DOJ’s Fraud Division Launches Fast-Track Whistleblower Awards, With a Focus on Health Care Fraud

The U.S. Department of Justice (DOJ) has launched a new whistleblower incentive program designed to accelerate fraud investigations by offering cash awards of $10,000 to $30,000 for tips that lead to criminal charges. Announced on October 20, 2026, the Fraud Whistleblower Incentive Program (WHIP) departs from traditional whistleblower programs by providing awards when criminal charges are filed, rather than waiting for the final resolution of a case. The Program targets federal health care offenses, related crimes, and fraud involving government programs and benefits administered by eight federal agencies.

The new Program reinforces DOJ’s emphasis on health care fraud enforcement. It follows the National Fraud Enforcement Division’s recent directive identifying health care fraud as its top enforcement priority, as well as a joint voluntary self-disclosure policy with the Department of Health and Human Services Office of Inspector General (HHS-OIG). Together, these initiatives suggest a coordinated approach to investigating and prosecuting fraud involving federal health care programs.

By rewarding whistleblowers at an earlier stage of criminal proceedings, DOJ is creating greater incentives for individuals to report suspected misconduct directly to the federal government. Click here to read the full post.

DOJ and HHS Launch Healthcare FCA Self-Disclosure Pilot Program with Fixed Repayment Multiplier

On October 22, 2026, the Department of Justice (“DOJ”) Civil Division and the Department of Health and Human Services (“HHS”) announced a six-month Healthcare False Claims Act Self-Disclosure Pilot Program (“FCA SDPP”). The program offers healthcare companies a defined path to resolve potential FCA violations the government does not yet know about, in exchange for a “coordinated civil release” and a repayment within a set multiplier range. DOJ says the goal is to free up government resources to focus on “recalcitrant actors.”

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DOJ Fraud Division and HHS-OIG Announce Joint Self-Disclosure Policy, Directing Healthcare Companies to Bring Potential Criminal Matters to DOJ First

On October 15, 2026, the Department of Justice’s National Fraud Enforcement Division (“NFED”) and the Department of Health and Human Services Office of Inspector General (“HHS-OIG”) announced a joint policy (the “Policy”) directing companies seeking to self-disclose potential criminal healthcare matters to NFED’s Health Care Fraud Section. The Policy promises companies deemed to have made good faith, voluntary self-disclosures credit under both DOJ’s Corporate Enforcement and Voluntary Self-Disclosure Policy (CEP) and HHS-OIG’s Self-Disclosure Protocol. It arrives two weeks after the Fraud Division issued Directive 26-12, Corporate Enforcement in the Fight Against Fraud (the “Directive”), in which NFED identified healthcare fraud as its top priority.  You can read more about the Directive here.

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DOJ’s Fraud Division Directs Broader Charging Strategies and Earlier Asset Seizures in New Memorandum

The U.S. Department of Justice’s (DOJ) National Fraud Enforcement Division has issued a new directive calling for more aggressive fraud investigations and prosecutions, including broader charging strategies, earlier asset seizures, and increased use of cooperating witnesses. Released on October 8, 2026, Directive 26-13 builds on the Division’s recently announced enforcement priorities and provides prosecutors with specific instructions for pursuing fraud cases.

The Directive instructs prosecutors to consider tax, securities, and consumer fraud charges alongside traditional fraud offenses, while emphasizing the use of asset freezes, forfeiture proceedings, and other measures to disrupt suspected misconduct before criminal charges are filed. It also encourages proactive investigations through data analysis, cooperating insiders, and undercover operations, and directs prosecutors to seek stronger sentences where warranted.

Although the Directive does not create new criminal offenses or expand DOJ’s existing authority, it signals a more coordinated and aggressive approach to fraud enforcement. Companies operating in priority sectors, including health care, government contracting, and trade, should assess potential exposure across multiple legal regimes, prepare for enforcement actions that could disrupt operations before indictment, and evaluate credible allegations promptly, particularly where voluntary self-disclosure may be an option. Click here for the full post.

OFAC’s Pegasus Settlement: Lessons for Logistics Providers on Screening and Subpoena Responses

On October 9, 2026, the U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC) announced a $175,015 settlement with California-based freight forwarder Pegasus Worldwide Logistics (Pegasus) for apparent violations of U.S. counter-narcotics sanctions and OFAC reporting requirements. The enforcement action arose from Pegasus’s involvement in shipping a $5,950 machine supplied by a sanctioned Chinese company that had changed its name following its designation. Despite the relatively modest transaction value, OFAC imposed a substantial penalty, citing deficiencies in Pegasus’s sanctions screening, failure to investigate red flags, and incomplete response to an administrative subpoena.

