DOJ Fraud Division Issues New Corporate Enforcement Priorities

Assistant U.S. Attorney General (AAG) Colin McDonald on October 1, 2026, issued Directive 26-12, "Corporate Enforcement in the Fight Against Fraud," establishing new enforcement priorities and procedures for the U.S. Department of Justice's (DOJ) National Fraud Enforcement Division (NFED). The directive identifies four categories of fraud as enforcement priorities: 1) healthcare fraud, 2) public trust and financial integrity (i.e., procurement, government contracts), 3) significant evasion of internal or external revenue, and 4) tariff evasion, importation of goods or services, or forced labor.

The directive signals a continued effort by the administration to shape white collar enforcement following the creation of the National Fraud Enforcement Division on April 7, 2026. (See Holland & Knight's previous alert, "DOJ Establishes National Fraud Enforcement Division," April 15, 2026.) Among other things, the directive suggests greater sensitivity to legitimate business interests, with AAG McDonald stating that the Fraud Division "will also firmly guard against overbroad corporate enforcement – rightly dividing between shades of corporate malfeasance – lest we interfere with legitimate business operations." The memorandum emphasizes that DOJ "must protect law-abiding companies and appropriately credit those that demonstrate a willingness to disclose misconduct, cooperate, and remediate."

Critically, this directive's reach is limited: It applies only to cases supervised by the DOJ's Fraud Division and does not extend to matters handled exclusively by U.S. Attorney's Offices (USAOs). Companies facing USAO-led investigations may encounter different enforcement approaches and priorities than those set forth in this directive. That said, the directive leaves open a pathway for broader influence, stating that the "Corporate Enforcement Section can serve the U.S. Attorney network on fraud matters where helpful to the Department's overall mission."

What's Changing

New Charging and Resolution Factors

Although existing Justice Manual standards remain in effect,¹ prosecutors "must place great weight" on the following 10 new factors when deciding whether to charge a corporation and when negotiating plea agreements or other resolutions:

1. Knowledge of or involvement in the 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 furthering the scheme lasting three years or more
4. Actions threatening the safety or security of Americans, including military readiness
5. Conduct causing substantial financial hardship to a taxpayer-funded program or government function
6. Conduct affecting multiple taxpayer-funded programs or government functions
7. Conduct affecting three or more federal districts
8. Financial harm to 25 or more victims or loss of $25 million or more
9. Exfiltration of American dollars to support foreign adversaries
10. Immigration offenses

This list is non-exhaustive; prosecutors may consider other relevant factors consistent with the Justice Manual.

Whistleblower Incentives

The directive also advances DOJ's continued emphasis on whistleblower activity, instructing Division leadership, in consultation with law enforcement partners, "to design and implement policies and programs that appropriately incentivize whistleblowers to bring forward credible information pertaining to fraud and provide the public with transparency to the extent possible." The potential impact is significant: If employees across all industries can receive financial awards for reporting fraud, companies should expect increased reporting and enforcement activity.

Centralization of Corporate Investigations

The directive centralizes oversight within the NFED's Corporate Enforcement Section (CES):

• Within seven days of issuance, all Fraud Division prosecutors must report any ongoing corporate investigations to the Chief of the CES.
• The CES must be notified of all new corporate investigations and major developments in existing matters.
• The CES has primary responsibility for monitoring compliance with corporate resolutions (e.g., deferred and non-prosecution agreements).

Notably, the directive states that this "division of labor" will "free up resources in the prosecuting sections to pursue additional individual and corporate cases and allow corporate enforcement experts to assess compliance with corporate resolutions consistently across the division." This follows earlier guidance moving away from corporate compliance monitors, suggesting that compliance oversight will now be centralized within the CES. In practice, this centralized structure may incentivize prosecutors to prioritize opening new investigations in priority areas, as line prosecutors are likely to be evaluated based on the number of cases they handle and the progress of those cases.

Key Takeaways for Companies

• Assess Exposure to Priority Areas and New Charging Factors: Companies operating in healthcare, government contracting, tax compliance and import/tariff spaces should review their compliance programs against the directive's four priority areas and 10 charging factors. Conduct involving management knowledge, concealment from regulators or multiyear schemes will draw heightened scrutiny.
• Evaluate Voluntary Self-Disclosure Under the CEP: The directive reaffirms that prosecutors must follow the Corporate Enforcement and Voluntary Self-Disclosure Policy. Companies that uncover potential fraud should carefully weigh the benefits of voluntary disclosure, cooperation and remediation – factors that can significantly influence charging and resolution decisions.
• Monitor Forthcoming Whistleblower Program Details: The directive orders new whistleblower policies to be designed and implemented. Companies should anticipate increased reporting as financial incentives expand – and should review internal reporting channels and response protocols accordingly. Companies also should watch for specifics on incentive structures, eligibility and reporting mechanisms.

Notes

¹ Prosecutors still must follow the Principles of Federal Prosecution of Business Organizations (JM 9-28.000, 9-28.300) and the Department-wide Corporate Enforcement and Voluntary Self-Disclosure Policy (CEP).

Information contained in this alert is for the general education and knowledge of our readers. It is not designed to be, and should not be used as, the sole source of information when analyzing and resolving a legal problem, and it should not be substituted for legal advice, which relies on a specific factual analysis. Moreover, the laws of each jurisdiction are different and are constantly changing. This information is not intended to create, and receipt of it does not constitute, an attorney-client relationship. If you have specific questions regarding a particular fact situation, we urge you to consult the authors of this publication, your Holland & Knight representative or other competent legal counsel.