Justice Department Sharpens Focus on Health Fraud, Customs Violations in 2026 Enforcement Push

The U.S. Department of Justice is accelerating its fraud enforcement efforts with institutional investments designed to streamline case development and target priority areas with greater precision. Recipients of federal funds—particularly health care companies, importers, and private equity firms—should prepare for heightened scrutiny and more sophisticated enforcement strategies in the coming year.

A key development in this evolving landscape is the DOJ-Health and Human Services False Claims Act Working Group, launched in July. This formal collaboration strengthens the government’s approach to combating waste, fraud, and abuse in federal health care programs, which remain top enforcement priorities.

The Working Group specifically aims to streamline referrals between agencies, align civil and criminal remedies, and direct whistleblowers toward priority issues. It also positions the government to initiate investigations independently, an important capability as constitutional challenges to qui tam provisions continue.

For health care organizations, this integration means a higher likelihood of government-initiated inquiries, earlier detection of potential violations through data analytics, and improved coordination across federal agencies. Industry experts recommend that providers, manufacturers, and distributors refresh their risk assessments and tighten controls on arrangements tied to federal reimbursement, particularly referral relationships, patient support programs, and pricing structures.

Artificial intelligence has emerged as another significant focus area as it transforms clinical documentation, coding, and claims processes. The DOJ-HHS Working Group has specifically flagged AI-driven manipulation of electronic health records as a priority enforcement target.

In 2026, regulators are expected to intensify scrutiny of generative and predictive tools embedded in EHR systems, particularly where automated prompts or defaults could lead to claims for unnecessary services or services never provided. This focus builds on 2025 enforcement actions that targeted EHR systems influencing prescribing behavior and investigations into whether generative technologies facilitated Anti-Kickback Statute violations.

Simultaneously, the government is deploying its own AI capabilities as enforcement tools. The 2025 National Health Care Fraud Takedown, which identified over $14.6 billion in fraud, demonstrates the potential of initiatives like DOJ’s Health Care Fraud Data Fusion Center. Health care organizations are advised to thoroughly document AI use in their systems and implement appropriate guardrails and monitoring protocols.

Beyond health care, the DOJ’s Civil Rights Fraud Initiative is reshaping compliance requirements for all recipients of federal funding. This initiative, paired with the department’s July guidance on unlawful discriminatory practices, operationalizes Executive Order 14173’s mandate to end discrimination and restore merit-based processes in federally funded programs.

Early resolutions with public universities demonstrate the government’s ability to secure corrective action and monetary payments without fully litigating FCA claims. As this initiative matures, analysts expect the DOJ to use civil investigative demands and potentially file FCA complaints against federal fund recipients resisting the administration’s policy directions regarding diversity, equity, and inclusion programs.

In the international trade arena, shifting tariff regulations and trade tensions are fueling an increase in FCA cases targeting customs violations. The DOJ’s intervention in a complaint against an apparel importer—alleging dual-invoice undervaluation schemes—exemplifies this trend, alongside several multi-million-dollar settlements for tariff evasion, falsified invoicing, and origin misstatements.

A significant legal development supporting this enforcement push came with the U.S. Court of Appeals for the Ninth Circuit’s decision in Island Industries v. Sigma, which affirmed that FCA liability can coexist with traditional customs enforcement mechanisms, effectively expanding the government’s recovery options for duty evasion.

The cross-agency Trade Fraud Task Force, combined with Customs and Border Protection’s increasing use of AI to detect illicit transshipment, further strengthens federal oversight capabilities. Importers face growing scrutiny around valuation, tariff classification, country-of-origin declarations, and supply chain representations.

Finally, private equity investors and sponsors should prepare for expanded accountability for portfolio company FCA violations in 2026. This trend is particularly pronounced in health care, where investors often influence operations and compliance spending decisions. Liability theories range from causing false claims to derivative exposure in qui tam retaliation cases.

While private equity owners have successfully defended certain retaliation claims, the risk trend points toward closer examination of governance mechanisms, board oversight, acquisition diligence, and integration practices affecting billing and regulatory compliance. Experts recommend that investors document proactive oversight through rigorous pre-acquisition diligence, independent compliance functions, and clear escalation protocols.