OFAC found that Pegasus failed to conduct sanctions screening at the outset of the transaction and subsequently screened only the supplier’s new name, overlooking email and telephone information that would have identified the company as a sanctioned party. Pegasus also continued processing payments after receiving a U.S. Customs and Border Protection detention notice referencing OFAC. Compounding these failures, Pegasus initially certified that it had no documents responsive to an OFAC subpoena, only to produce responsive records months later. OFAC treated the incomplete response as a separate basis for liability and an aggravating factor in calculating the settlement.

The action underscores OFAC’s heightened compliance expectations for logistics companies and other intermediaries, regardless of their size or the value of the underlying transaction. It also highlights the importance of screening all available identifying information before engaging in transactions, promptly escalating sanctions-related red flags, and ensuring complete and accurate responses to government inquiries. OFAC further emphasized the availability of financial incentives for sanctions whistleblowers, reinforcing the importance of effective internal reporting and escalation procedures. Click here for the full post.

SFC Enforcement Reinforces Approach To Due Diligence on Third-Party Systems, Client Transaction Monitoring, AML Liability

The Hong Kong Securities and Futures Commission (SFC) has reprimanded Zheng Da International Financial Holding Limited and imposed a HK$7 million fine for failures involving anti-money laundering (AML) controls, client due diligence, and trading surveillance. The SFC also suspended one of the firm’s responsible officers for seven months, underscoring its continued focus on compliance controls and senior management accountability.

The SFC found that Zheng Da failed to conduct adequate due diligence on customer-supplied trading systems used to execute more than 10 million futures trades, investigate substantial client deposits inconsistent with customers’ financial profiles, and detect potentially suspicious trading activity. The firm had also disabled a trading surveillance function because it interfered with normal client trading. The SFC further found that Zheng Da could not produce contemporaneous records supporting its claims that certain compliance checks had been performed.

The action reinforces several recurring SFC enforcement themes: compliance policies must be effectively implemented, firms must maintain records demonstrating adherence to those policies, and reliance on third-party technology providers does not relieve intermediaries of their regulatory obligations. Notably, the SFC treated Zheng Da’s failure to respond to earlier enforcement actions involving similar misconduct as an aggravating factor, highlighting the importance of monitoring regulatory developments and assessing their implications for existing compliance programs. Click here to read the full post.

Sidley Named a Finalist for “Most Impressive Global Investigations Practice of the Year” at the 2026 GIR Awards

Sidley has been named a finalist for the “Most Impressive Global Investigations Practice of the Year” at the Global Investigations Review (GIR) Awards 2026 — one of the most prestigious honors in the global investigations and white collar defense community. The annual awards recognize firms that have demonstrated exceptional skill in navigating high-profile and complex investigations over the past year.

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SEC Division of Examinations Issues Exam Handbook

On October 1, 2026, the SEC’s Division of Examinations published a new SEC Exam Handbook: A Practical Guide on Process and Engagement, replacing the brochure that has long accompanied examination notices. Although the Handbook largely memorializes existing practice, it provides new detail on how examinations are opened, conducted, and closed—and on the circumstances in which examination findings may lead to enforcement scrutiny.

Among other things, the Handbook confirms that examination staff may refer issues to the SEC’s Division of Enforcement, other regulators, or criminal authorities, and in some circumstances may do so before an exit conference or deficiency letter. It also emphasizes that prompt remediation may mitigate whether a finding is referred to Enforcement, while encouraging registrants to address misunderstandings and compliance concerns with examination staff as they arise.

The Handbook does not announce a new enforcement policy, but it puts in writing several features of the examination process that can matter when an exam begins to take on an enforcement dimension. For registrants, the publication offers a useful roadmap for managing that risk—from responding to information requests and preserving privilege to addressing potential deficiencies before they become referral issues. Click here to read the full post.

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<a target=‘_blank’ href="https://www.sidley.com/en/people/a/axel-douglas-a">Douglas A. Axel</a>

Douglas A. Axel

Los Angeles
<a target=‘_blank’ href="https://www.sidley.com/en/people/l/loughnane-joan-m">Joan M. Loughnane</a>

Joan M. Loughnane

New York
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Kenneth A. Polite Jr.

