DOJ’s New Fraud Division
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The Department of Justice has a new sheriff in town – the National Fraud Enforcement Division (“NFED”), which last month assumed operational control of multiple Criminal Division sections, most notably those focused on public-sector fraud. The latest crime buster has a centralized mandate – to combat the “fraud epidemic gripping the country”; use a data-driven arsenal; and reward those who come forward first. Announced in April 2026, NFED consolidates resources from DOJ components into a Washington, D.C.-based team of approximately 500 prosecutors, investigators, corporate enforcement experts, and asset recovery personnel to systematically fight public-sector fraud. The National Fraud Detection Center (“NFDC”), a prosecutor-led team launched on August 24, 2026, supports NFED’s mission by combining law enforcement agencies and analytical capabilities to detect fraud the current DOJ believes past administrations missed due to a fragmented approach to enforcement. Together, the NFED and NFDC promise aggressive, proactive enforcement, while the DOJ’s department-wide Corporate Enforcement Policy (“CEP”) continues to offer incentives, including declinations. NFED already has announced one declination, and 17 new cases involving federal program and tax fraud. The prudent course for companies is to take NFED seriously and be prepared to make self-disclosure decisions quickly, even as questions remain about NFED’s jurisdiction and effect on DOJ priorities.
The NFED represents a significant transfer of enforcement responsibility for public-sector fraud from the Criminal Division’s Fraud Section (recently renamed the White Collar and Corporate Enforcement Section (“White Collar Section”)), yet the jurisdictional division between public-sector fraud and private sector economic crimes is far from clear. The NFED assumed operational control over the Criminal Division’s Tax Section, Health Care Fraud Unit, and the Market, Government, and Consumer Fraud Unit, but includes a Corporate Enforcement Section with an enforcement priority of rooting out corporate misconduct. The question emerging for companies is whether NFED’s stated focus (procurement, grant and benefit programs, health care, and tax fraud) will shift enforcement risk away from private sector economic crimes, or simply repackages enforcement tools and priorities DOJ has used for years.
NFED: A Centralized, Data-Driven Fraud Fight
NFED brings the Health Care Fraud Section, Public Trust and Financial Integrity Section, Tax Section, and others, under one roof. The “core mission” of NFED, Attorney General Todd Blanche explained when he announced the new Division, is to “zealously investigate and prosecute those who steal or fraudulently misuse taxpayer dollars.” On August 13, 2026, the NFED’s first Assistant Attorney General, Colin M. McDonald, issued a memorandum identifying the Division’s five enforcement priorities: (1) public trust and financial integrity, including government procurement and benefits fraud; (2) health care fraud; (3) tax; (4) global trade and commerce; and (5) corporate misconduct. The memorandum also includes an organizational chart showing the new sections, including a Corporate Enforcement Section and NFDC.
Despite the new names, NFED is not starting from scratch. The new Division inherits substantial enforcement programs, personnel, and a pipeline of matters from the sections it absorbs. The existing foundation gives NFED significant reach from the outset and allows the Division to bring together expertise previously spread across DOJ components or simply not available. A newly created section within the NFED, the Global Trade & Commerce Enforcement Section, will lead the Administration’s focus on trade fraud and customs evasion. To do so, that section will utilize the Department of Homeland Security and DOJ Trade Task Force prosecutors who have surpassed $1 billion in recoveries and “publicly charged losses” in less than one year.
NFED also promises a more data-driven approach, using analytics, technology, and government and commercial data to identify otherwise hidden misconduct. The NFDC, announced on August 24, 2026, supports that effort through cross-agency resources. Participating agencies include the FBI, Homeland Security Investigations, IRS Criminal Investigation, FinCEN, and the Office of the Inspector General. The NFDC also has begun collaborating with state-level participants to make fraud enforcement more proactive and consistent across jurisdictions.
