After Reorganization, Corporate Fraud Gets a Closer Look: New Enforcement Policies from DOJ’s National Fraud Enforcement Division

On October 1, 2026, Assistant Attorney General for the U.S. Department of Justice’s (DOJ) National Fraud Enforcement Division (Fraud Division), Colin McDonald, issued a memorandum providing directives for the Fraud Division designed to promote transparency and incentivize disclosure of misconduct (McDonald Memo). This memorandum follows DOJ’s creation of the Fraud Division in April 2026, which consolidated the DOJ Criminal Division’s Tax Section, Healthcare Fraud Unit, and Market, Government, and Consumer Fraud Unit into one Division under McDonald’s leadership. 

The Fraud Division’s enforcement priorities are consistent with those set out in the 2025 memoranda from the former Criminal Division chief, Matthew Galeotti (Galeotti Memo), which we wrote about here, and reinforce the DOJ’s broader emphasis on individual accountability, voluntary self-disclosure, and efficient resolution of corporate investigations.  The McDonald Memo emphasizes that the DOJ will aggressively prosecute corporate actors that defraud taxpayers and the United States but will also firmly guard against “overbroad corporate enforcement” to avoid interfering with legitimate business operations.

McDonald makes clear that the Fraud Division will follow DOJ’s Corporate Enforcement and Voluntary Self-Disclosure Policy (CEP).  He notes that the Fraud Division’s policies will encourage and protect the disclosure of information by whistleblowers and announces his intention to design and implement policies and programs to incentivize whistleblowers to make disclosures. 

McDonald also provides further color on the Trump Administration’s efforts to centralize corporate enforcement, namely outlining the role of the newly formed Corporate Enforcement Section. The Corporate Enforcement Section, McDonald states, will have primary responsibility for evaluating whether a company has complied with the terms of any corporate criminal resolution.

Fraud Division Investigative Priorities and Charging Criteria

The McDonald Memo outlines the Fraud Division’s corporate enforcement priorities, which include schemes involving:

• The healthcare industry; 
• Public trust and financial integrity; 
• Tax evasion; and
• Global trade and commerce. 

The Fraud Division will consider a variety of factors when determining whether to bring charges and when negotiating a plea or other agreement.  These factors include: 

1. Knowledge of or involvement in a 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.

Notably, many of the enumerated factors focus on aggravating circumstances traditionally associated with large-scale or particularly harmful misconduct, suggesting that the Fraud Division intends to reserve the most significant corporate enforcement actions for matters involving substantial victim harm, management involvement, national security concerns, or significant financial losses, considerations that have long been core priorities of the Fraud Section and DOJ more generally.

In remarks, McDonald emphasized that the Fraud Division’s primary concern was the first factor—or whether there is knowledge of or involvement in a fraud scheme by corporate management. 

Key Takeaways

• Corporate fraud remains a significant enforcement priority, but the memorandum signals a more targeted approach focused on substantial misconduct and culpable individuals rather than broad-based corporate liability. The reorganization of the DOJ’s Criminal Division and creation of a new division with an emphasis on fraud, the ongoing investment into the new Fraud Division, and issuance of a memorandum focused specifically on corporate enforcement all underscore DOJ’s commitment to pursuing corporate fraud. Notably, Assistant Attorney General McDonald identified management knowledge of, or involvement in, fraudulent conduct as the Fraud Division’s primary concern, reinforcing a broader enforcement trend toward executive accountability that is also evident in SEC investigations and enforcement actions.
• Continued incentives for self-reporting, cooperation and remediation. While there is an overarching emphasis from the DOJ on holding individual bad actors accountable, the DOJ is also focused on avoiding overbroad corporate enforcement.  The McDonald Memo makes clear that the Fraud Division will, consistent with the DOJ’s CEP, reward corporations that come forward to self-report and focus on the prosecution of individual bad actors. Maintaining strong corporate compliance programs and internal controls are likely to help companies prevent, detect, and address potential misconduct at an early stage.
• Continued emphasis on whistleblower programs. The McDonald Memo makes clear that the Fraud Division intends to implement policies and programs to incentivize whistleblowers to come forward, including individuals who may have participated in the underlying misconduct. Additional incentives for whistleblowing may place further pressure on companies to be aware of and effectively manage incoming internal whistleblower complaints. 
• Uncertainty around the Corporate Enforcement Section. The McDonald Memo states that the new Corporate Enforcement Section will function to maximize “efficiency, consistency, and results” in Fraud Division corporate enforcement actions under the CEP. Whether the Corporate Enforcement Section will deliver the consistency, predictability, and transparency necessary to materially influence corporate self-reporting decisions remains to be seen.

Potentially greater alignment between DOJ and SEC investigations. While the memorandum does not directly address SEC enforcement, several of the Fraud Division’s charging factors overlap with issues commonly investigated by the SEC, including management involvement, concealment from auditors, financial reporting misconduct, and fraud affecting investors or government programs. Companies facing parallel SEC and DOJ investigations should expect continued coordination between the agencies, particularly where senior executives allegedly participated in misconduct.

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