DOJ Announces Enforcement Priorities for National Fraud Enforcement Division: What Companies Need to Know

On August 13, 2026, Assistant Attorney General Colin M. McDonald issued the first enforcement priorities memorandum for the Department of Justice’s (DOJ) new National Fraud Enforcement Division (Fraud Division).¹ The memorandum establishes five priority enforcement areas for what the DOJ describes as the first division in Department history dedicated solely to detecting, investigating, and prosecuting fraud against the United States and its citizens. With an estimated $233 to $521 billion in annual federal fraud losses at stake, the Division represents a fundamental restructuring of how the federal government pursues fraud—and companies across industries should take notice.

This alert discusses:

• The DOJ’s announcement and the Fraud Division’s structure;
• The five stated enforcement priority areas;
• Why this matters for companies, government contractors, and regulated entities; and
• Key takeaways and what companies should consider doing now.

The Announcement and Division Structure

The National Fraud Enforcement Division was created earlier in 2026 in response to what the Government Accountability Office estimates are between $233 billion and $521 billion in annual losses to fraud against the federal government. The Division is the first in DOJ history dedicated exclusively to fraud enforcement—consolidating resources that were previously scattered across the Criminal Division, the Civil Division, and individual U.S. Attorney’s Offices without unified command or coordination.

The Division is growing at an extraordinary pace. The Division is currently on track to reach approximately 500 attorneys and staff by August 24, 2026—with plans for continued rapid growth over the following two years. The Division is designed to be “lean, flat, and agile,” with reduced bureaucratic oversight and prosecutors deployed nationwide to work alongside U.S. Attorney’s Offices.²

The organizational structure includes specialized litigating sections: a Health Care Fraud Section, Public Trust and Financial Integrity Section, Tax Section, Global Trade & Commerce Enforcement Section, National Enforcement Section, Corporate Enforcement Section, Asset Recovery Section, Appellate Section, and a Special Matters Section. Critically, the Division also houses a National Fraud Detection Center and supporting analytic units—a Criminal Investigation Section and Strategic Analysis Section—that signal a data-driven, proactive approach to identifying fraud rather than the traditional model of waiting for referrals.

Enforcement Priorities

The McDonald memorandum identifies five priority areas, each with specific enforcement targets:

1. Public Trust and Financial Integrity. This priority encompasses government procurement fraud (including defective pricing, bid rigging, self-dealing, bribery, product substitution, and billing fraud), benefit and grant program fraud (targeting abuse of student loan, childcare, veterans’ benefits, disaster relief, and small business programs), and market integrity offenses.
2. Health Care Fraud. The Division will target telemedicine fraud, Medicare and Medicaid fraud, controlled substance diversion, home health and hospice schemes, and deceptive marketing of unsafe products. The memorandum emphasizes enhanced use of data analytics and an expanded Health Care Fraud Strike Force.
3. Internal Revenue and Criminal Tax. Targets include unethical return preparers, income concealment, and promoters of abusive tax schemes, with an emphasis on intra-Division coordination between the Tax Section and other enforcement components.
4. Global Trade and Commerce. This is a notable new priority reflecting the current geopolitical environment. Targets include trade fraud, customs evasion, forced labor in supply chains, illicit transshipment, country-of-origin fraud, undervaluation of imports, and sanctions evasion. The Division will operate a Trade Fraud Task Force to coordinate these efforts.
5. Corporate Misconduct. The Division’s dedicated Corporate Enforcement Section will focus on holding organizations accountable while rewarding voluntary self-disclosure, cooperation, and remediation. The memorandum explicitly ties the Division’s work to existing DOJ policies on corporate prosecution, including the use of deferred prosecution agreements and non-prosecution agreements for qualifying organizations.

