On July 29, 2026, the National Fraud Enforcement Division of the U.S. Department of Justice (the “DOJ”) and the United States Attorney’s Office for the District of New Jersey announced the DOJ’s first-ever declination of prosecution for a health care company under Part I of the DOJ’s Corporate Enforcement and Voluntary Self-Disclosure Policy (the “2026 CEP”).[1] Specifically, the DOJ declined to prosecute Campus Eye Management Holdings, LLC and its wholly owned subsidiary, Campus Eye Management, LLC (collectively, “Campus Eye” or the “Campus Eye Entities”), for health care fraud, illegal kickbacks and bribes in violation of the Anti-Kickback Statute, and conspiracy to commit health care fraud and to violate the Anti-Kickback Statute. As we discussed in our prior memorandum on the 2026 CEP,[2] Part I provides that the DOJ “will decline to prosecute a company for criminal conduct” if four requirements are met: (i) the company “voluntarily self-disclosed the misconduct” to an “appropriate” DOJ criminal component; (ii) the company “fully cooperated” with the DOJ’s investigation; (iii) the company “timely and appropriately remediated the misconduct”; and (iv) there are “no aggravating circumstances.”[3] The DOJ conditioned the declination on Campus Eye’s agreement to, among other things, continue cooperating with the DOJ and disgorge $1 million in ill-gotten gains to compensate victims.[4]
Relatedly, the DOJ announced a seven-count indictment against E. Bruce DiDonato, the founder of the underlying optometry practice (the “Practice”) and its affiliated ambulatory surgery center (the “ASC”) that Campus Eye serviced, for his alleged role in orchestrating the diagnostic testing and kickback schemes.[5] The decision not to prosecute Campus Eye while charging DiDonato reflects the 2026 CEP’s stated goal of “[i]ncentivizing corporate self-disclosures—while still permitting prosecutions” of the allegedly culpable individuals.[6] This first-ever declination of a health care company also raises considerations related to liability exposure across companies in the health care space, as well as for private equity investors.
The Alleged Scheme
According to the indictment and DOJ’s press release, from at least 2015 through March 2023, DiDonato conspired with others to defraud Medicare by billing for medically unnecessary diagnostic eye tests and paying illegal kickbacks to induce patient referrals.[7] DiDonato was a licensed optometrist and the founder and an owner of the Practice and the ASC, located in Hamilton, New Jersey. The ASC performed cataract surgery, corneal surgery and YAG capsulotomy.[8] In July 2021, DiDonato and outside investors formed the Campus Eye Entities, designed to provide services to the Practice and the ASC.[9] Campus Eye Management, LLC, a management services organization, agreed to provide management, billing and collection services to the ASC. From December 2021 through March 2023, DiDonato served as sole owner and President of the Practice, CEO of both Campus Eye Entities, President of Campus Eye Management, LLC and a member of the board overseeing the Campus Eye Entities and the ASC.[10]
The Kickbacks. According to the indictment, DiDonato and a co-conspirator paid illegal kickbacks to co-conspirator providers to induce referrals of patients to the Practice.[11] The kickbacks were up to approximately 50% of the total Medicare reimbursement for diagnostic tests performed on patients the co-conspirator providers had referred for surgeries at the ASC, and, with respect to one co-conspirator provider, approximately 50% of the total Medicare reimbursement for cataract surgeries that provider referred to the ASC.[12] To conceal the arrangement, the payments were documented in sham agreements describing them as fair-market-value consulting fees or other services not rendered.[13]
The Fraudulent Medicare Claims. DiDonato and one of the co-conspirators allegedly directed Practice employees to perform the medically unnecessary diagnostic tests on referred patients. Neither DiDonato nor his co-conspirator reviewed the test results. Except in rare instances, the co-conspirator providers likewise did not review or rely on the results. DiDonato and his co-conspirator billed Medicare through the Practice to conceal that many of the tests were duplicative. The indictment alleges that DiDonato and his co-conspirator submitted and caused to be submitted at least $3.4 million in false and fraudulent claims to Medicare.[14]
The Sale to Private Equity. According to the DOJ, DiDonato sold a portion of his ownership interest in the Practice and the ASC to outside private equity investors in 2021, marketing the deal in part by touting the “lucrative reimbursements” received from Medicare.[15] DiDonato and the investors formed the Campus Eye Entities, the management company DiDonato went on to lead, in advance of the investors’ purchase closing in December 2021.[16]
Charges. DiDonato was charged in a seven-count indictment with conspiracy to commit health care fraud, conspiracy to violate the Anti-Kickback Statute, two counts of health care fraud and three counts of payment of illegal health care kickbacks.[17] The charges carry statutory maximums of ten years on each health care fraud count, five years on the kickback conspiracy count and ten years on each substantive kickback count.
