DOJ Fraud Division Announces Division-Specific Policies & Considerations for Corporate Enforcement

On October 1, 2026, the Department of Justice’s (DOJ) National Fraud Enforcement Division (“Fraud Division” or “Division”) released a memorandum (“Memo”) detailing the principles and procedures of its corporate enforcement program. The Memo also unveils new factors Fraud Division prosecutors must consider when deciding how to resolve corporate investigations.

The Memo, issued by Fraud Division Assistant Attorney General (“AAG”) Colin McDonald, describes the role of the Division’s own Corporate Enforcement Section and provides significant details for companies and counsel regarding considerations for corporate enforcement matters handled by the Division. But, in doing so, the Memo adds another layer of factors companies and their counsel must consider when navigating corporate criminal investigations. While DOJ efforts over the last several years have been aimed at standardizing the corporate enforcement process across all DOJ components, this Memo presents a Division-specific departure from those efforts.

DOJ’s Year of Restructuring and the Introduction of the Fraud Division

DOJ’s structure has undergone significant transformation in the past year. In January 2026, the White House announced the creation of the Fraud Division designed to target fraud on the federal government. A memorandum by then-Acting Attorney General Todd Blanche followed in April 2026 to formally establish the Fraud Division as a new “robust litigating division” within DOJ (“the April Memo”). Since then, DOJ has committed substantial resources to the Fraud Division. By late August 2026, the Division announced that it had expanded to approximately 500 attorneys and staff.

Further, the Fraud Division has effectively taken operational control of major components of DOJ previously housed within the Criminal Division — including the Health Care Fraud Unit and the Market, Government, and Consumer Fraud Unit — and is structured into specialized litigation sections, including Corporate Enforcement, Asset Recovery, Public Trust and Financial Integrity, Global Trade and Commerce, Tax (which prior to the current administration had been its own division), and a Fraud Division-specific Appellate Section.

On August 13, 2026, AAG McDonald issued a memorandum (“the August Memo”) identifying the Division’s enforcement priorities as those which “threaten the health, safety, security, and prosperity of Americans.” McDonald announced that the Division’s anti-fraud efforts would be concentrated specifically on matters involving (a) public trust and financial integrity, (b) healthcare, (c) internal revenue (criminal tax), (d) global trade and commerce, and (e) corporate misconduct. Regarding the last category, the August Memo introduced the Division’s own Corporate Enforcement Section and stated that the new Division had “a strong pipeline of ongoing corporate matters” and that, consistent with DOJ’s nationwide Corporate Enforcement Policy (CEP), companies that identify and self-report misconduct, cooperate with investigations, and remediate will be treated more favorably.

In the August Memo, AAG McDonald also announced that DOJ planned to grow the Fraud Division “rapidly” for the next two years with “an aggressive plan” to attract and retain new personnel. Shortly thereafter, DOJ announced the National Fraud Detection Center (NFDC) within the Division. The NFDC is a prosecutor-led, multi-agency data analytics center which utilizes sophisticated data science, advanced analytics, and data-sharing agreements with federal and state agencies to proactively mine for and detect fraud patterns. DOJ announced that the NFDC’s participants include the Federal Bureau of Investigation, Homeland Security Investigations, IRS Criminal Investigation, the Financial Crimes Enforcement Network, and the Offices of Inspector General of multiple agencies, including the Department of Health and Human Services and the Department of Labor, among others. This announcement signaled that DOJ was seeking to centralize and coordinate its government fraud enforcement and have those efforts be increasingly data driven (for further insight from Goodwin, see The New Era of Data-Driven Fraud Enforcement).

Role of the Corporate Enforcement Section in Fraud Division Investigations

This October Memo now announces more specifically the role of the Fraud Division’s Corporate Enforcement Section and sets forth its principles and procedures for corporate enforcement. While warning against “overbroad corporate enforcement” that borders on “interfere[nce] with legitimate business operations,” the Memo maintains that the Fraud Division is committed to “zealously prosecute corporate actors that defraud taxpayers and the United States of America,” consistent with the clear objectives of this new Fraud Division more broadly.

