U.S. Fraud Crackdown Eroding Private Equity’s Liability Shield By Sabrina Willmer | February 23, 2021 Insiders said one company pushed unnecessary pain medication to the U.S. military; another promoted an unproven treatment for children with cancer; and a third used unlicensed counselors to treat poor people with mental illness. In all three cases, taxpayers footed the bill — and, before long, government authorities came looking for the companies’ owners: private equity. Long insulated from legal liabilities at the companies they buy, these investment firms increasingly are being dragged into the mess when their charges get in trouble. A key reason: private equity has pushed into businesses that rely on taxpayer money, in particular, health care.