DOJ’s New National Fraud Enforcement Division Pledges to Ratchet up Resources

On August 13, 2026, Assistant Attorney General Colin M. McDonald issued a memorandum outlining the enforcement priorities of the National Fraud Enforcement Division (the “Fraud Division”)—the new standalone DOJ litigating division that has absorbed vast resources from the Criminal Division's former Fraud Section. Corporate clients should take note: this is not just a rebranding exercise. It represents a dramatic movement of the federal government’s fraud enforcement power base out of the Criminal Division—where it resided for decades—and into a new, standalone division stood up only months ago.  In addition, the Department of Justice has committed to increasing the Fraud Division considerably over the next two years.

A Wholesale Transfer of Power—and Rapid Expansion

The Criminal Division’s Fraud Section peaked at approximately 200 lawyers in 2025. In April 2026, Acting Attorney General Todd Blanche ordered essentially the entire fraud apparatus transferred out of the Criminal Division: the Health Care Fraud Unit, the Market, Government, and Consumer Fraud Unit, and the Tax Section were all moved wholesale into the new Fraud Division. The Blanche memorandum applied a “reasonable presumption” that any criminal unit with a similar mission would be absorbed—leaving little of the old Fraud Section’s portfolio behind.

Four months later, McDonald's memo confirms the Division will reach “approximately five hundred attorneys and staff by August 24, 2026”—appearing to surpass the Fraud Section’s peak. And McDonald signals this is only the beginning: “The Division will not stop there. With the support of Department leadership, we will continue to rapidly grow for the next two years.” Companies should expect a substantially larger fraud enforcement apparatus through 2028.

Priority Areas

The Fraud Division will prioritize: (1) public trust and financial integrity—including procurement fraud, bid rigging, and benefit/grant program abuse; (2) health care fraud—including telemedicine schemes, Medicare/Medicaid fraud, and controlled substance diversion; (3) internal revenue violations; (4) global trade and commerce—including customs evasion, sanctions evasion, and forced labor supply chains; and (5) corporate misconduct.

Corporate Enforcement Section: Embedded Within the Fraud Division

The memo confirms that prosecutors will “prioritize anti-fraud corporate enforcement and work closely with our Corporate Enforcement Section.” That section now sits within the Fraud Division itself—not in the Criminal Division as before. Corporate enforcement experts will “ensure that appropriate resources are committed to combating fraud by corporations and that prosecutors fairly and consistently apply the Department’s policies concerning the prosecution of organizations.” Corporate investigations will now benefit from the same data analytics, financial forensics, and nationwide coordination deployed across all Fraud Division matters.

Takeaway

The Fraud Division’s trajectory—from concept in January 2026, to formal creation in April, to a 500-person division by late August with aggressive two-year growth targets—signals an aggressive enforcement posture. Companies should reassess compliance programs, voluntary self-disclosure postures, and cooperation strategies, because it appears federal fraud enforcement is poised to increase considerably.