Summary
On August 13, 2026, the U.S. Department of Justice’s National Fraud Enforcement Division (the “Fraud Division”) released a memorandum authored by the Division’s head, Assistant Attorney General Colin McDonald, describing the Fraud Division’s new structure, enhanced resources, and enforcement priorities. The memorandum describes the deployment of “considerable resources” to make the Fraud Division “the most sophisticated, innovative, and data-driven white-collar law enforcement component in the world, uniquely positioned to fight fraud at every level.” That investment includes plans to grow the Division to approximately 500 attorneys and staff by late August 2026, with continued “aggressive” expansion projected over the next two years. The memorandum describes the Division’s mission as prosecuting “fraud in the United States, no matter its size or complexity,” and frames the initiative as aiming to restore public confidence in the federal government’s stewardship of taxpayer dollars.
The memorandum also outlines the Division’s five priority areas of focus: (1) public trust and financial integrity, (2) health care, (3) internal revenue, (4) global trade and commerce, and (5) corporate misconduct. Importantly, the Fraud Division’s announcement comes only several days after the Justice Department renamed the Criminal Division’s Fraud Section as the “White Collar and Corporate Enforcement Section,” suggesting a clearer demarcation between the new Fraud Division and former Fraud Section, which appears to be split between public and “private” fraud, and with sharpened focuses for both DOJ components.
The Fraud Division’s Structure, Resources, and Priorities
Organizational Structure & Resources
According to the memorandum, the Fraud Division is organized to be “lean, flat, and agile” to “reduc[e] excessive bureaucratic oversight,” and enable career prosecutors deployed across the country to work closely with U.S. Attorneys’ Offices. The Fraud Division will also “foster intra-division and interagency coordination” in pursuit of “seamless collaboration” to combat fraud. The Division comprises specialized litigating sections—including but not limited to a Health Care Fraud Section, Public Trust and Financial Integrity Section, Tax Section, Global Trade & Commerce Enforcement Section, National Enforcement Section, Corporate Enforcement Section, and Appellate Section. The memorandum signals increased investment and enhancement of “cutting-edge data analysis” tools to investigate and prosecute fraud, and indicates the Division will include a National Fraud Detection Center and Criminal Investigation Section. The Fraud Division also will be supported by a dedicated privilege review team and by a standalone Asset Recovery Section staffed with asset recovery attorneys and investigators.
The Fraud Division’s buildout coincides with changes to the Criminal Division’s longstanding Fraud Section, which has recently been rebranded as the “White Collar and Corporate Enforcement Section.” The ambit of that Section has been refined to focus primarily on fraud other than that against the U.S. public fisc, such as insider trading and securities fraud, while government procurement fraud and other work focused on protecting the public fisc has been folded into the scope of the new Fraud Division. Read together, these changes carve out public benefits and taxpayer-dollar fraud as the focus of the Fraud Division, leaving enforcement of private-sector financial crime and Foreign Corrupt Practices Act (“FCPA”) matters to the renamed section. These changes also reflect the rising institutional influence of the Fraud Division, which has already drawn key personnel from the Criminal Division, including the Fraud Section’s old Health Care Fraud Unit.
The Five Priority Areas
Public Trust and Financial Integrity. The Fraud Division identifies government procurement fraud as a “critical priority,” encompassing defective pricing, bid rigging, self-dealing, bribery, product substitution, and billing frauds. Beyond procurement, the Division will target fraud against benefit and grant programs, including student loans, childcare subsidies, veterans’ benefits, nutritional assistance, disaster relief, and small business programs.
Health Care. In response to projections that national health care expenditures will grow from over $3 trillion a year to over $7 trillion, with an estimated 3–10% of that amount lost to fraud, the Fraud Division is “supercharging the historically successful Health Care Fraud Strike Force model with greater resources, data analytics support, and best-in-class technology.” With those resources, the Division “will prosecute the most significant cases involving health care in the United States,” including in the areas of Medicare and Medicaid fraud, controlled substance diversion, home health and hospice schemes, telemedicine fraud, and deceptive marketing of unsafe products and services.
Internal Revenue. Criminal tax enforcement is described as “an integral part of the Fraud Division’s mandate to protect the public fisc.” Enforcement targets include unethical return preparers and individuals concealing income, among others who scheme to defraud the IRS. The Division will use advanced data analytics and financial forensics to identify and pursue this fraud.
Global Trade and Commerce. Through the cross-agency Trade Fraud Task Force, the Fraud Division will prioritize enforcement against “trade and customs violations and supply chains polluted by forced labor.” The Division will focus on “systemic, high-impact noncompliance that threatens our economic and national security,” including in the areas of illicit transshipment schemes, country-of-origin fraud, undervaluation of imported goods to evade duties, sanctions evasion, and foreign forced labor schemes.
Corporate Misconduct. Consistent with the purpose of the Department-wide Corporate Enforcement and Voluntary Self-Disclosure Policy (“CEP”), the Fraud Division will hold accountable “organizations that flaunt the law” while “rewarding those that voluntarily self-disclose, cooperate, and remediate.” The Division has already invoked the CEP in declining prosecution against a health care company, as described in our July 31 client memo, and the memorandum cites a “strong pipeline of ongoing corporate matters.” The memorandum explains prosecutors will work closely with the Corporate Enforcement Section to combat fraud and “fairly and consistently apply the Department’s policies concerning the prosecution of organizations.”
Implications
First, the Fraud Division’s effort to scale “rapidly” signals an active and well-resourced enforcement environment ahead, particularly given the Division’s emphasis on data analytics, financial forensics, and interagency coordination.
Second, health care, government programs, and taxpayer-funded initiatives remain at the top of the public fraud enforcement agenda. Companies receiving reimbursements from Medicare and Medicaid, government contractors, and those that participate in federal grant and benefit programs should expect heightened data-driven scrutiny. The Fraud Division’s commitment to “supercharg[e]” the Health Care Fraud Strike Force model underscores the seriousness of this focus.
Third, the memorandum’s emphasis on data analytics, financial forensics, and the National Fraud Detection Center indicates many new Division matters will initiate from in-house data leads rather than whistleblower complaints or self-reports. Companies operating in the Division’s five priority areas should consider evaluating their internal data monitoring to account for the kinds of patterns that a well-resourced analytics team may detect.
Fourth, the memorandum’s issuance only days after the renaming of the old Fraud Section brings more clarity to the division of labor between these fraud-focused DOJ components. While the Division will increase its focus on the five priority areas articulated in the memorandum, the White Collar and Corporate Enforcement Section will seemingly retain its historical expertise in white collar criminal matters that do not involve U.S. public funds, including in market integrity and FCPA prosecutions. It will be worth monitoring how responsibility for particular matters is allocated between the two components, especially as they continue to build up staff and implement enforcement priorities.
Fifth, the memorandum reaffirmed the value of voluntary self-disclosure, cooperation, and remediation, consistent with the Department-wide CEP. This reinforces the strategic value, in appropriate circumstances, of self-disclosure and cooperation, robust compliance programs, and remediation.