Washington, D.C., New York
<a target=‘_blank’ href="https://www.sidley.com/en/people/t/tham-yuet-ming">Yuet Ming Tham</a>

Yuet Ming Tham

Singapore, Hong Kong
<a target=‘_blank’ href="https://www.sidley.com/en/people/a/anderson-dave">Dave Anderson</a>

Dave Anderson

San Francisco
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Sheila A.G. Armbrust

San Francisco
<a target=‘_blank’ href="https://www.sidley.com/en/people/c/cooper-ellyce-r">Ellyce R. Cooper</a>

Ellyce R. Cooper

Century City
<a target=‘_blank’ href="https://www.sidley.com/en/people/c/craig-daniel-c">Daniel C. Craig</a>

Daniel C. Craig

Chicago
<a target=‘_blank’ href="https://www.sidley.com/en/people/d/daugherty-alexandria">Alexandria Daugherty</a>

Alexandria Daugherty

Los Angeles
<a target=‘_blank’ href="https://www.sidley.com/en/people/d/dukin-craig-francis">Craig Francis Dukin</a>

Craig Francis Dukin

Washington, D.C.

<a target=‘_blank’ href="https://www.sidley.com/en/people/g/george-sara">Sara George</a>

Sara George

London
<a target=‘_blank’ href="https://www.sidley.com/en/people/h/ho-shu-min">Shu Min Ho</a>

Shu Min Ho

Singapore
<a target=‘_blank’ href="https://www.sidley.com/en/people/i/igra-naomi-a">Naomi A. Igra</a>

Naomi A. Igra

San Francisco
<a target=‘_blank’ href="https://www.sidley.com/en/people/k/koehler-kristin-graham">Kristin Graham Koehler</a>

Kristin Graham Koehler

Washington, D.C.
<a target=‘_blank’ href="https://www.sidley.com/en/people/l/lassar-scott-r">Scott R. Lassar</a>

Scott R. Lassar

Chicago
<a target=‘_blank’ href="https://www.sidley.com/en/people/l/levy-michael-a">Michael A. Levy</a>

Michael A. Levy

New York
<a target=‘_blank’ href="https://www.sidley.com/en/people/m/malhotra-geeta">Geeta Malhotra</a>

Geeta Malhotra

Chicago
<a target=‘_blank’ href="https://www.sidley.com/en/people/m/mann-michael-d">Michael D. Mann</a>

Michael D. Mann

New York
<a target=‘_blank’ href="https://www.sidley.com/en/people/m/mcginley-ian">Ian McGinley</a>

Ian McGinley

New York
<a target=‘_blank’ href="https://www.sidley.com/en/people/m/miller-lisa-h">Lisa H. Miller</a>

Lisa H. Miller

Washington, D.C.
<a target=‘_blank’ href="https://www.sidley.com/en/people/m/mirabella-julia-g">Julia G. Mirabella</a>

Julia G. Mirabella

Washington, D.C.
<a target=‘_blank’ href="https://www.sidley.com/en/people/o/ono-takayuki">Takayuki Ono</a>

Takayuki Ono

Chicago, Tokyo
<a target=‘_blank’ href="https://www.sidley.com/en/people/p/poletto-alexa">Alexa Poletto</a>

Alexa Poletto

New York
<a target=‘_blank’ href="https://www.sidley.com/en/people/p/popp-karen-a">Karen A. Popp</a>

Karen A. Popp

Washington, D.C.
<a target=‘_blank’ href="https://www.sidley.com/en/people/p/pruitt-jacqueline">Jacqueline Pruitt</a>

Jacqueline Pruitt

Chicago
<a target=‘_blank’ href="https://www.sidley.com/en/people/r/rachal-doreen-m">Doreen M. Rachal</a>

Doreen M. Rachal

New York, Boston
<a target=‘_blank’ href="https://www.sidley.com/en/people/r/rubino-kevin-r">Kevin Rubino</a>

Kevin Rubino

San Francisco
<a target=‘_blank’ href="https://www.sidley.com/en/people/s/shubert-leslie-a">Leslie A. Shubert</a>

Leslie A. Shubert

Washington, D.C.
<a target=‘_blank’ href="https://www.sidley.com/en/people/s/silva-david-a">David A. Silva</a>

David A. Silva

Singapore
<a target=‘_blank’ href="https://www.sidley.com/en/people/t/tagliaferri-michele">Michele Tagliaferri</a>

Michele Tagliaferri

Brussels
<a target=‘_blank’ href="https://www.sidley.com/en/people/v/volpe-frank-r">Frank R. Volpe</a>

Frank R. Volpe

Washington, D.C.
<a target=‘_blank’ href="https://www.sidley.com/en/people/w/west-marisa-s">Marisa S. West</a>

Marisa S. West

Washington, D.C.
<a target=‘_blank’ href="https://www.sidley.com/en/people/x/xenakis-angela-m">Angela M. Xenakis</a>

Angela M. Xenakis

Washington, D.C.

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