The Memo outlines several ways Corporate Enforcement Section personnel will be involved in all corporate investigations across the Fraud Division. To begin, within seven days of the issuance of this Memo, Fraud Division prosecutors currently working on corporate investigations are directed to report those investigations to the Chief of the Corporate Enforcement Section. Further, prosecutors across the Fraud Division are directed to work closely with those in the Corporate Enforcement Section throughout any corporate investigation, from case intake through resolution, so that the corporate enforcement specialists can adequately support the investigation and ensure the consistent, fair, and successful prosecution of corporate crime across the Division.

The Memo also details that the Corporate Enforcement Section will lead the Fraud Division’s work in evaluating a company’s compliance with the terms of any corporate criminal resolution, including enhancing its compliance program and ensuring adequate reporting under any disclosure obligations.

Additionally, in announcing the creation of the Fraud Division in the April Memo, then-Acting Attorney General Blanche stated that every U.S. Attorney’s Office in the country had to designate a prosecutor to be detailed “in-place” to the Fraud Division. While the directives of this most recent Memo do not extend to cases assigned to a District Fraud Counsel within a U.S. Attorney’s Office that are not concurrently supervised by the Fraud Division, the Memo does instruct that the Corporate Enforcement Section can advise the U.S. Attorney’s Offices on fraud matters where helpful to DOJ’s overall mission.

The Memo does not describe how the work of the Fraud Division and its own Corporate Enforcement Section may overlap, or cooperate or conflict, with the Criminal Division’s White-Collar and Enforcement Section (formerly, the Fraud Section). The Criminal Division’s White-Collar and Enforcement Section is tasked with investigating and prosecuting sophisticated economic crime and other forms of complex misconduct, which are more than likely to intersect with the matters that fall within the purview of the Fraud Division. For example, an investigation of a publicly-traded defense contractor for alleged procurement fraud may implicate the Criminal Division’s traditional corporate enforcement priorities, as well as the Fraud Division’s priority in combatting fraud related to government contracts. Leadership within the sections overlaps as well. The acting chief of the Fraud Division’s Corporate Enforcement Section, Marnee Rand, also serves as the chief of the Corporate Enforcement and Compliance Unit within the White-Collar and Enforcement Section of the Criminal Division.

At the Global Investigations Review Annual Investigations Meeting on September 30, 2026 — a day before the release of this Memo — Criminal Division Chief Tysen Duva was asked what may be the dividing line between the two Divisions, particularly with respect to a company’s choice to self-disclose conduct to DOJ. Duva said that the primary distinction will be that the Fraud Division will handle matters where the government was harmed and that “anything else” will remain in the purview of the Criminal Division’s White-Collar and Corporate Enforcement Section. Duva acknowledged, however, that government procurement fraud and healthcare fraud may straddle both components and that the Divisions would work as a team to determine which Division should take the lead in a particular corporate enforcement matter.

New Factors for Corporate Enforcement Decision-Making

The Memo further reiterates the types of fraud matters identified in McDonald’s August Memo that will be the focus (though not exclusive) of the Division:

1. Fraud schemes involving the healthcare industry, including healthcare fraud, 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.

Perhaps most notably, the Memo then lists ten factors on which Fraud Division personnel “must place great weight . . . in determining whether to bring charges and negotiating plea or other agreements”:

1. Knowledge of or involvement in fraud scheme by corporate management;
2. Efforts to conceal fraud from government agencies or auditors or otherwise impede or obstruct a government function or oversight;
3. Conduct that furthers the scheme lasting three years or more;
4. Actions that threaten the safety or security of Americans, including military readiness;
5. Conduct that causes substantial financial hardship to a taxpayer-funded program or government function;
6. Conduct that affects multiple taxpayer-funded programs or government functions;
7. Conduct that affects three federal districts or more;
8. Conduct that results in financial harm to twenty-five or more victims or $25 million or more in loss;
9. Conduct that involves the exfiltration of American dollars to support foreign adversaries; and
10. Conduct that involves immigration offenses.

