DOJ Establishes National Fraud Enforcement Division to Target Healthcare and Taxpayer Programs

April 13, 2026

DOJ Establishes National Fraud Enforcement Division

Christopher Conniff, James Dowden, María González Calvet, Amy Kossak, Joshua S. Levy, Andrew O'Connor, Alex Rene, Ryan Rohlfsen Ropes & Gray LLP + Follow Contact LinkedIn Facebook X Send Embed

On April 7, 2026, Acting Attorney General Todd Blanche issued a memorandum (the “Memorandum”) formally establishing the National Fraud Enforcement Division (“Fraud Division”) within the Department of Justice. Although the Division was first announced in January, the April 7 Memorandum and Acting Attorney General Blanche’s accompanying press conference provided the first real insights into the Division’s structure, focus, and operational framework. This Alert summarizes the Memorandum’s directives and provides our key takeaways on what these developments may mean for companies facing potential enforcement exposure.

Summary of the Acting AG’s Announcement

The Memorandum describes the Fraud Division’s core mission as the investigation and prosecution of those who “steal or fraudulently misuse taxpayer dollars.” The Division will coordinate with agencies that administer benefit programs, partner with federal, tribal, state, territorial, and local law enforcement, develop systems to identify fraud against taxpayer-funded programs, and equip prosecutors with what the Memorandum describes as “state-of-the-art tools and resources.”

The Memorandum directs several immediate and near-term actions in support of those efforts. Effective immediately, the Assistant Attorney General for the Fraud Division, Colin McDonald, assumed operational control of three existing Criminal Division units: the Tax Section, the Health Care Fraud Unit, and the Market, Government, and Consumer Fraud Unit. Within 30 days, the Office of Legal Policy is directed to recommend which additional criminal prosecutorial resources should be realigned into the Fraud Division, applying a “reasonable presumption” that any criminal unit or section with a mission similar to the Fraud Division’s will be absorbed into it. In addition, within 120 days, the Office of Legal Policy must also recommend whether noncriminal elements of the Department should be brought within the Fraud Division.

The Memorandum also directs each of the 93 U.S. Attorney’s Offices to designate an experienced prosecutor to be detailed-in-place to the Fraud Division within 21 days, with that detailee responsible for administering the Division’s mission in their respective district. Each U.S. Attorney is further directed to ensure that fraud investigations and prosecutions are “adequately staffed and diligently pursued” beyond the work of the detailee.

Additionally, within 14 days, the Criminal Division and the Executive Office for United States Attorneys (EOUSA) must report to the Fraud Division all ongoing fraud investigations that have been referred to DOJ prosecutors, as well as significant events (such as complaints, indictments, guilty pleas, trials, or sentencings) expected to occur in the next 90 days in fraud matters.

The Memorandum also calls for the establishment of a National Fraud Detection Center—in coordination with law enforcement agencies, agency inspectors general, and members of the Task Force created by the Executive Order titled “Establishing the Task Force to Eliminate Fraud”—to identify fraud across taxpayer-funded programs and generate leads. The FBI is directed to coordinate with the Fraud Division to ensure sufficient investigative resources, including agents, analysts, and forensic accountants.

Finally, the memorandum directs the Office of Legal Policy to, within 90 days, review relevant laws, regulations, and guidelines bearing on fraud investigations, prosecutions, and penalties, and provide recommendations for strengthening them.

Key Takeaways

1. Heightened Focus on Fraud

This announcement signals a continued and potentially heightened commitment to fraud enforcement. At his press conference, Acting Attorney General Blanche described the Division’s creation as a response to a national crisis of fraud costing taxpayers billions of dollars. Although there remains substantial uncertainty around the new Division’s operations and priorities, the announcement makes clear that DOJ remains focused on fraud even as other DOJ priorities are shifting.

The Memorandum’s requirement that the Criminal Division and EOUSA report on all ongoing fraud investigations is notable in this regard. Such reporting gives Main Justice—through the Fraud Division—a window into the landscape of federal fraud enforcement activity across the country and may signal a move toward greater Main Justice involvement in, or prioritization of, individual cases. The reporting mechanism could also increase institutional pressure on U.S. Attorney’s Offices and other litigating units to post strong metrics—the volume of investigations, charges, or monetary recoveries—as prosecutors seek to demonstrate their responsiveness to Main Justice priorities.

