Three developments since October 1 extend the buildout of DOJ’s fraud enforcement infrastructure that we covered in our prior post on the Fraud Division’s Priorities Memo and Strike Force expansion. First, Assistant Attorney General Colin M. McDonald of the National Fraud Enforcement Division (the Fraud Division) issued Directive 26-12, a memorandum on the Division’s corporate enforcement priorities (Corporate Enforcement Memo). Second, the U.S. Attorney’s Office for the Eastern District of Pennsylvania (EDPA) announced the creation of an Interagency Fraud Task Force (IFTF) combining the Fraud Division with 14 other federal agencies. Third, on October 7, AAG McDonald issued Directive 26-13, directing a comprehensive, all-tools approach across charging, asset recovery, cooperation, pretrial detention, and sentencing. Together, these developments continue DOJ’s effort to formalize both the substantive standards it will apply to fraud cases and the interagency infrastructure used to identify them.
The October 1 Corporate Enforcement Memo
Directive 26-12 directs Fraud Division prosecutors to “take an aggressive, all-tools approach to investigating and prosecuting our health care, government, tax, and trade fraud priorities.” DOJ’s announcement of the memo frames the Fraud Division’s mission as being “to prosecute fraud in the United States, no matter its size or complexity,” which it describes as “critical to restoring public confidence in the federal government’s ability to responsibly steward taxpayer dollars.” The announcement repeats the Government Accountability Office estimate cited in the Fraud Division’s August Priorities Memo that the federal government “loses between $233 billion to $521 billion annually to fraud.”
The memo identifies four priority categories for corporate investigations: schemes involving the health care industry, including health care fraud, controlled substance distribution, and violations of the Federal Food, Drug, and Cosmetic Act; schemes involving the public trust or financial integrity of Americans and markets related to procurement and government contracts; schemes involving significant evasion of internal or external revenue; and schemes involving tariff evasion, importation of goods or services, or forced labor. Health care appears first among the four categories, maintaining its position as a top enforcement priority after appearing second in the August memo (after public trust and financial integrity).
In charging and resolution decisions, the memo directs prosecutors to place “great weight” on 10 enumerated factors, described as “a non-exhaustive list of considerations.” These include whether corporate management knew of or was involved in the fraud; whether there were efforts to conceal fraud from government agencies or auditors; whether the conduct lasted three years or more; whether it affects three federal districts or more; and whether it causes financial harm to 25 or more victims or $25 million or more in loss.
Corporate Enforcement Section’s Expanded Role
The memo elaborates on the Corporate Enforcement Section AAG McDonald created earlier this year, describing its mandate to lead the Division’s work “to ensure the consistent, fair, and successful prosecution of corporate crime across the Division’s entire fraud portfolio.” Fraud Division prosecutors “shall work closely with the Corporate Enforcement Section at all phases of corporate investigations, from case intake through completion of any corporate resolution or litigation.” Notably, the memo sets a concrete deadline: within seven days of the directive, prosecutors must report ongoing corporate investigations to the Section’s Chief, who must also be notified promptly of new investigations and major developments. The Section additionally takes “primary responsibility for evaluating a company’s compliance with the terms of any corporate criminal resolution.”
The memo also addresses whistleblowers, directing Division leadership to “design and implement policies and programs that appropriately incentivize whistleblowers to bring forward credible information pertaining to fraud,” including from those “who participated in the criminal conduct.” This builds on existing data infrastructure; the memo notes the National Fraud Detection Center is already “proactively generating leads and opening new individual and corporate fraud investigations at a rapid pace.”
