Assistant Attorney General Memorandum to Fraud Division Outlines Division’s Key Enforcement Priorities

Key Takeaways

• Assistant Attorney General Colin M. McDonald released a memorandum to the Department of Justice's Fraud Division personnel that outlines its key enforcement priorities, with the specific aim of preventing fraud against the government and individuals that "inflicts just as much damage to the hearts and souls of Americans as it does to their wallets."[1]
• The memorandum explains how, since its creation this year, the Fraud Division has been working to combat fraud against the government and the public. It details steps that DOJ has undertaken to build out the Fraud Division's resources and announces the creation of specialized litigation sections that will focus on combating different types of fraud.
• Companies and individuals should note this novel mobilization of resources- including the hiring of attorneys and staff, combining specialized personnel to create a comprehensive team, and committing to utilizing technology to detect wrongdoing - as well as the valuable insight that the memorandum provides about the types of cases that the Fraud Division will focus on investigating and prosecuting. An uptick in enforcement actions consistent with the priorities described in the memorandum can be expected. To reduce risk and ensure compliance, it is prudent for organizations to review their compliance policies and procedures concerning all five of these enforcement priority areas, including those that relate to the specific types of prosecutions mentioned in the memorandum, and consider updates where appropriate.

Key Details

Earlier this year, the Department of Justice (DOJ or Department) announced the creation of the first-ever National Fraud Enforcement Division (Division) and tasked the Division to "zealously investigate and prosecute those who steal or fraudulently misuse taxpayer dollars."[2] On August 13, 2026, Assistant Attorney General Colin M. McDonald released a memorandum (Memorandum) that describes the actions DOJ has taken to adequately resource the Division and that outlines the Division's enforcement priorities, which target the frauds "that pose the greatest threats to the American public."[3] The Memorandum notes that "fraud schemes have grown in complexity" because of "technological innovation[s] and economic expansion"[4] and seeks to combat the same by building a comprehensive team that spans the many constituent parts of effective fraud investigations and prosecutions.

Specifically, the Memorandum explains that DOJ has reorganized resources from other Department components, which has resulted in the Division increasing its head count to more than 500 attorneys and staff. It states that DOJ's "aggressive plan" to increase its number of personnel is part of "building the most sophisticated, innovative, and data-driven white-collar law enforcement component in the world."[5] DOJ plans to "rapidly grow" the Division over the next two years by hiring additional resources, including through its "robust talent development pipeline," and reorganizing existing resources. These additional resources will support the Division's prosecutors by providing "asset recovery attorneys and investigators, top-flight appellate counsel, a dedicated privilege review team, corporate enforcement experts, automated litigation support, a cross-disciplinary team of experts in data science, and cutting-edge technology and resources."[6] According to the Memorandum, the Division's resources will be deployed across the country to work directly with United States Attorney's Offices to investigate and prosecute fraud.

The Memorandum also outlines the Division's enforcement priorities. It will focus on "prosecuting frauds that threaten the health, safety, security, and prosperity of Americans-especially the most vulnerable [members of the public], including children, the elderly, and the sick or disabled."[7] The five specific areas the Memorandum identifies are frauds that involve (1) public trust and financial integrity, (2) health care, (3) internal revenue, (4) global trade and commerce, and (5) corporate misconduct.

Regarding frauds involving public trust and financial integrity, the Memorandum explains that the Division will prioritize enforcement actions in which organizations or individuals defraud the government, steal taxpayer dollars, corrupt the economy or defraud American citizens. In particular, the Memorandum identifies as critical priorities a broad range of government procurement frauds - from defective pricing to self-dealing to bribery - and fraud against government benefit and grant programs. Notably, the Memorandum also states that the Division will continue to prioritize prosecution of bid-rigging schemes, which is consistent with the Antitrust Division's stated policies and priorities as well as those of the Procurement Collusion Strike Force, suggesting that there will likely be continued collaboration across DOJ to investigate and prosecute this kind of alleged misconduct.

Regarding its health care fraud priority, the Memorandum states that the Division will specifically target home-health, hospice-services and telemedicine schemes, and schemes that deceptively market unsafe products and services or divert controlled substances. The Division's efforts will "supercharg[e] the historically successful Health Care Fraud Strike Force model" by utilizing greater resources, including the use of "best-in-class technology," "data analytics support" and "cutting-edge data analysis to target exploitative health care fraud schemes."[8]

The Memorandum describes the Division's internal revenue focus as specifically involving situations in which actors file false claims on their returns and/or conceal their income, including when combined with government program frauds. The Division "will deploy the full arsenal of criminal tax tools paired with data analytics, financial forensics, and nationwide coordination," focus on "identify[ing] tax misconduct earlier," and deliver "meaningful deterrence."[9]