Greater Main Justice involvement across the board in fraud cases, many of which were previously handled exclusively in U.S. Attorney’s Offices, may affect the dynamic for seeking appeals of charging decisions in large fraud cases. The repeated emphasis on losses to “taxpayers” also raises the question of whether fraud scams that victimize individuals (e.g., market manipulation, elder fraud, crypto schemes) will retain the same priority under the reconstituted fraud effort, which may be driven instead by high-profile government fraud prosecutions.

2. Detection Center Signals More “Data-Driven” Enforcement

In recent years, DOJ, the Centers for Medicare and Medicaid Services, and other enforcement agencies have described the growing role of data mining in initiating fraud investigations. The creation of a National Fraud Detection Center appears to reinforce that trend. Acting Attorney General Blanche described the center as a “permanent prosecutor-led multi-agency data analytics team working to ferret out the most harmful actors defrauding federal government programs.” The announcement suggests that DOJ may increase its systematic use of billing and other financial data across federal agencies to generate its own investigative leads. For corporate defendants—particularly those in health care and government contracting—this means that billing anomalies or other statistical outliers may trigger investigations before any whistleblower complaint is filed. Companies should evaluate whether their internal compliance monitoring and data analytics efforts are sufficiently sophisticated to identify the kinds of patterns enforcement authorities will be looking for.

3. More Complex, Multijurisdictional Cases

The Memorandum envisions the Fraud Division as a hub for coordinated enforcement across federal, tribal, state, territorial, and local jurisdictions. The directive to establish or refocus grant programs that enable state and local prosecutors to join the Fraud Division’s mission as Special Attorneys or Special Assistant U.S. Attorneys is a concrete effort to boost both capacity and coordination. Combined with directives to designate a fraud detailee in all U.S. Attorney’s Offices and to partner with law enforcement at every level of government, this framework is designed to produce enforcement actions that span multiple jurisdictions and leverage overlapping federal and state authorities.

Whether such extensive coordination will lead to more effective prosecutions or simply more bureaucracy remains to be seen. But for companies facing investigations, it may lead to increasingly complex investigations across multiple federal offices and between federal and state authorities, complicating defense efforts and increasing the potential for parallel proceedings.

4. False Claims Act Enforcement Will Remain Separate—For Now

The Memorandum does not direct that the Civil Division’s Fraud Section— the unit responsible for the government’s affirmative False Claims Act (FCA) investigations and litigation—be moved into the new Fraud Division. Instead, the Civil Division is directed to designate a “liaison” to the Fraud Division to ensure DOJ “leverages the full range of enforcement tools—civil and criminal—to combat fraud against taxpayer dollars.” However, the Memorandum expressly contemplates that this arrangement may be temporary: the Office of Legal Policy is directed to recommend within 120 days whether “non-criminal elements of the Department should be brought within the National Fraud Enforcement Division.”

This means that, for now, FCA enforcement will continue to be directed from the Civil Division and that the Civil Fraud Section will remain a distinct center of gravity for fraud enforcement—with seemingly overlapping goals as the new Fraud Division but different management.

5. New Laws and Guidance May Be on the Horizon

The Memorandum directs the Office of Legal Policy to review “relevant laws, regulations, and guidelines bearing on fraud investigations, prosecutions, and penalties” within 90 days and to “provide recommendations to the Deputy Attorney General for strengthening” them. That effort could lead to proposals for increased penalties, expanded forfeiture provisions, longer statutes of limitations, or changes to the Justice Manual that governs how the DOJ exercises its prosecutorial discretion. While the review could alter the risk assessment for any company involved with taxpayer-funded programs, the DOJ’s capacity to implement significant changes in the short term is limited; broader reforms would require action by Congress or the relevant federal agencies.

6. Built-In Forfeiture and Money Laundering Expertise

The Memorandum directs the Criminal Division’s Money Laundering, Narcotics and Forfeiture Section, as well as the Criminal Appellate Section and filter teams, to support, advise, and litigate on behalf of the Fraud Division. While that directive may be driven in part by the immediate need to staff an entirely new division, it means that Fraud Division prosecutors will have ready access to forfeiture and money laundering expertise as a built-in feature of their enforcement toolkit. For corporate defendants, this may signal an increased ability and willingness by DOJ to use criminal forfeiture, civil asset forfeiture, and money laundering charges as accompaniments to fraud prosecutions.

Looking Ahead

The Fraud Division’s establishment represents a significant reorganization of DOJ’s fraud enforcement apparatus. While the full contours of the Fraud Division will take shape over the coming months, the Memorandum’s direction is clear: the Department intends to centralize, expand, and intensify its approach to fraud against taxpayer-funded programs.

We will continue to monitor developments as the Fraud Division takes shape and will provide updates as additional details emerge.

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DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.
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