DOJ Sued for $30M Over Dropped Fraud Charges, Shifts Prosecutorial Power

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The Lawxy Times

Lawxy Times Reporter

1 Jul 2026

DOJ Sued for $30M Over Dropped Fraud Charges, Shifts Prosecutorial Power

The U.S. Department of Justice (DOJ) faces a lawsuit seeking over $30 million in compensatory damages for malicious prosecution. This lawsuit clarifies the limits of prosecutorial power and the consequences of withholding exculpatory evidence. The immediate affected parties are attorneys and individuals targeted by the government for prosecution.

Full News Breakdown

The dispute was triggered by the government's prosecution of Jeremy Schulman for criminal fraud and money laundering, which was ultimately dropped in 2024. The core disagreement centered on the validity of the testimony by an FBI agent and the government's alleged withholding of exculpatory evidence.

Case Name: Not specified
Court: Not specified
Date: 2020 (indictment), 2024 (charges dropped)
Statutes Cited: Not specified
Primary Legal Issue: Malicious prosecution and withholding of exculpatory evidence
Petitioner Arguments: The government based its prosecution on false testimony by an FBI agent and withheld exculpatory evidence.
Respondent Arguments: Not specified
Court Reasoning: Not specified
Holding: Not specified
Operative Order: Not specified
Practical Outcome: The charges against Jeremy Schulman were dropped.

How Does This Affect You?

The court's decision resolves the issue of malicious prosecution and the importance of disclosing exculpatory evidence. This shift highlights the need for prosecutors to disclose all relevant evidence. Individuals targeted by the government have recourse for malicious prosecution. The decision creates a compliance obligation for practicing lawyers, law students, and businesses.

For Lawyers & Advocates

Lawyers may wish to be vigilant in seeking exculpatory evidence and challenging potentially false testimony when defending clients against criminal fraud and money laundering charges. Prosecutors may find it useful to review their disclosure procedures to avoid claims of malicious prosecution. The ruling highlights the importance of thorough investigation and disclosure of evidence in criminal cases. Lawyers may consider arguing for the disclosure of exculpatory evidence and challenging the government's withholding of such evidence.

For Law Students

The decision provides an opportunity to examine malicious prosecution and the importance of disclosing exculpatory evidence. The core legal doctrine is the requirement to disclose exculpatory evidence, as established in Brady v. Maryland (1963). The decision is relevant for the study of Criminal Procedure, Federal Courts, and Constitutional Law. A comparison to United States v. Agurs (1976) teaches the importance of the prosecutor's duty to disclose evidence and the consequences of withholding such evidence.

For Businesses

Companies that interact with the government or are subject to criminal prosecution may want to consider reviewing their documentation and disclosure procedures. Businesses may find it useful to take into account the potential implications of prosecution based on false testimony. Companies may review their internal policies and procedures to ensure they are aware of the potential risks and consequences.

Key Takeaways

The government must disclose exculpatory evidence and avoid malicious prosecution. Lawyers may wish to be more diligent in seeking exculpatory evidence and challenging potentially false testimony. Prosecutors may find it useful to review their disclosure procedures to avoid claims of malicious prosecution. Future cases that challenge the government's withholding of exculpatory evidence and the limits of prosecutorial power may affect the development of this area of law. Lawyers defending clients against criminal charges may want to review their cases for potential exculpatory evidence.

References

Source: Lawyer sues DOJ for more than $30M over dropped fraud charges