The Department of Justice's Anti-Fraud Priorities and Their Impact on Businesses and M&A Activity

As we enter 2026, few would have envisioned that the False Claims Act (“FCA”), a Civil War era tool that was used by President Abraham Lincoln to address procurement fraud, would today become one of the “government’s most powerful weapons against fraud”.[1] The Department of Justice (“DOJ”) has made clear the FCA as a priority to address and redress fraud against the government, and businesses as well as their acquirers. In fact, settlements and judgments in fiscal 2025 were record-breaking, with the highest number since the FCA was adopted.

In this new era of False Claims Act enforcement, no business is immune from the DOJ’s reach or radar, and investors should consider the implications of the FCA.[2] Under the FCA’s “qui tam” provision, private individuals (known as “whistleblowers” or “relators”) can file lawsuits on behalf of the federal government alleging other private…

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THE HASHFLARE “CLOUD MINING” PONZI SCHEME (GLOBAL/ESTONIA)

Date: February 13, 2025 (Guilty Pleas) Perpetrators: Sergei Potapenko and Ivan Turogin

Case Description: This $577 million cryptocurrency fraud remains one of the largest digital asset scams in history, with major legal developments concluding in 2025. Potapenko and Turogin operated “Hashflare,” which they marketed as a massive cryptocurrency mining operation. Hundreds of thousands of victims worldwide purchased “mining contracts,” believing they were renting hash power to mine Bitcoin. In reality, the duo was running a sophisticated Ponzi scheme.

They created fake customer dashboards that showed “real-time” mining profits, but the money being paid out was simply the capital of newer investors. They laundered the proceeds through shell companies to purchase luxury real estate and a fleet of high-end vehicles. After a massive international investigation involving the FBI and Estonian authorities, the pair agreed to forfeit over $400 million in assets. This case underscores the “Cyber-enabled Fraud” warning issued by the FATF in early 2026: as technology evolves, the scale of fraud moves from local millions to global billions in the blink of an eye.

Link to Original: ACFE – High Profile Fraud of 2025