On August 13, 2026, the Assistant Attorney General for the U.S. Department of Justice (“DOJ”) National Fraud Enforcement Division (the “NFED”), Colin M. McDonald, released a memorandum outlining NFED’s enforcement priorities. The memorandum is the first memo of this kind from NFED.
The establishment of NFED earlier this year represented a watershed moment for federal fraud prosecution, as it established DOJ’s first-ever division dedicated exclusively to combating fraud against taxpayer dollars and taxpayer-funded programs. With a stated goal of having 500 prosecutors and staff by August 24, NFED seeks to deploy “cutting-edge data analysis” across a “whole-of-government” effort. The establishment of NFED signals a fundamental shift in federal fraud enforcement, one that seeks to compress investigation timelines and narrow the window for voluntary disclosures. Breaking down data barriers, eliminating silos, and establishing partnerships with U.S. Attorneys’ Offices, federal agencies, and state and local partners, the NFED’s priorities are a warning call to companies to expect more efficient detection, investigation, and prosecution than in the past. The creation of the NFED signals a desire on the part of the Trump administration (“Administration”) to meaningfully escalate federal fraud enforcement sophistication and resources.
Five Fraud Enforcement Priorities
The NFED memo identifies five priority areas for federal fraud prosecution:
Public Trust and Financial Integrity
This priority encompasses government procurement fraud (including defective pricing, bid rigging, and bribery), exploitation of benefit and grant programs (including student loans, veterans’ benefits, disaster relief, and small business programs), and threats to market integrity.
Health Care
The NFED will prioritize telemedicine fraud, home health and hospice scams (particularly targeting vulnerable elderly Americans), kickback schemes, illegal opioid distribution, and Medicare/Medicaid fraud, using “cutting-edge data analysis” and enhanced Health Care Fraud Strike Force resources.
Internal Revenue
Criminal tax enforcement protects the public fisc by targeting unethical return preparers, income concealment schemes, and abusive tax promoters. The NFED recognizes that tax fraud frequently overlaps with benefit fraud, and will coordinate across divisions for comprehensive enforcement.
Global Trade and Commerce
The NFED will lead coordinated enforcement against customs evasion, country-of-origin fraud, transshipment schemes, sanctions evasion, and forced labor in supply chains—recognizing that trade fraud implicates national security alongside economic interests.
Corporate Misconduct
The NFED will seek to hold accountable organizations engaged in fraud while working closely with the Corporate Enforcement Section. Read more about DOJ’s new Corporate Enforcement and Voluntary Self-Disclosure Policy here.
One critical element remains unresolved and could reshape fraud litigation strategy. The April 2026 memorandum creating the NFED tasked DOJ’s Office of Legal Policy with determining whether non-criminal elements of DOJ—potentially including the Civil Division’s Commercial Litigation Branch-Fraud Section, which enforces the False Claims Act (“FCA”)—should be brought within the NFED. That recommendation was due in early August 2026. If implemented, such a consolidation would represent a rare combination of civil and criminal fraud enforcement, raising important questions about grand jury secrecy and parallel investigation protocols. Although combining criminal and civil enforcement in the same office (whether a Main Justice component or a U.S. Attorney’s Office) is not unheard of, it does pose a real risk that grand jury material (such as testimony, subpoenaed documents, deliberations) could reach civil-side personnel who are not authorized recipients under Federal Rule of Criminal Procedure 6(e). Even inadvertent access, through shared databases, joint meetings, or a supervisor briefing both teams, can constitute a technical violation. The status of that recommendation remains unclear but warrants close attention.
Important Organizational Distinction: The NFED vs. the White Collar and Corporate Enforcement Section
An important distinction bears highlighting as companies assess their fraud exposure. The NFED’s mandate is specifically focused on fraud against taxpayer dollars and taxpayer-funded programs. However, DOJ’s broader criminal fraud enforcement infrastructure extends beyond the NFED. The Criminal Division’s White Collar and Corporate Enforcement Section (recently renamed from the Criminal Fraud Section)[1] maintains separate focus on market integrity fraud and consumer fraud schemes. That Section addresses securities fraud, financial institution fraud, commodities fraud, and related market-based criminal conduct—areas that fall outside of the NFED’s stated priorities.