Factors Supporting the Declination
According to the DOJ’s press release,[18] the National Fraud Enforcement Division and the United States Attorney’s Office for the District of New Jersey resolved their criminal health care fraud investigation into Campus Eye by declining to prosecute the company pursuant to Part I of the 2026 CEP.[19] The DOJ explained that this decision was based principally on its assessment of the below factors:
- Self-Reporting: The DOJ credited Campus Eye for providing “timely and voluntary self-disclosure of the misconduct,”[20] consistent with the 2026 CEP’s encouragement that disclosure be made at “the earliest possible time, even when a company has not yet completed an internal investigation.”[21] Neither the Declination nor the press releases state how, when, or by whom that disclosure was made or whether Campus Eye had completed an internal investigation before the reporting.[22]
- Cooperation: The DOJ assessed Campus Eye’s cooperation as “full and proactive” and credited, in particular, Campus Eye’s disclosure of facts surrounding the misconduct (including about the individuals involved), its “retrieval and analysis of historical data such as information regarding beneficiaries impacted and insurers who paid relevant claims,” and its “agreement to continue to cooperate with any . . . Government investigations and prosecutions.”[23]
- Nature and Seriousness of the Offense: The Declination stated that the Government’s assessment included consideration of “the nature and seriousness of the offense,” but neither the Declination nor the press releases say more about that consideration.[24]
- Remediation: The DOJ credited Campus Eye for “timely and appropriate remediation,” including Campus Eye’s “internal review and subsequent revision of certain billing, payment, and compensation policies.”[25] The DOJ also cited “substantial improvement” of Campus Eye’s compliance program to prevent future misconduct, including “conducting ongoing risk assessments and monitoring, hiring new personnel with compliance responsibilities, and implementing compliance trainings.”[26]
- Aggravating Circumstances: The Declination specifically noted the “absence of aggravating circumstances.”[27]
- Disgorgement: The DOJ positively noted that Campus Eye agreed to disgorgement of $1 million in the form of victim compensation.[28] Even though the Government and Campus Eye agreed that the approximate amount of ill-gotten gains was $3.7 million, DOJ agreed—after conducting an independent ability-to-pay analysis—that the Campus Eye Entities “met their burden of establishing an inability to pay this full amount” and that “paying a disgorgement amount of greater than $1,000,000 would substantially threaten the continued viability of the Campus [Eye] Entities.”[29]
Like prior DOJ declinations under earlier iterations of the CEP,[30] the Declination leaves the door open for individual prosecution, cautioning the Campus Eye Entities that the resolution does not protect any individuals from enforcement actions.[31]
Key Takeaways
The Campus Eye resolution offers several important lessons for companies navigating potential health care fraud exposure and for those contemplating acquisitions of health care companies:
- The DOJ Continues to Reward Self-Disclosure, Cooperation and Remediation: The result highlights the DOJ’s view that timely self-disclosure, robust cooperation and effective remediation remain among the strongest tools available to companies seeking to avoid criminal health care fraud charges. The Declination here is the first of a health care company under the 2026 CEP and the first by the newly created National Fraud Enforcement Division, but is consistent with the DOJ’s declination decisions under prior iterations of the CEP in which the DOJ declined prosecution on account of sufficient self-reporting and cooperation.[32]
- DOJ’s Focus on Individuals: The declination with respect to Campus Eye but the decision to prosecute DiDonato underscores that the DOJ is using the 2026 CEP consistent with its stated goals of incentivizing corporate cooperation to facilitate the pursuit of criminal charges against culpable individuals.
- Importance of Pre- and Post-Acquisition Diligence: The case underscores the importance of diligence for private equity investors considering health care investments or who have already acquired targets. In particular, the resolution reinforces broader DOJ policy that credits companies that report misconduct they have uncovered following an acquisition.[33]
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[1] U.S. Dep’t of Just., Press Release No. 26-863, Fraud Division Resolves Fraud Investigation of Eye Care Group Under New Corporate Enforcement Policy; Health Care Executive Charged for Alleged Fraud and Kickbacks (July 29, 2026), available here; U.S. Dep’t of Just., Corporate Enforcement and Voluntary Self-Disclosure Policy (Mar. 10, 2026) (the “2026 CEP”), available here.