The EDPA Interagency Fraud Task Force
The same day, EDPA announced its own Interagency Fraud Task Force, consisting of the U.S. Attorney’s Office, the Fraud Division, and 14 other agencies, including the FBI, HHS Office of Inspector General, DEA, FDA Office of Criminal Investigations, Homeland Security Investigations, IRS Criminal Investigation, the U.S. Postal Inspection Service, and inspector general offices for Agriculture, Defense, HUD, Veterans Affairs, the Small Business Administration, the Social Security Administration, and the Treasury Inspector General for Tax Administration. The announcement states that “[t]hrough expanded data-sharing and investigative cooperation, the IFTF will focus on detecting, investigating, and prosecuting those who defraud and steal from American taxpayers.”
EDPA hosted the task force’s inaugural meeting on October 1, covering “cultivating all available criminal intelligence, innovating methods for identifying leads, and enhancing cross-agency collaboration and information sharing.” U.S. Attorney David Metcalf described the effort broadly, stating that “it is time to get everyone to the table and muster a total approach to identifying, investigating, and prosecuting government fraud.” The announcement ties the task force to the office’s 2025 Government Fraud Alliance and White-Collar Justice Program, and to the nationwide Task Force to Eliminate Fraud established under Executive Order 14395 and chaired by Vice President J.D. Vance.
The October 7 Comprehensive Approach Memo
Six days later, on October 7, AAG McDonald issued Directive 26-13, titled “A Comprehensive Approach in the Fight Against Fraud” (Comprehensive Approach Memo). The memo frames the stakes starkly, stating that “[c]riminal actors steal hundreds of billions of dollars from the American people every year,” and directs the Division to “mobilize all existing tools, deploy new tools, adopt innovative techniques, and steel their resolve to eliminate the fraud epidemic in our country.” It expressly builds on the August 13 Priorities Memo and the Corporate Enforcement Memo describing a mandate to “identify the full scope of the fraud schemes,” “hold accountable all persons and entities that knowingly enable, facilitate, conceal, or profit from those schemes,” and “disrupt and dismantle the networks, infrastructure, and financial channels on which those schemes depend.”
On charging, the memo instructs that in every case prosecutors should “assess whether there is reason to believe that a violation of the internal revenue laws has occurred” and, where appropriate, “invite IRS-CI to evaluate the tax dimensions of the criminal conduct.” It also directs the Public Trust and Financial Integrity Section to “target and prioritize securities fraud schemes and market misconduct” tied to government programs, foreign investment schemes, and health care, tax, or trade fraud, leveraging the National Fraud Detection Center to “correlate federal program, contract, and funding data against market activity.” A separate section directs prosecutors to evaluate consumer-focused charges, such as mail fraud, wire fraud, and identity theft, where they “best vindicate the full range of law-enforcement interests.”
On asset recovery, the memo directs prosecutors to “prioritize early seizure of fraud proceeds and early disruption of fraud schemes,” using tools such as restraining orders to freeze bank and cryptocurrency accounts, warrants to seize digital property used to commit or conceal fraud, and civil actions for injunctions and prejudgment remedies. As the memo puts it, “[w]e must take the profit out of fraud and disrupt the means by which criminals advance their schemes.”
The memo also directs prosecutors to “leverage proactive cooperators and undercover law enforcement operations,” while cautioning that “every cooperator must fully and truthfully accept responsibility for his or her criminal conduct,” including forfeiture and restitution. On pretrial matters, prosecutors are directed to “assess flight risk and danger early and throughout the case” and “seek an arrest warrant and detention in all appropriate circumstances,” given that fraud defendants often have “substantial financial resources, international connections, access to false identities or travel documents.”
Finally, the memo sets out sentencing advocacy principles, directing that prosecutors “must not be mechanical at sentencing” and must “vividly recount the greed, lies, and deception underlying the crimes of conviction.” Every sentencing presentation must address “the urgent need for general deterrence against fraud,” prosecutors should “seek all Guidelines enhancements supported by the facts and law,” and, where a sentence is unreasonable, prosecutors should consult with the Appellate Section on a possible government appeal.
