mitigate exposure.

The Criminal Division, meanwhile, is deploying its Fraud Section to use “every available tool” to hold bad actors accountable. Prosecutors typically charge commercial trade fraud under three statutes: 18 USC § 541 (entry of goods falsely classified), 18 USC § 542 (entry of goods by means of false statements), and 18 USC § 545 (smuggling goods into the United States). Fraud committed on exportation is often prosecuted under 18 USC § 545 (smuggling goods from the United States). Each of these qualify as specified unlawful activities under the money-laundering statutes, and Homeland Security Investigations (HSI) encourages money-laundering charges in these types of prosecutions.

To date, the US Attorney’s Offices in Tennessee do not appear to have brought criminal or civil charges in this area with the assistance of the Task Force. But Tennessee businesses should not assume they will avoid scrutiny. In May 2025, several months before the Trade Fraud Task Force was announced, the US Attorney’s Office for the Western District of Tennessee sentenced a Memphis man to two years in prison for trafficking counterfeit motor vehicle airbags. The defendant, a retired auto mechanic, imported counterfeit motor vehicle airbag parts from China and assembled the parts to make counterfeit airbags. He then sold the fake airbags on eBay to unsuspecting automobile repair shops. These types of cases were already in the enforcement pipeline, and they are not going anywhere. 

Given the complexity of tariff regulations and this intensifying enforcement focus, Tennessee companies should consider several steps now. First, audit compliance programmes to identify gaps in product classification, valuation, country-of-origin determinations, and trans-shipment risks. Second, strengthen supply chain due diligence, particularly when working with suppliers in jurisdictions with lower tariffs or limited regulatory oversight. Third, investigate whistle-blower or hotline reports promptly to ensure inquiries are properly addressed. When violations are discovered, companies should carefully assess whether voluntary disclosure is appropriate – particularly in industries experiencing increased enforcement or where affected goods originate from countries like China, which are drawing heightened scrutiny.

The Trade Fraud Task Force suggests that we will see additional enforcement activity in this area. Tennessee companies would be wise to take notice.

Conclusion

The Department of Justice has not abandoned white-collar enforcement – it has refined it. Federal prosecutors across all three Tennessee districts are already bringing cases that align with the DOJ’s stated priorities. Companies that understand the government’s priorities, assess their risks honestly, and respond proactively to potential violations will fare better than those caught unprepared.