Alabama: A Litigation: White-Collar Crime & Government Investigations Overview

Government Programs and White-Collar Litigation Trends

In Alabama, enforcement actions by federal prosecutors and the Alabama Securities Exchange Commission (SEC) in collaboration with local district attorney offices is increasing. This is due to enforcement agencies in Alabama collaborating with larger urban enforcement agencies and the United States Department of Justice (DOJ) policies encouraging more self-reporting and/or whistle-blowing activity. The federal and state prosecutors in Alabama have been influenced by successful prosecutions in other jurisdictions in late 2025 and 2026 and are determined to actively investigate and charge healthcare and government program fraud in a very aggressive manner.

For example, Alabama prosecutors are collaborating with federal prosecutors from larger urban offices to investigate and charge bank fraud, wire fraud and other white-collar conspiracies. The Alabama prosecutors are watching how other financial regulators are focused on protecting investors and are consistently trying to be involved in investor protection actions in Alabama. The DOJ has released policies encouraging enforcement actions and/or investigations into healthcare and government programs, in which a surprising number of companies in Alabama are involved. The port in Mobile is estimated to involve over USD98 billion annually while supporting over 350,000 state and federal jobs. Huntsville has the second-most cleared defence contractors in the nation, after only Washington DC. In addition to a focus on healthcare fraud and government program fraud, DOJ policy to hold individual defendants responsible requires that all executives, managers and employees of companies in Alabama have experienced and competent counsel for white-collar and government investigations.

Self-reporting will increase enforcement of healthcare fraud and government program fraud

In 2025, the DOJ promoted policies to increase enforcement actions in white-collar and government investigations, including forming a National Fraud Division. In May 2025, the DOJ published a memorandum entitled “Focus, Fairness, and Efficiency in the Fight Against White-Collar Crime”. As a result, the DOJ also publicised having a record number of qui tam law suits filed by whistle-blowers and FCA investigations. Healthcare fraud in 2025 involved over USD6.5 billion in recoveries by the DOJ for cases and investigations involving medicare fraud, anti-kickback and improper billing. Throughout 2026, the government announced substantial results in healthcare fraud enforcement in its 2026 National Health Care Fraud Takedown report. In June 2026, the DOJ announced how a company in Alabama paid USD300,000 to resolve false claims as part of the 2026 National Health Care Fraud Takedown. According to the DOJ, the takedown “represents a new era in federal, state, and international cooperation to combat healthcare fraud: cases in 56 federal districts and 45 U.S. states and territories, with 50 state Medicaid Fraud Control Units participating, the most in Department history”.

Government program fraud is a priority, which includes enforcement actions regarding government contracting, procurement, assistance programs and compliance programs. Any business with the federal government or obtaining contracts from the federal government present a risk of investigation or prosecution involving concerns of fraud. Fraud can also include concerns that a company has failed to meet certain compliance standards or contractual requirements for the government. For example, the government is increasing enforcement actions for any failure to satisfy data security requirements. Data security fraud or cyberfraud is an area that will likely see increased enforcement from 2026 to 2027. The DOJ has publicised active investigations and prosecutions of dishonest tax preparers. In 2026, tax preparers that helped prepare client applications for government programs, like a federal energy-credit program or the Paycheck Protection Program (PPP) loan, were identified, investigated and incarcerated by the DOJ. For instance, the DOJ announced in August 2026, charging a tax preparer in Alabama for government program fraud involving more than USD65 million and involved the National Fraud Enforcement Division, the Criminal Division’s Tax Section and a US Attorney’s Office. As the statute of limitations for PPP loan fraud prosecutions is ten years, the government is expected to continue investigating and prosecuting government program fraud involving PPP loans. In Alabama, state and federal prosecutors are collaborating to investigate and charge wire fraud, theft by deception, aggravated identity theft and tax evasion for conduct involving fraudulent government loan applications. Larger urban offices may have higher guidelines, but Alabama prosecutors are pursuing investigations and charging felony offences for government loan applications involving less than USD40,000. The federal prosecutors may publicise the larger government loan fraud cases that involve millions of dollars or more than USD600,000, but anyone that obtained a government loan under any false representations could be investigated and prosecuted in Alabama. In addition, securities fraud charges can be filed in Alabama state courts, even when no federal charges are pursued and after a civil resolution with investors has been signed in civil court. The Alabama SEC is willing to collaborate with local prosecutors to bring securities fraud charges against company executives on allegations that an executive used company funds for their personal benefit. For example, an Alabama executive was prosecuted and sentenced to two years in prison for allegedly embezzling over USD200,000 from their employer.

The DOJ has consistently publicised its policies and procedures to encourage self-disclosure of any illegal activity. The DOJ has official programs that lay out a structured framework through which companies may self-report financial misconduct that could result in no charges or substantially less consequences to the company. Attorneys for companies in Alabama have made sure, or will make sure, the senior leadership of companies are aware of the benefit of implementing policies and procedures to increase a company’s ability to comply with the self-disclosure programs. As attorneys provide additional awareness of the self-disclosure programs, more companies that become aware of any risk of fraud involving any government contract or program will be self-reporting in an effort to meet the compliance requirements of the self-disclosure programs to ensure that the company is not ultimately charged with any criminal offences. Similarly to the 5K/3553(e) substantial assistance analysis for post-indictment conduct, white-collar and government investigations lawyers should anticipate the benefit or potential benefit by their client being the first to contact the government. If first contact is material to the prosecutor’s assessment of who gets to be a witness or who gets charged, then there is an obvious concern that companies, executives and employees have competent counsel early to assist in making the strategic decisions on when to self-report or become a whistle-blower. As attorneys increase awareness to employees of companies and as attorneys increasingly see the benefits to their clients self-reporting early, self-reporting will ultimately increase enforcement of healthcare and government program fraud. 

Conclusion

Alabama will likely see an increase in enforcement actions by federal prosecutors and the Alabama Securities Exchange Commission in collaboration with local district attorney offices for healthcare and government program fraud, because enforcement agencies in Alabama are collaborating with larger urban enforcement agencies and the DOJ policies will encourage more self-reporting and whistle-blowing activity. The federal and state prosecutors in Alabama have been influenced by successful prosecutions in other jurisdictions in late 2025 and 2026 and are determined to actively investigate and charge healthcare and government program fraud in a very aggressive manner. The DOJ’s focus on healthcare and government program fraud requires that all executives, managers and employees of companies in Alabama have experienced and competent counsel for white-collar and government investigations.