This organizational structure means that companies should assess which enforcement division’s priorities are most relevant to their industry. A company allegedly engaged in healthcare fraud affecting Medicare or Medicaid falls within the NFED’s mandate; however, a financial services company accused of securities fraud would fall within the White Collar and Corporate Enforcement Section's purview. Many complex schemes may implicate both divisions’ interests, requiring companies to be cognizant of the distinctions and the different enforcement philosophies each component may bring to bear.
How the NFED exercises its discretionary authority to address the Administration’s relevant priorities is equally as important. Notwithstanding the Administration’s proclamation that its efforts to uncover fraud will be exercised without fear or favor, the federal government may creatively utilize its discretionary enforcement authority to achieve its public policy goals.[2] Given the NFED’s broad mandate, businesses and nonprofits that receive federal funding and assistance for programmatic activities not aligned with the Administration’s policy goals may be particularly vulnerable to allegations of taxpayer-funded fraud.
Takeaways for In-House Counsel and Compliance Officers
Pay Attention to Early Enforcement Signals. Analysis of early NFED activity shows pronounced emphasis on pandemic relief fraud and healthcare/Medicaid fraud, with an emphasis on individual rather than corporate prosecutions.[3] This pattern provides valuable guidance for companies assessing fraud exposure. Organizations that operate in the government benefit or healthcare spaces or that receive federal funds and assistance should expect significant investigative resources focused on those areas.
Assess Exposure
The NFED’s mandate focuses on taxpayer-dollar fraud. Healthcare providers, government contractors, tax professionals, companies administering assistance programs, and businesses receiving tax credits or federal funds face elevated risk. Companies should evaluate whether their operations implicate federal funds, assistance, contracts, agreements, benefits, or tax obligations, and remember that exposure extends beyond direct conduct to include conduct by employees, contractors, or third parties.
Prioritize Compliance and Disclosure
DOJ’s Corporate Enforcement and Voluntary Self-Disclosure Policy remains the gold standard: effective compliance programs, robust detection capabilities, and prompt remediation earn favorable treatment. Critically, companies that voluntarily disclose misconduct within a reasonable time after discovery, before imminent government investigation, can receive a presumptive declination of prosecution. However, the NFED’s expanded resources may compress the window for favorable disclosure. Companies should establish decision-making processes enabling rapid assessment of whether discovered misconduct should be disclosed.
Prepare for Data-Driven Prosecution
The NFED emphasizes data-driven investigations. Companies facing investigations should expect intense scrutiny of document preservation, electronic communications, and financial records. The NFED's emphasis on nationwide coordination and asset recovery suggests civil remedies will be pursued aggressively alongside criminal charges. Individual accountability and cooperation remain important components of resolution strategies.
Act Now
For in-house counsel and compliance officers, the moment is now to proactively evaluate whether compliance programs are adequately resourced, whether internal audit and investigation capabilities are sufficient, and whether data analytics systems can identify anomalous activity that might signal fraud.
The creation of NFED represents a potentially meaningful escalation in federal fraud enforcement. With expanding resources, sophisticated data analytics, and a whole-of-government approach to coordination, the NFED may pursue fraud schemes more effectively than in the past. For in-house counsel and compliance officers, the priorities are clear: assess organizational exposure, evaluate and strengthen compliance and detection infrastructure, and establish processes that can enable prompt disclosure if misconduct is discovered. DOJ has signaled what it will prosecute and the path to favorable treatment. Companies that align their compliance posture accordingly will be best positioned to manage fraud risk and achieve favorable outcomes.
Endnotes
[1] Ben Penn, DOJ Renames Fraud Section Following White House Driven Shakeup, Bloomberg L. (Aug. 10, 2026), https://news.bloomberglaw.com/us-law-week/doj-renames-fraud-section-following-white-house-driven-shakeup [https://perma.cc/TCT6-6KDC].
[2] For example, Diversity Equity and Inclusion (“DEI”) programs have come under intense federal scrutiny under the FCA as evidenced by the myriad of Executive Orders, DOJ policy directives, and government-wide enforcement activity. Investigating and prosecuting “unlawful” DEI as “fraud” under the FCA is just one illustration of the government’s expansive discretionary enforcement authority.
[3] Early Signs Indicate DOJ’s Priorities for Fighting Fraud, FTI Consulting (July 24, 2026), https://www.fticonsulting.com/insights/articles/early-signs-indicate-doj-priorities-fighting-fraud [https://perma.cc/4LXG-DEB2].
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The Health Law Advisor blog is currently edited by Emily Chi Fogler.
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