[2] Paul, Weiss, DOJ Releases “First-Ever” Department-Wide Corporate Enforcement Policy (Mar. 12, 2026), available here.
[3] 2026 CEP at 1–2.
[4] Letter from Colin M. McDonald, Assistant Att’y Gen., Nat’l Fraud Enf’t Div., U.S. Dep’t of Just., and Robert Frazer, U.S. Att’y, Dist. of N.J., to Ben Curtis, Esq. & J. Greer Griffith, Esq., McDermott Will & Emery LLP, Re: Campus Eye Management Holdings, LLC and Campus Eye Management, LLC, at 2–3 (July 28, 2026) (“Campus Eye Declination”), available here.
[5] Indictment, United States v. DiDonato, No. 26-cr-00384 (D.N.J. July 28, 2026), available here; U.S. Dep’t of Just., Press Release No. 26-863, supra note 1.
[6] U.S. Dep’t of Just., Press Release No. 26-230, Department of Justice Releases First-Ever Corporate Enforcement Policy for All Criminal Cases (Mar. 10, 2026), available here.
[7] Indictment, supra note 5; U.S. Dep’t of Just., Press Release No. 26-863, supra note 1.
[8] Indictment, supra note 5.
[9] Campus Eye Declination at 1; U.S. Att’y’s Office, Dist. of N.J., Press Release No. 26-166, Founder and Former CEO of New Jersey Based Eye Care Group Charged with Health Care Fraud Conspiracy and Paying Illegal Kickbacks (July 29, 2026), available here.
[10] Campus Eye Declination at 1.
[11] Indictment, supra note 5.
[12] Id.
[13] Id.
[14] Id.
[15] U.S. Dep’t of Just., Press Release No. 26-863, supra note 1.
[16] Id.; Campus Eye Declination at 1.
[17] Indictment, supra note 5.
[18] U.S. Dep’t of Just., Press Release No. 26-863, supra note 1.
[19] Id.
[20] Campus Eye Declination at 2.
[21] 2026 CEP at App. B.
[22] Campus Eye Declination; U.S. Dep’t of Just., Press Release No. 26-863, supra note 1; U.S. Att’y’s Office, Dist. of N.J., Press Release No. 26-166, supra note 9.
[23] Campus Eye Declination at 2.
[24] Id.; U.S. Dep’t of Just., Press Release No. 26-863, supra note 1; U.S. Att’y’s Office, Dist. of N.J., Press Release No. 26-166, supra note 9.
[25] Campus Eye Declination at 2.
[26] Id. at 2.
[27] Id.
[28] Id.
[29] Id.
[30] Paul, Weiss, DOJ Resolves First Corporate FCPA Case Following Enforcement Pause With Declination to Prosecute Liberty Mutual (Aug. 18, 2025), available here. This earlier DOJ declination “follow[ed] the May 2025 updates to the CEP,” which “[i]n contrast to the prior versions of the CEP, . . . provides that DOJ ‘will decline to prosecute’ companies so long as the [enumerated] criteria are satisfied.” Id. at 1 (quoting U.S. Dep’t of Just., 9–47.120, Criminal Division Corporate Enforcement and Voluntary Self-Disclosure Policy (May 12, 2025), available here) (emphasis in original); Letter from Lorinda I. Laryea, Acting Chief, Fraud Section, Crim. Div., U.S. Dep’t of Just., to Wifredo A. Ferrer, Michael E. Hantman & Eddie A. Jauregui, Holland & Knight LLP, Re: Liberty Mutual Insurance Company, at 1 (Aug. 7, 2025), available here.
[31] Campus Eye Declination at 3.
[32] See, e.g., Letter from Glenn S. Leon, Chief, Fraud Section, Crim. Div., U.S. Dep’t of Just., to Benjamin D. Singer & Caitlin M. Bair, O’Melveny & Myers LLP, Re: HealthSun Health Plans, Inc. (Oct. 25, 2023), available here.
[33] See generally 2026 CEP; see also id. at 3 & n.7 (referencing the DOJ’s “Merger & Acquisition (M&A) Policy,” which “applies to misconduct uncovered in the context of M&A pre- or post-acquisition due diligence” (citing Justice Manual 9-28.600 and 9-28.900)).
