DOJ Cryptocurrency Enforcement Memo: Shifting Priorities and Protecting “Retail Investors”

On April 7, 2025, the Department of Justice (DOJ) released a memo that highlights its priorities in cryptocurrency investigations and cases. Under the new guidance, DOJ will focus its resources on cases involving clear victimization of retail investors, such as investment frauds, hacks, rug pulls, and smart-contract exploitation. On the flip side, it will not devote resources to investigating cryptocurrency exchanges for criminal offenses that are regulatory in nature.

DOJ’s Goal: Protecting Retail Investors

One of the most significant takeaways from the 2025 DOJ cryptocurrency enforcement memo is the Department’s clear prioritization of cases involving retail investor harm. DOJ will focus on investigating and prosecuting:

• Hacks of cryptocurrency exchanges or wallets,

• Fraudulent investment schemes and rug pulls,

• Exploitation of vulnerabilities in smart contracts to steal digital assets, and

• Criminal conduct involving theft, fraud, or market manipulation directly harming individual investors.

This tact from DOJ mirrors recent moves at other agencies, including the SEC, to reorient enforcement away from regulatory technicalities and toward misconduct that results in financial losses for individuals.

Low Priority Investigations: “Regulatory” Offenses

DOJ also discouraged prosecutors from investigating and charging seemingly regulatory infractions in the crypto space, including:

• Investigations of exchanges, mixing services, and tumblers for violations of 18 U.S.C. § 1960 (unlicensed money transmitting) or Bank Secrecy Act (BSA) obligations, unless other criminal conduct is involved.

• Technical licensing failures or registration lapses, absent deliberate criminal intent and victimization.

DOJ's Neutrality on Whether Tokens Are Securities or Commodities

DOJ also instructed prosecutors to avoid inserting DOJ in the debate of whether whether a digital asset is a "security" or "commodity." Under the new memo:

• DOJ prosecutors should not bring charges that require litigation over a token’s classification under the Securities Act or Commodity Exchange Act.

• Title 15 offenses, including offenses for securities fraud, market manipulation or both, will generally not be pursued unless there is clear, provable fraud resulting in victim harm.

• Instead, DOJ will instead prioritize traditional white-collar offenses, including wire fraud, money laundering, and other offenses under Title 18 that do not require any proof that a token is a security or a commodity.

Will DOJ Follow Through on Cryptocurrency Enforcement Changes?

The practical impact of this guidance remains to be seen. DOJ claims it wants to pursue cases the victimize retail investors. As with any policy shift, the "proof will be in the pudding" as new cases are filed—or declined—in the coming months. Industry participants should monitor enforcement trends carefully to assess whether DOJ’s shift toward investor-focused prosecutions becomes a reality.

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Scott Armstrong, a former senior supervisor and Assistant Chief at DOJ’s Fraud Section in DC, represents clients facing government investigations and allegations of impropriety in the cryptocurrency market. At McGovern Weems, Scott draws on his trial experience in cryptocurrency cases to offer strategic defense to individuals in all corners of the cryptocurrency market. If you are involved in a government investigation relating to cryptocurrency fraud, reach out to Scott Armstrong.

False Claims Act (FCA) Update: DOJ Files Suit for Wound Care Fraud

The Department of Justice recently filed a complaint under the False Claims Act against entities and physicians for alleged fraud in connection with claims to Medicare for wound care treatment. DOJ alleged in the complaint a widespread scheme to overbill Medicare for medically unnecessary and upcoding for wound care services. The case reflects DOJ’s ongoing commitment to enforcing the False Claims Act in the healthcare industry, particularly in cases involving improper billing practices and fraud against federal healthcare programs, like Medicare.

Filed in the Southern District of Florida, the FCA complaint alleges a scheme to submit claims for wound care services over a roughly eight-year period. The services, according to the complaint, were either medically unnecessary, reflected upcoding or both.

Key allegations in the complaint

At the core of the False Claims Act wound care case are four primary allegations:

1. Upcoding Procedures:
   Vohra physicians allegedly performed wound care services but fraudulently billed them as more intensive and higher-reimbursed surgical excisional debridements. This practice, known as upcoding, resulted in millions of dollars of improper payments from Medicare.

2. Falsification of Medical Records:
   The complaint alleges how the entities Electronic Medical Record (EMR) system automatically generated fabricated procedure notes. Physicians had limited ability to document true clinical details, and the EMR inserted pre-populated language suggesting surgical procedures had been performed, even when they had not.

3. Internal Pressure to Inflate Billing:
   The entities allegedly set aggressive corporate targets that required physicians to perform high numbers of surgical debridements, regardless of medical necessity. Physicians who failed to meet quotas faced disciplinary action, while those who exceeded the quotas were financially rewarded.

4. Extraordinary Medicare Reimbursements:
   From 2019 to 2023 alone, the charged entities allegedly collected over $300 million in paid claims from Medicare tied to this alleged scheme.

DOJ will continue to use FCA cases to protect federal programs

DOJ’s complaint seeks treble damages and civil penalties under the False Claims Act. The prospect of treble damages after trial is one of the most powerful tools in combating healthcare fraud.

DOJ reiterated how this case reflects its efforts to protect Medicare’s financial integrity and hold healthcare providers accountable for putting profit over patients. DOJ also stressed that fraudulent-billing practices, like upcoding, drains resources intended for the nation’s seniors and other vulnerable populations.

Key takeaways from the wound care complaint

The wound care complaint highlights several relevant issues for healthcare enforcement going forward:

Technology Misuse

The FCA complaint emphasized that the at-issue EMR system was intentionally programmed to maximize billing and create misleading medical records. This allegation shows DOJ’s increasing scrutiny of how technology platforms can be used to facilitate fraud.

Pressure-Driven Misconduct

The FCA complaint’s allegations about high-pressure tactics—such as setting revenue-based quotas for medical procedures—can be a critical piece of evidence in an enforcement action. DOJ alleged that the entities’ corporate culture was a key contributor to the alleged fraudulent claims submitted to Medicare.

High-Dollar Cases

With over $300 million in allegedly false claims to Medicare, this case represents DOJ’s ongoing efforts to charge high-impact cases.

Going forward

This complaint will bring more attention to the practices of wound care clinics and physicians. Be on the lookout for “copy cat” or similar cases from DOJ, both in the civil and criminal context.

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Scott Armstrong, a former Assistant Chief at DOJ’s Fraud Section, defends physicians, owners in executives in healthcare fraud cases around the country. Email Scott Armstrong to learn how to learn how to defend yourself in a healthcare investigation.