Continuing the Enforcement Trajectory
All three memoranda extend themes from the Fraud Division’s August 13 Priorities Memo discussed in our prior post. The Corporate Enforcement Memo operationalized the Division’s commitment to “supercharging” its enforcement model through concrete obligations, including the seven-day reporting requirement and defined charging factors. The Comprehensive Approach Memo goes further, adding tax charges, early asset seizure, and general-deterrence-focused sentencing advocacy, each expressly tied back to the August Priorities Memo and the Corporate Enforcement Memo. The EDPA task force shows how the Division’s data-sharing ambitions and National Fraud Detection Center concept, referenced again in the Comprehensive Approach Memo, are being implemented at the district level. Health care’s continued presence across all three memoranda also reinforces the trajectory reflected in the Strike Force’s August expansion into Philadelphia, within EDPA’s own district.
Key Takeaways
- AAG Colin M. McDonald issued the Corporate Enforcement Memo on October 1, directing Fraud Division prosecutors to take “an aggressive, all-tools approach” to health care, government, tax, and trade fraud.
- This memo requires prosecutors to report ongoing corporate investigations to the Corporate Enforcement Section’s Chief within seven days and gives the Section primary responsibility for evaluating compliance with corporate resolutions.
- This memo also prioritizes four categories of corporate fraud schemes, led by health care, and directs prosecutors to weigh 10 factors, including concealment, duration, and scope, in charging and resolution decisions.
- EDPA’s new 16-agency Interagency Fraud Task Force pairs the U.S. Attorney’s Office and the Fraud Division with 14 other federal agencies to pursue “expanded data-sharing and investigative cooperation.”
- The EDPA task force builds on the office’s Government Fraud Alliance and White-Collar Justice Program and connects to the nationwide Task Force to Eliminate Fraud under Executive Order 14395.
- On October 7, AAG McDonald issued the Comprehensive Approach Memo, directing Fraud Division prosecutors to deploy a “comprehensive approach to combating, investigating, and prosecuting fraud,” including added tax charges, early asset seizure, proactive cooperator development, heightened pretrial detention posture, and new sentencing advocacy principles.
- Together, these developments show the Fraud Division building out both the substantive standards for fraud cases and the interagency infrastructure to identify them, continuing the trajectory described in our prior post on the August Priorities Memo and Strike Force expansion.
Implications for Companies
- Faster internal escalation. The seven-day reporting requirement means matters within the Fraud Division’s portfolio may receive centralized Corporate Enforcement Section visibility earlier in an investigation.
- Defined charging and resolution factors. Companies facing a Fraud Division investigation may want to evaluate their facts against the 10 factors the memo identifies as receiving “great weight,” including duration, scope, and concealment efforts.
- Compliance monitoring. Because the Corporate Enforcement Section now holds “primary responsibility” for evaluating compliance with corporate resolutions, companies under existing agreements may want to confirm their reporting channels align with the Section’s role.
- Broader data-sharing exposure. The EDPA task force’s 16-agency membership and focus on “expanded data-sharing and investigative cooperation” suggest information developed by one member agency may more readily reach others.
- Whistleblower risk. The memo’s direction to incentivize whistleblowers, including participants in the underlying conduct, suggests companies should consider the possibility of insider disclosures when evaluating internal reporting and investigation processes.
- Layered tax exposure. The Comprehensive Approach Memo directs prosecutors to assess potential tax violations “in every case” and invite IRS-CI involvement, so companies and individuals under investigation may want to evaluate the tax dimensions of the underlying conduct alongside the core fraud exposure.
- Earlier asset exposure. The Comprehensive Approach Memo’s emphasis on “early seizure of fraud proceeds” through restraining orders, seizure warrants, and civil injunctions means companies and individuals may face asset freezes or forfeiture actions before any charges are filed. Expect a separate blog post focused on this topic in the near term.
If you have questions about the Fraud Division’s memoranda, the EDPA Interagency Fraud Task Force, or compliance strategies in light of these developments, please contact Jody Rudman, Jonathan Porter, Kip Randall, or your Husch Blackwell attorney.