With respect to the global trade and finance enforcement priority, the Memorandum describes the Division's efforts as relating to cases that involve trade fraud and customs evasion. These investigations and prosecutions will specifically focus on, "among others, illegal transshipment schemes, country-of-origin fraud, the undervaluation of imported goods designed to evade duties, sanctions evasion, and foreign forced labor schemes."[10]

Finally, the Memorandum describes the Division's enforcement focus on corporate misconduct as targeting organizations that engage in fraud and financial crimes for economic benefit. The Division will prosecute these cases consistent with DOJ's long-standing guidance contained in the Principles of Federal Prosecution of Business Organizations, outlined in the Justice Manual.[11] The Memorandum emphasizes that the Division will reward organizations that "voluntarily self-disclose, cooperate, and remediate."[12] Additionally, the Memorandum notes that the Division has a robust pipeline of ongoing corporate investigation matters. It also states that prosecutors will prioritize anti-fraud corporate enforcement in these matters and the Division will work with corporate enforcement experts to ensure that appropriate resources are devoted to the pipeline of these investigation matters.

The DOJ Criminal Division Fraud Section, which previously served as the Department's premier white collar enforcement section at Main Justice, will continue to exist under the new name of the White Collar and Corporate Enforcement Section (Section). This Section will focus on areas such as the Foreign Corrupt Practices Act and corporate fraud enforcement of crimes that are committed against private individuals. A significant number of prosecutors at the former Criminal Division Fraud Section were transferred to the Fraud Division.

Practical Considerations for Companies and Executives

Given DOJ's sweeping investment in Division personnel and technological resources dedicated to fraud detection, investigation and prosecution, as well as the Memorandum's specific identification of enforcement priorities, companies and executives should consider reviewing their policies and procedures to ensure current compliance with the law. In light of the Memorandum, prudent organizations will specifically review, among other things, policies related to (1) tax compliance procedures; (2) health care compliance, including billing and the marketing of goods and services; (3) import and export compliance procedures; (4) government contracting, procurement compliance and antitrust procedures; (5) sanctions compliance; (6) accounting and disclosure policies; and (7) policies and procedures related to employee conduct and investigations. As the Division grows and deploys its considerable resources, organizations should expect a growing number of investigations into potential corporate misconduct, particularly if that conduct involves any of the five enforcement priorities identified in the Memorandum.

The BakerHostetler White Collar, Investigations and Securities Enforcement and Litigation team is composed of dozens of experienced individuals, including numerous attorneys who have served in the DOJ and at the SEC. Our attorneys include four former U.S. attorneys, several former assistant U.S. attorneys and unit chiefs, and attorneys who have served in the SEC's Division of Enforcement and the SEC's Office of the General Counsel. Our team has extensive experience in defending regulatory investigations and litigation and in providing compliance counseling.

BakerHostetler's Cartel and Government Antitrust Investigations Task Force (Task Force) is comprised of attorneys with extensive experience in proactive antitrust compliance counseling and regulatory investigations and litigation. The Task Force includes former DOJ prosecutors as well as attorneys who are part of both the Antitrust and Competition and the White Collar, Investigations and Securities Enforcement and Litigation teams.

Please feel free to contact any of our experienced professionals if you have questions about this alert.

[1] Memorandum from Assistant Att'y Gen. Colin M. McDonald, The Fraud Division's Enforcement Priorities (August 13, 2026), available at https://www.justice.gov/opa/pr/assistant-attorney-general-colin-m-mcdonald-issues-memorandum-national-fraud-enforcement.

[2] Memorandum from Acting Att'y Gen. Todd Blanche, Creation of the National Fraud Enforcement Division (April 7, 2026), available at https://www.justice.gov/opa/pr/acting-attorney-general-todd-blanche-issues-memorandum-creation-national-fraud-enforcement.

[3] See Memorandum from Assistant Att'y Gen. Colin M. McDonald.

[4] Id.

[5] Id.

[6] Id.

[7] Id.

[8] Id.

[9] Id.

[10] Id.

[11] Id.; see also DOJ's Newly Revised Corporate Enforcement Policy Incentivizes Robust Compliance Programs, Cooperation and Remediation (January 30, 2023), https://www.bakerlaw.com/insights/dojs-newly-revised-corporate-enforcement-policy-incentivizes-robust-compliance-programs-cooperation-and-remediation/.

[12] See Memorandum from Assistant Att'y Gen. Colin M. McDonald; see also DOJ Doubles Down and Commits to Department-Wide Corporate Enforcement Policy (March 18, 2026), https://www.bakerlaw.com/insights/doj-doubles-down-and-commits-to-department%e2%80%91wide-corporate-enforcement-policy/.