Eye Opening: DOJ Issues First Healthcare Fraud Declination Under New Corporate Enforcement Policy

The U.S. Department of Justice’s (DOJ) new Corporate Enforcement Policy (CEP) is coming into sharper focus. On July 29, 2026, DOJ announced that it had declined to prosecute Campus Eye Management Holdings LLC and its wholly owned subsidiary (Campus Eye) for alleged healthcare fraud and kickback schemes. This is the first declination for a healthcare company under the CEP and illustrates the concrete benefits available to companies that promptly self-disclose misconduct, cooperate meaningfully, and strengthen their compliance programs. DOJ paired the declination with criminal charges against Campus Eye’s founder and former CEO, signaling that individual accountability remains a priority even when the company earns a declination. Below, we examine the alleged fraud and kickback schemes, the declination, and the implications of DOJ’s announcement.

The Alleged Schemes

According to DOJ’s declination letter, outside investors formed Campus Eye in December 2021 when they acquired an optometry practice and affiliated surgery center that E. Bruce DiDonato had founded. DiDonato remained the practice’s owner and president and, until March 2023, also served as CEO of both Campus Eye entities. As alleged in the indictment, DiDonato caused Campus Eye to bill Medicare and other insurers for diagnostic eye tests that were duplicative or medically unnecessary. According to DOJ, none of DiDonato, the performing optometrist, or the referring ophthalmologists reviewed or relied on the tests.

The indictment also alleges that DiDonato caused the practice to pay kickbacks and bribes to the referring ophthalmologists. DiDonato allegedly concealed the kickbacks through sham consulting agreements and monthly “flat fees” pegged to the practice’s Medicare reimbursements for the patients those ophthalmologists referred.

The indictment alleges that the conduct continued after the 2021 acquisition until March 2023. DOJ estimates the resulting loss to Medicare and other insurers at $3.7 million.

Campus Eye’s Declination and DiDonato’s Prosecution

Despite the seriousness of the alleged offenses, DOJ declined to prosecute Campus Eye under the CEP, citing Campus Eye’s (1) timely and voluntary self-disclosure; (2) proactive cooperation, presumably including cooperation against DiDonato; (3) remediation, including revised billing, payment, and compensation policies and implementation of an enhanced compliance program; and (4) compensation to the victim insurers. DOJ also reduced Campus Eye’s compensation obligation, based on inability to pay. Although the alleged scheme generated nearly $4 million, a forensic accountant retained by DOJ found that disgorging more than $1 million would threaten Campus Eye’s “continued viability,” so DOJ capped the payment at $1 million, due within 90 days.

On the same day it announced Campus Eye’s declination, DOJ unsealed a seven-count indictment charging DiDonato with separate counts of conspiracy to commit healthcare fraud and conspiracy to violate the Anti-Kickback Statute, as well as substantive counts of healthcare fraud and paying kickbacks.

Focus on Future Enforcement

The Campus Eye declination reinforces the message DOJ delivered when it announced the CEP in March 2026: companies that identify misconduct early, self-disclose to the government voluntarily, assist investigators, compensate victims, and meaningfully remediate may earn a path to declination — even in a significant healthcare fraud investigation. But the timing and quality of cooperation remain critical. Companies seeking similar treatment should be prepared to help DOJ assess both the scope of the conduct and the individuals responsible. Remediation, too, must be concrete and must address the compliance failures the company identified: companies should be prepared to show not only that the misconduct has stopped, but also that they have addressed the weaknesses that allowed it.

The case also serves as a reminder that protection for the company does not extend to its executives. DOJ unsealed the DiDonato indictment the same day it resolved the corporate investigation. Self-disclosure that earns the entity a declination can simultaneously hand the government a roadmap to the culpable individuals — a dynamic on display here. Companies and their officers may have divergent interests, and counsel should account for those conflicts and for potential privilege issues early in any decision to self-disclose.

The resolution and related prosecution also reflect continued coordination across DOJ. Prosecutors from the National Fraud Enforcement Division, the Criminal Division’s Fraud Section, and the U.S. Attorney’s Office for the District of New Jersey are handling DiDonato’s prosecution, while the Corporate Enforcement Section assisted with the declination. DOJ also placed the action within its broader Health Care Fraud Strike Force Program, which currently includes nine strike forces operating in federal districts nationwide.

We will continue to monitor DOJ’s corporate enforcement policies and priorities here on Enforcement Edge. For questions about this declination, DOJ’s CEP, or its implications, please contact the authors or any member of Arnold & Porter’s White Collar Defense & Investigations or Healthcare Regulatory practice groups.

© Arnold & Porter Kaye Scholer LLP 2026 All Rights Reserved. This Blog post is intended to be a general summary of the law and does not constitute legal advice. You should consult with counsel to determine applicable legal requirements in a specific fact situation.