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  • DOJ Issues Memo Outlining New Corporate Fraud Enforcement Priorities
    10/06/2026

    On October 1, 2026, the Department of Justice’s National Fraud Enforcement Division (“Fraud Division”) released Directive 26-12 (“Directive”).  The Directive reshapes how federal prosecutors approach corporate fraud.  Focusing on the priority areas the Fraud Division announced in a previous memorandum authored by Assistant Attorney General, Colin McDonald,1  the Directive introduces ten factors prosecutors “must place great weight” on when considering corporate fraud charges, and formalizes the central coordinating role of the Corporate Enforcement Section (“CES”) in the investigation and prosecution of alleged fraud. The Directive further reminds the public of an era of more aggressive, yet targeted, corporate fraud enforcement.

    As background, Attorney General Todd Blanche announced the creation of the Fraud Division on April 7, 2026, describing its “core mission” as “zealously investigat[ing] and prosecut[ing] those who steal or fraudulently misuse taxpayer dollars.”2  The Fraud Division absorbed the Tax Section, the Health Care Fraud Unit, and portions of the Market, Government and Consumer Fraud Unit.

    The Directive memorializes that mission by adopting an “all-tools” enforcement posture, while also cautioning against “overbroad corporate enforcement.”  It also sets forth a reporting and coordination framework centered on the CES. Specifically, within seven days of the Directive’s issuance, Fraud Division prosecutors must report any ongoing corporate fraud investigations to the Chief of the CES and promptly notify the CES of new investigations and major case developments.  The CES will then assume “primary responsibility for evaluating a company’s compliance with the terms of any corporate criminal resolution.”  However, these requirements do not apply to matters assigned to District Fraud Counsel by a U.S. Attorney’s Office not supervised by the Fraud Division.

    Drawing from the August Memorandum,3 the Directive outlines the four enforcement priority areas when opening and conducting a corporate fraud investigation:

    (1) fraud schemes involving the health care industry, distribution of controlled substances, and violations of the Federal Food, Drug, and Cosmetic Act;

    (2) fraud schemes involving the public trust or financial integrity of Americans and markets related to procurement, government contracts, and other government functions;

    (3) fraud schemes involving significant evasion of internal or external revenue; and

    (4) fraud schemes involving tariff evasion, importation of goods or services, or forced labor.

    The Directive identifies ten non-exhaustive factors that prosecutors must weigh heavily when making charging decisions or negotiating plea agreements, including, among other factors, corporate management’s knowledge or involvement, concealment efforts, actions that threaten safety or cause substantial financial hardship on publicly funded functions, and acts that involve immigration offenses.  Along with the ten factors, prosecutors must also continue following the Principles of Federal Prosecution of Business Organizations and may consider any other relevant factors, consistent with the Justice Manual.

    The Fraud Division is rapidly opening new individual and corporate fraud investigations, utilizing resources available through the National Fraud Detection Center and its partners. Additional investigations may flow from the design of programs and policies, encouraged by the Directive, that incentivize whistleblowers to come forward with information, including those who share responsibility for the misconduct.

    The Directive makes clear that the Fraud Division intends to be both aggressive and balanced when considering actions that could interfere with legitimate business operations.  Companies operating in health care, government contracting, tax, and trade should treat the Directive as a road map, ensuring that their compliance policies and procedures are up to date to shield themselves from enforcement action.

    Footnotes

    1. Memorandum from Colin M. McDonald, Assistant Attorney General to U.S. Department of Justice All Fraud Division Personnel, (Aug. 13, 2026) (“August Memorandum”),  https://www.justice.gov/opa/media/1457756/dl?inline.

    2. Memorandum for The Department of Justice, (April 7, 2026), https://www.justice.gov/ag/media/1435311/dl?inline.

    3. DOJ’s National Fraud Enforcement Division Announces Enforcement Priorities, A&O Shearman (Sept. 1, 2026), https://www.lit-wc.aoshearman.com/dojs-national-fraud-enforcement-division-announces-enforcement-priorities. 

    Categories: DOJ,  Enforcement

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