On July 29, 2026, the U.S. Department of Justice announced the National Fraud Enforcement Division’s (“NFED”) first declination under Part I of the DOJ’s revised Corporate Enforcement and Voluntary Self-Disclosure Policy (“CEP”). The NFED declined to prosecute Campus Eye Management Holdings, LLC and its wholly-owned subsidiary, Campus Eye Management, LLC for potential violations of the health care fraud statute, 18 U.S.C. § 1347, the Anti-Kickback Statute, 42 U.S.C. § 1320a-7b, and conspiracy statutes, 18 U.S.C. §§ 371, 1349. According to the declination, Campus Eye was allegedly involved in a kickback and health care fraud scheme in which Medicare and other insurers remitted over $3.7 million for duplicative and medically unnecessary diagnostic tests.

Consistent with DOJ’s revised Department-wide CEP, announced in March 2026 and described in a March S&C client memo, Campus Eye earned a declination based on a number of the CEP factors, including: (1) timely and voluntary self-disclosure of the misconduct; (2) full and proactive cooperation; (3) the nature and seriousness of the offense; (4) timely and appropriate remediation; (5) absence of aggravating factors; and (6) agreement to disgorge ill-gotten gains and compensate victims. Notably, Campus Eye earned the declination while DOJ separately pursued charges against an individual based on allegations that overlap with the facts referenced in the declination letter.

This is the NFED’s first declination under the new CEP and the Department’s third, following the Criminal Division’s Fraud Section’s March 19, 2026 declination regarding Balt SAS and the National Security Division’s June 17, 2026 declination regarding Robert Bosch GmbH. The Campus Eye declination further affirms the Department-wide scope of the revised CEP, demonstrates potential benefits under the CEP for companies that voluntarily self-disclose, investigate, cooperate, and remediate, and underscores that fraud involving taxpayer-funded initiatives, including health care programs, remains a target of the new NFED.

Key Aspects of the Declination

Background

According to the declination and its companion press release, E. Bruce DiDonato founded an optometry practice and companion eye-surgery center. Through those businesses, he developed schemes (i) to bill Medicare and other insurers for duplicative and medically unnecessary diagnostic tests to be conducted at his optometry practice in connection with surgeries at his eye-surgery center, and (ii) to offer and pay illegal kickbacks in exchange for referrals of patients on whom those unnecessary tests were performed.

In 2021, DiDonato and outside investors formed Campus Eye Management Holdings, LLC (the “Parent”), and Campus Eye Management, LLC (the “Subsidiary”). The Subsidiary then entered into a long-term business support services agreement with DiDonato’s optometry practice, pursuant to which it provided support services and other back-office services. Similarly, the Subsidiary entered a management agreement with, and acquired an ownership interest in, DiDonato’s eye-surgery center. According to the NFED, from December 2021 through March 2023—when DiDonato was the sole owner of the optometry practice, CEO of the two Campus Eye entities, and a Board member who oversaw the Campus Eye entities and the eye-surgery center—he allegedly caused the Subsidiary to submit fraudulent claims to Medicare and other insurers for medical services performed by the optometry practice. He also allegedly caused his optometry practice to pay kickbacks for referrals of patients who needed eye surgery, and then performed duplicative or unnecessary eye tests related to their surgeries. According to legal filings in separate Delaware Chancery Court litigation filed by the Parent in February 2024 in connection with a corporate law dispute, DiDonato was terminated for cause as CEO of the Subsidiary in March 2023, in part because of alleged health care fraud, a kickback scheme, and self-dealing. At some point, Campus Eye uncovered the fraud schemes and voluntarily self-disclosed, remediated, and cooperated with the Department.

CEP Factors

According to the declination, Campus Eye discovered the potential violations and took steps consistent with the CEP, including the following:

Timely and Voluntary Self-Disclosure. The declination repeatedly cited Campus Eye’s timely and voluntary self-disclosure of the misconduct, which is a threshold consideration under the CEP.

Full and Proactive Cooperation. The declination described Campus Eye’s full and proactive cooperation. That cooperation involved, for example, providing all known relevant facts about the misconduct, including information about the individuals involved, and access to and analysis of legacy data regarding impacted beneficiaries and insurer payouts. Campus Eye also agreed to continue to cooperate with the Department’s ongoing investigation and any future investigations resulting from the fraud.

Timely and Appropriate Remediation. Campus Eye also conducted an internal review and made subsequent revisions to its billing, payment, and compensation policies. Campus Eye also made “substantial improvement” to its compliance program by conducting ongoing risk assessments and monitoring, hiring new compliance-related personnel, and implementing compliance trainings.

Disgorgement. Campus Eye agreed to disgorge ill-gotten gains and to compensate victims. Although Campus Eye and the NFED agreed that the approximate amount of fraud remitted to the optometry practice was $3.7 million, the parties also agreed that Campus Eye had established an inability to pay this full amount of disgorgement. The declination explained the NFED conducted an “independent ability to pay” analysis with the help of a forensic accounting expert and in accordance with the Justice Department’s Inability to Pay Guidance. The NFED concluded that a disgorgement amount above $1 million would “substantially threaten” the ongoing viability of Campus Eye. As a result, the parties agreed that Campus Eye would disgorge that maximum $1 million figure in victim compensation.

Nature and Seriousness of Offense and Absence of Aggravating Factors. The declination also cited, without description, both (i) the nature and seriousness of the offense and (ii) the absence of aggravating circumstances.

Implications

First, the Campus Eye declination demonstrates real benefits under the CEP for companies that commit to early and voluntary self-disclosure, full cooperation, and remediation. The Department’s willingness to decline prosecution for conduct spanning nearly eight years and involving core health care fraud violations suggests that the Department-wide CEP may provide a true declination presumption in appropriate cases where the enumerated CEP factors are met. In contrast to Campus Eye’s declination, the Department charged DiDonato with conspiracy to commit health care fraud, conspiracy to violate the Anti-Kickback Statute, health care fraud, and payment of illegal health care kickbacks.

Second, this is the first resolution in the NFED’s short tenure to result in a declination and shows that the NFED, like other Divisions, will apply the CEP. The NFED was officially announced less than four months ago, on April 7, 2026, by Acting U.S. Attorney General Todd Blanche, and was designed to “zealously investigate and prosecute those who steal or fraudulently misuse taxpayer dollars.” The NFED quickly revealed a focus on health care fraud. By the end of April, the NFED had launched a “West Coast Health Care Strike Force” to target health care fraud schemes. And last month, NFED Assistant Attorney General Colin M. McDonald stated that “[w]e are aggressively scaling our offensive against anyone using health care as a front to steal from the American people.” The NFED’s Campus Eye declination confirms the broad application of the Department-wide CEP to the health care space and the NFED’s focus on fraud involving taxpayer funds.

Third, financial constraints are a legitimate and negotiable component of the CEP calculus. While the CEP considers a company’s willingness to provide disgorgement and restitution where appropriate, this declination demonstrates that ability-to-pay constraints do not eliminate the possibility of earning a declination under the revised CEP.

This post is based on a Sullivan & Cromwell LLP memorandum, “DOJ Issues First National Fraud Enforcement Division Declination Under Department-Wide Corporate Enforcement Policy,” dated July 31, 2026, and available here.