The NFED’s Holes and Overlaps
The NFED considers itself “the Fraud Division,” with significant resources, personnel, and prosecution authority, but the new Division did not completely subsume the Criminal Division’s former Fraud Section. The White Collar Section (formerly the Fraud Section) will focus on “sophisticated economic crime and other forms of complex misconduct that endanger public health and safety.” The Section retains the Foreign Corrupt Practices Act (“FCPA”) Unit, the Health and Safety Unit, the Securities, Market, and Private Fraud Unit, the Filter and Special Projects Unit, as well as the Corporate Enforcement and Compliance (“CEC”) Unit.
The CEC Unit’s location within the White Collar Section is not surprising given the Section’s focus on private sector economic crime, but what remains unclear is how the NFED’s Corporate Enforcement Section will differ, if at all. AAG McDonald’s August 13 memorandum states that the NFED will prioritize prosecuting corporate misconduct, and the NFED already has a “strong pipeline of ongoing corporate matters.” NFED’s prioritization of rooting out economic crimes by corporations “eager to benefit financially from the criminal conduct of their employees” is an outlier among NFED’s other priorities of combatting fraud against the federal government.
The FCPA Unit’s existence within the White Collar Section is another interesting aspect of the NFED’s organization. The Administration’s more targeted FCPA priorities and decrease in FCPA Unit staffing make a material increase in FCPA enforcement unlikely, but the continued existence of the FCPA Unit signals that FCPA enforcement is not going away.
The Jurisdictional Effect on Corporate Enforcement Policy Incentives
How the division of responsibility for corporate misconduct plays out will take time, but companies immediately face a practical question: which entity should receive a self-report of misconduct under the department-wide CEP to potentially receive a declination of prosecution? AAG McDonald has emphasized NFED’s commitment to applying the CEP to companies that meet the Policy’s requirements: voluntary self-disclosure of misconduct, cooperation with the government, and prompt remediation. NFED’s first declination involving Campus Eye Management and the company’s disclosure of healthcare fraud suggests the self-disclosure framework is operational and not just a promise on paper. If NFED and the White Collar Section both claim responsibility for corporate misconduct, however, companies must guess where to disclose to access the CEP’s incentives.
A single matter may involve both NFED and the FCPA Unit – for example, conduct tied to a government-funded program and possible bribery abroad. The overlap creates practical uncertainty: when misconduct could fall within both groups’ jurisdiction, companies considering self-disclosure must decide where and when to report. NFED may centralize much of DOJ’s fraud work, but the FCPA carve-out and overlapping corporate-misconduct jurisdictions mean the reporting map is not always simple.
The More Law Enforcement Changes, the More It Stays the Same
Experienced white-collar practitioners will recognize much of the new Division’s agenda as a repackaging of longstanding enforcement priorities. Health care fraud and financial integrity have long been DOJ staples, and emphasizing corporate misconduct is similarly unremarkable, though surprising given NFED’s core mission. Whether DOJ shifts away from private sector economic crimes remains to be seen, but the overlap between NFED and the White Collar Section’s jurisdiction makes that unlikely. The promise of “data-driven” enforcement also is hardly new: DOJ’s Fraud Section and various U.S. Attorney’s Offices have used analytics in fraud investigations for years, particularly in health care and procurement fraud.
Potentially, the NFED’s breadth distinguishes it from previous DOJ reorganizations. Earlier task forces and initiatives, including the Health Care Fraud Strike Force and the Kleptocracy Asset Recovery Initiative, targeted specific fraud types and left the broader fraud landscape fragmented. NFED instead claims jurisdiction across much of the public sector fraud spectrum (plus corporate fraud), and is expected to expand its approximately 500 attorneys and staff over the next two years. If DOJ fulfills its stated ambitions, which seems possible given the significant financial and manpower investment thus far, companies could face a more coordinated, resource-rich adversary than in the past.
Looking Ahead: Significant, but Not Revolutionary
NFED is an important institutional development, but is unlikely to result in an enforcement revolution. DOJ has reorganized fraud enforcement before, and history counsels skepticism about grand announcements of a new enforcement era. NFED’s impact will depend on whether the new Division’s structure and data-driven approach produce materially different results. If the NFED follows through on its mission, the CEP offers meaningful incentives – not guarantees — under the new regime, and companies should carefully consider where to report misconduct.
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