On June 16, the U.S. Department of Justice’s (DOJ) National Security Division (NSD) and the U.S. Attorney’s Office for the Southern District of Texas (USAO-SDTX) announced their decision to decline prosecution of White Deer Management LLC (White Deer), a private equity firm that voluntarily disclosed export control and sanctions violations committed by its newly acquired portfolio company, Unicat Catalyst Technologies LLC (Unicat).[1] This is the first public declination issued under NSD’s M&A Safe Harbor Policy, which applies to voluntary self-disclosures involving potential violations of export control, sanctions, and national security laws.[2]
Order Limiting Strict Liability Has Implications on FDCA Enforcement for Companies, Individuals
On May 9, 2025, President Trump signed an Executive Order titled “Fighting Overcriminalization in Federal Regulations.” The Order seeks to reduce the regulatory burden on Americans and prevent individuals from being criminally penalized for unknowingly violating complex regulations. In pursuit of these goals, the Order sets forth a policy “generally disfavor[ing]” strict liability crimes. Agencies are directed to consider “civil rather than criminal enforcement of strict liability regulatory offenses,” with criminal prosecution reserved for cases involving “persons who know or can be presumed to know what is prohibited or required by the regulation and willingly choose not to comply, thereby causing or risking substantial public harm.” The Order further directs agencies to complete several longer-term tasks, including preparing a report for the Office of Management and Budget containing a list of criminal offenses they or the U.S. Department of Justice (DOJ) enforce, and identifying whether the offenses have a mens rea requirement.
The Risks of Rushing In: A Closer Look at DOJ Criminal Division’s Updated Corporate Enforcement Policy in the Broader Enforcement Landscape
I. Introduction: More Clarity, But Not a Complete Roadmap
On June 10, Matthew Galeotti, the Head of the U.S. Department of Justice’s (DOJ) Criminal Division, delivered remarks at an event hosted by the American Conference Institute,[1] in which he discussed recent updates to the division’s Corporate Enforcement and Voluntary Self-Disclosure Policy (CEP).[2] The revisions mark the new administration’s most detailed articulation to date of what companies can expect when they come forward to disclose misconduct to the Criminal Division. As Galeotti reiterated in his remarks,[3] the new CEP focuses on three core updates: a streamlined voluntary self-disclosure framework, tighter limits on corporate monitorships, and new whistleblower incentives and policies—including a carveout that allows companies to retain eligibility for a declination even when DOJ learns of misconduct through an internal report.
Healthcare Fraud Enforcement in a Second Trump Administration: Trends, Priorities, and Implications
On May 12, 2025, the United States Department of Justice’s (“DOJ”) Criminal Division released a major policy memorandum outlining its enforcement priorities for the upcoming year. Unsurprisingly, the number one priority for the Division was investigating and prosecuting white-collar crimes related to waste, fraud, and abuse—and particularly healthcare fraud. This emphasis on prosecuting healthcare fraud reflects the current administration’s broader goals of eliminating waste in federal programs, such as Medicare, Medicaid, and TRICARE, and ensuring that taxpayer dollars are used efficiently and effectively.
Supreme Court Declines to Narrow Reach of Federal Fraud Law
On May 22, 2025, the Supreme Court published its opinion in Kousisis v. United States, No. 23-909, 605 U.S. __ (2025), holding that one who induces a victim to enter into a transaction under materially false pretenses may be convicted of federal fraud even without the intent to cause the victim economic loss. In a unanimous decision, the Court upheld the validity of federal fraud convictions when the defendants delivered the full economic value of the deal. This breaks a trend of recent Supreme Court decisions that have more generally limited the government’s ability to prosecute fraud and corruption cases.
FDA to Expand Unannounced Inspections of Foreign Facilities — Manufacturers, Research Firms Should Prepare
On May 6, 2025, the U.S. Food and Drug Administration (FDA) announced a plan to expand its use of unannounced inspections of foreign manufacturing facilities that produce foods, essential medicines and other medical products intended for American consumers and patients. The FDA stated that this new inspection strategy will ensure that foreign manufacturers receive the same level of oversight and regulatory scrutiny as domestic companies. Key aspects of the FDA’s plan include:
- Increased Frequency: The FDA will increase the frequency of unannounced inspections at foreign facilities.
- Elimination of Double Standard: The FDA stated that the move ensures that foreign manufacturers are held to the same standards and oversight as domestic companies.
- Exposing Bad Actors and Ensuring Safe Prescription Drugs: The FDA explained that unannounced inspections will help expose bad actors (e.g., those who falsify records or conceal violations) and ensure that every product entering the U.S. is safe, legitimate and honestly made.
- Increased Enforcement Activity: The FDA emphasized that it is authorized to take regulatory action against any company that attempts to delay, deny or limit an unannounced inspection.
Read on to learn more about the FDA’s new policy and key considerations for stakeholders.
Enforcement and Prosecution Policy and Trends, Fraud, Deception and False Claims, Government Contracts
DOJ Announces Initiative to Use False Claims Act to Investigate DEI Practices
On May 19, 2025, the U.S. Department of Justice’s (DOJ) Deputy Attorney General announced its new Civil Rights Fraud Initiative, which aims to use the False Claims Act (FCA) to investigate and pursue claims against entities that tolerate antisemitism, allow men to enter women’s spaces or compete in female athletic competitions, or engage in unlawful diversity, equity, and inclusion (DEI) practices.
Executive Order Initiates Commercial Focus in Federal Procurement Reform
On April 16, 2025, the Trump Administration issued an Executive Order titled “Ensuring Commercial, Cost-Effective Solutions in Federal Contracts,” which establishes the Administration’s policy of procuring “commercially available products and services, including those that can be modified to fill agencies’ needs, to the maximum extent practicable.” This includes procurements made pursuant to the Federal Acquisition Streamlining Act of 1994 (“FASA”). This comes one day after the release of another Executive Order titled “Restoring Common Sense to Federal Procurement,” which McGuireWoods has previously covered. Both Executive Orders are among the first of the Administration’s major policy positions as pertaining to reform of the federal government’s procurement process.
DOJ Signals Shift in White Collar Enforcement: New Policies Stress Proportionality, Partnership, and Clarity
In a major policy address delivered yesterday at the Security Industry and Financial Markets Association’s (SIFMA) Anti-Money Laundering and Financial Crimes Conference in Washington, D.C., Matthew Galeotti, Head of the U.S. Department of Justice’s (DOJ) Criminal Division, announced a significant shift in how DOJ approaches white collar enforcement. The changes reflect a broader recalibration toward “focus, fairness, and efficiency,” and emphasize DOJ’s intent to partner with law-abiding companies rather than punish them indiscriminately.
Restoring Common Sense to Federal Procurement – The White House
On April 15, 2025, the Trump Administration issued an Executive Order titled “Restoring Common Sense to Federal Procurement” that seeks to reform the Federal Acquisition Regulation (“FAR”) and agency-specific supplements to contain only those “provisions required by statute or essential to sound procurement.” Along with a supplemental fact sheet, the Executive Order states that “any FAR provisions that do not advance these objectives should be removed.” This overhaul of the FAR has been widely anticipated during the first few months of the Trump Administration, although its implementation is expected to be a multi-year process.