Why This Matters

The creation of the Fraud Division represents a fundamental shift in how the federal government organizes its fraud enforcement resources. Several aspects of this development are genuinely novel and warrant close attention:

Unprecedented scale and dedicated mission. Historically, fraud prosecution was distributed across multiple DOJ components without unified strategic direction. The Fraud Division consolidates these resources under a single command structure with 500+ personnel and plans for continued rapid growth. This concentration of enforcement capacity will likely yield a meaningful increase in both the volume and sophistication of fraud investigations and prosecutions.

Data-driven detection model. The National Fraud Detection Center, together with the Criminal Investigation Section and Strategic Analysis Section, signals a shift from reactive, referral-based case generation to proactive identification of fraud through data analytics. Companies should expect that government databases, procurement records, billing data, and trade filings will be mined systematically for indicators of fraud—not merely investigated after a complaint.

Whole-of-government coordination. The memorandum emphasizes breaking down data silos and coordinating across agency boundaries. The District Fraud Counsel Section deploys prosecutors to work directly within U.S. Attorney’s Offices nationwide, creating a coordinated national enforcement network rather than jurisdiction-by-jurisdiction prosecution.

Trade fraud as a dedicated priority. The elevation of trade fraud—including customs evasion, forced labor supply chain violations, and sanctions evasion—to a top-tier enforcement priority reflects the current geopolitical environment. Companies with international supply chains face heightened risk, particularly those importing from or transshipping through high-risk jurisdictions.

Explicit corporate enforcement framework. The dedicated Corporate Enforcement Section within the Division institutionalizes the application of DOJ’s voluntary self-disclosure and cooperation policies in the fraud context. Companies that self-report misconduct and cooperate can expect to be treated differently than those that do not—but the framework also makes clear that DOJ intends to aggressively pursue organizations that fail to self-police.

Key Takeaways: What Companies Should Consider Doing Now

In light of the Fraud Division’s establishment and stated priorities, companies, government contractors, health care providers, and importers should consider the following steps:

• Evaluate voluntary self-disclosure posture. The Division’s Corporate Enforcement Section explicitly rewards voluntary self-disclosure, cooperation, and remediation. Companies that identify potential fraud exposure should carefully evaluate whether proactive disclosure to DOJ may be advantageous—particularly given the Division’s enhanced data analytics capabilities, which increase the likelihood that misconduct will be detected independently.
• Strengthen government contract compliance programs. Companies with federal contracts or grants should review their compliance controls around pricing, billing, deliverables, and subcontractor oversight. The Division’s procurement fraud priorities—including defective pricing and product substitution—suggest heightened scrutiny of routine contracting practices.
• Audit supply chain and trade compliance. The Trade Fraud Task Force and the Division’s focus on customs evasion, forced labor, country-of-origin fraud, and sanctions evasion should prompt companies with international supply chains to audit their import compliance, tariff classification practices, and supply chain due diligence—particularly regarding forced labor risks and transshipment arrangements.
• Review health care billing and marketing practices. Health care companies should reassess their billing compliance, telemedicine arrangements, and marketing materials. The Division’s emphasis on data analytics to identify outlier billing patterns means that statistical anomalies—not just whistleblower complaints—may trigger investigations.
• Prepare for proactive investigations. The National Fraud Detection Center’s data-driven approach means companies may face inquiries or investigations that were not initiated by a whistleblower or a competitor complaint but instead by algorithmic identification of anomalies. Companies should ensure their document retention, internal reporting, and investigation-response protocols are current and robust.

We will continue to monitor the Fraud Division’s development and enforcement activity. If you have questions about how these priorities may affect your organization, or if you wish to evaluate your compliance posture in light of the Division’s stated enforcement focus, please contact your attorney or the Chair of our Government Enforcement Defense and Investigations team:

• Eric Pruitt: 312-715-5170 / eric.pruitt@quarles.com

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¹ Memorandum from Assistant Attorney General Colin M. McDonald, “National Fraud Enforcement Division Priorities” (Aug. 13, 2026). See here.

² Id. at 2 (describing the Division’s organizational philosophy and growth trajectory).