Interestingly, AAG McDonald directs Fraud Division personnel to continue applying the existing Principles of Federal Prosecution of Business Organizations in the Justice Manual (§ 9-28.000), which set forth the factors prosecutors should consider in reaching a decision as to the proper treatment of a corporate target. In addition, McDonald also directs Fraud Division prosecutors to follow existing DOJ policies governing voluntary self-disclosure and declinations, including the Department-wide CEP issued on March 10, 2026. The issuance of the CEP (discussed by Goodwin in detail in DOJ Expands Corporate Enforcement and Voluntary Self-Disclosure Policy Nationwide) was a significant step by DOJ towards standardizing corporate enforcement across all DOJ components.¹

While knowledge of the fraud by corporate management and efforts to conceal the wrongdoing are among the Justice Manual factors, the new Fraud Division factors are somewhat novel. What is more, the Memo instructs that the list is non-exhaustive.

Continued Emphasis on Data Analytics and Whistleblower Incentives

In addition to leveraging the previously announced NFDC data analytics to generate new fraud investigations, in this Memo, McDonald also directs the Fraud Division to design and implement policies and programs to incentivize whistleblowers to bring forward complaints regarding government fraud. The Memo, however, is light on detail as to what those policies might be, perhaps contemplating additional incentives beyond DOJ’s Corporate Whistleblower Awards Pilot Program discussed in the CEP.

Takeaways

The Memo provides visibility into DOJ’s new and expanding Fraud Division and its vision for the handling of corporate investigations and prosecutions. Yet, the directives laid out by the Fraud Division add more complexity, and in some ways less clarity, for companies attempting to navigate corporate enforcement matters with DOJ. For example:

• How will the components lead and organize corporate enforcement matters that fit within the priorities of both the Fraud and Criminal Divisions? The work of the Criminal Division’s White-Collar and Corporate Enforcement Section and the Corporate Enforcement Section within the Fraud Division will almost certainly intersect. For example, matters that do not begin as investigations into fraud against the government may frequently have components that touch on the Fraud Division’s priorities, like tax and tariff fraud. But DOJ’s directives so far do not explain how the two Divisions will handle such cases in practice, including whether the Criminal Division will continue to have any role in cases that touch on the Fraud Division’s priorities. Nor do DOJ directives thus far contemplate matters on which the two Divisions’ priorities might be at conflict.
• Relatedly, where should companies direct self-disclosure for conduct that the straddles the purview of both Divisions? Should disclosures be directed to U.S. Attorney’s offices? The CEP instructs companies to make voluntary disclosures to the appropriate DOJ component, but any company considering self-disclosure must now evaluate the nature and scope of the conduct against the priorities of the two Divisions and make a call that likely will be less than clear-cut.
• Will we get a better understanding of the new factors that weigh in corporate enforcement outcomes? For example, what constitutes “[a]ctions that threaten the safety or security of Americans” or “substantial financial hardship” to a government program? Will the amount of federal districts impacted affect an outcome more significantly than the dollar amount at issue? Who are the qualifying “foreign adversaries” that may give rise to heighted Fraud Division scrutiny? And given that this list is non-exhaustive, what other factors might be considered? It remains to be seen whether these new corporate enforcement factors will be further defined in DOJ guidance or whether enforcement actions and resolutions themselves will define these terms.

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Goodwin’s Government Investigations, Enforcement & White Collar Defense lawyers will continue to monitor enforcement developments such as those described here and their potential implications. Please contact the Goodwin team with any questions related to these DOJ policies and if we can assist you with counsel in responding to any inquires or investigations.