In brief
On 1 October 2026, Colin McDonald, Assistant Attorney General for the DOJ’s newly created National Fraud Enforcement Division, issued Directive 26-12: Corporate Enforcement in the Fight Against Fraud (“Directive”).1
The Directive communicates to Fraud Division personnel certain organizational matters arising from the establishment of the Fraud Division as they pertain to corporate enforcement, reiterates the current Administration’s enforcement priorities and promotes channels for identifying fraudulent conduct through corporate disclosures and whistleblower reporting.
It is common practice for Assistant Attorneys General to issue memoranda addressing corporate criminal enforcement.2 And indeed, this is not the first such document issued by McDonald in this role.3 While the Fraud Division is new as an organizational matter within DOJ, there is little substantively new policy reflected in this Directive. The enforcement priorities it sets out are broadly consistent with prior messaging from DOJ. In particular, the Directive is consistent with many longstanding prosecutorial practices reflected in the Department’s Justice Manual Principles of Federal Prosecution of Business Organizations4 as well as several prior memoranda issued by Department and Administration leadership while standing-up the Division.
Finally, also consistent with the Administration’s prior messaging (e.g., on Foreign Corrupt Practices Act enforcement)5 the Directive seeks to strike a balance between taking an “aggressive all-tools approach” to investigating and prosecuting corporate fraud and the individuals engaged in such conduct without being overly burdensome to legitimate business operations.
Background to the Fraud Division
The Fraud Division’s primary stated objective is to “zealously investigate and prosecute those who steal or fraudulently misuse taxpayer dollars” through a centralized and coordinated approach within the Department of Justice, working with other Government and law enforcement stakeholders. The Division has been established and organized through the reallocation of resources from various elements of the Justice Department during 2026. The DOJ’s efforts in this regard are made in support of the President’s Task Force to Eliminate Fraud, established in early 2026 and chaired by Vice President JD Vance.
On 7 April 2026, then Acting Attorney General Todd Blanche issued a memorandum with organizational details about the Division,6 which was then formally launched in August.7 That memo stated that each of the 93 US Attorney’s Offices would “designate an experienced prosecutor to be detailed-in-place” to the new Division, and those prosecutors were already working throughout the country and reporting to local US Attorneys. The Directive reflects a continuing effort to organize and define the Division’s mandate.
Organizational matters
Within the Fraud Division, a new Corporate Enforcement Section has been established which will play a centralized role in managing corporate investigations, prosecutions and resolutions. The Section will assist Division prosecutors with corporate enforcement cases and is intended to help ensure adequate resourcing of these cases and consistency in corporate charging decisions. The Section will also monitor remediation and reporting obligations, and the assessment of corporate compliance programs under the Department’s Evaluation of Corporate Compliance Programs guidelines.8
The Directive instructs Fraud Division prosecutors to identify ongoing and any new corporate fraud investigations to the Chief of Corporate Enforcement Section and to work with the Corporate Enforcement Section, during the lifetime of the case, through to resolution. Interestingly, the memo acknowledges that it does not apply to cases handled by US Attorney’s Offices without Fraud Division supervision.
Enforcement priorities
AAG McDonald issued a memorandum in August addressing the priorities of the Division as a whole, not limited to corporate enforcement.9 That memorandum identified four areas as the focus of enforcement: Public Trust and Financial Integrity (i.e., fraud on the Government); Health Care; Internal Revenue; and Global Trade and Commerce. The new Directive instructs prosecutors that in opening and conducting corporate investigations, they should prioritize the same areas. Within that framework, the Directive then identifies some factors on which “Division personnel must place great weight,” including:
- Conduct that furthers the scheme lasting three years or more
- Conduct that affects three federal districts or more
- Conduct that results in financial harm to twenty-five or more victims or USD 25 million or more in loss
- Conduct that involves immigration offenses
The Justice Manual’s Principles of Federal Prosecution of Business Organizations10 require prosecutors to consider federal policies and priorities, which McDonald’s memo articulates11. (counseling prosecutors to consider “the nature and seriousness of the offense, including the risk of harm to the public, and applicable policies and priorities, if any, governing the prosecution of corporations for particular categories of crime”). Moreover, the Directive recognizes that “A prosecutor may consider any other relevant factor, consistent with the Justice Manual, and place appropriate weight on such factor in deciding a course of action in a corporate case”.
Whistleblowing
The Directive calls for the development of additional policies and programs within the Fraud Division designed to incentivize individuals and companies to report potential fraud as whistleblowers. We will see what these anticipated programs may add to the existing Department-wide programs already available to whistleblowers. These programs already include the Corporate Whistleblower Awards Pilot Program12 which was revised earlier this year and the False Claims Act qui tam program13, which incentivizes whistleblowers to report fraud in government programs.
The Directive also underscores the Fraud Division’s increasing reliance on data analytics, including through the recently established National Fraud Detection Center. By combining data and analytical capabilities across agencies and taxpayer-funded programs, the Center is intended to identify patterns and anomalies that may not be apparent when information is considered by a single agency. The Directive indicates that these capabilities will enable the Division to generate investigative leads and initiate individual and corporate fraud investigations quickly.
The Division’s enhanced detection capability and emphasis on incentivizing whistleblowers, including individuals who participated in misconduct, increase the possibility that DOJ may identify potential misconduct through its own analysis or receive a whistleblower report before a company has detected wrongdoing and had the opportunity to make a voluntary disclosure.
Conclusion
While not changing Government policy or covering substantially new ground, the Directive serves as a reminder that government contractors, and companies in the healthcare and life sciences industry which receive federal funds, will continue to be a focus of corporate fraud enforcement. The Directive also flags that corporate fraud implicating the Trump Administration’s priorities, such as tariffs, national security and immigration, will be zealously investigated and prosecuted. These factors may be relevant for corporations in determining how to focus and resource fraud-related compliance programs.----------
1 https://www.justice.gov/opa/media/1463571/dl?inline
2 It has been a longstanding practice for Deputy Attorneys General and Assistant Attorneys General to issue memoranda articulating the Department's fraud enforcement policies and priorities and how those will be applied to corporate defendants.
3 See 13 August 2026 memorandum addressing the Fraud Division’s Enforcement Priorities as a whole: https://www.justice.gov/opa/media/1457756/dl?inline
4 https://www.justice.gov/jm/jm-9-28000-principles-federal-prosecution-business-organizations
5 https://www.justice.gov/dag/media/1403031/dl
6 https://www.justice.gov/ag/media/1435311/dl?inline
8 https://www.justice.gov/criminal/criminal-fraud/page/file/937501/dl
9 Id at FN 3
10 Id at FN 4
11 See Justice Manual 9-28.300