The National Fraud Enforcement Division is a new U.S. Department of Justice component established to investigate and prosecute federal fraud, including criminal tax offenses, trade fraud, fraud involving money paid to or owed by the United States, health plan and health care fraud, and controlled-substance diversion schemes.

The Division became effective August 24, 2026. Its nationwide mandate and data-driven enforcement model create a significant new federal focus for executives, professionals, companies, and other defendants accused of complex financial crimes.

Why Did the DOJ Create the National Fraud Enforcement Division?

The Department of Justice created the Fraud Division as part of a broader reorganization of federal fraud enforcement. The final rule gives the Fraud Division authority to handle or supervise six major categories of federal criminal cases:

• Criminal fraud generally, except specified antitrust cases
• Criminal violations of the internal revenue laws
• Trade fraud, including customs, tariffs, imports, and foreign commerce
• Crimes involving money owed to or paid by the United States
• Fraud or abuse involving health plans
• Health care fraud and controlled-substance distribution or diversion schemes

The Division's August 13, 2026, enforcement memorandum directs prosecutors to focus resources on five areas:

• Public trust and financial integrity
• Health care
• Internal revenue
• Global trade and commerce
• Corporate misconduct

The memorandum also directs the Division to use data analytics, financial forensics, nationwide coordination, and other technology to identify and prosecute fraud. DOJ announced that the Division would have approximately 500 attorneys and staff by August 24, 2026, with plans for further growth.

To complement the creation of the Fraud Division, the Department of Justice renamed the former Criminal Division Fraud Section to the White Collar and Corporate Enforcement Section.

This structural change delineates non-public-funds corporate matters, such as Foreign Corrupt Practices Act (FCPA) violations and market manipulation, from the new Fraud Division's specific mandate over public funds, tax, trade, and health care programs.

How Broad is the Fraud Division's Investigative Authority?

The Fraud Division can pursue crimes it discovers while investigating fraud, even when those additional crimes fall outside its main areas of responsibility. For example, investigators examining suspected government contract fraud might uncover evidence of:

• Money laundering,
• Obstruction,
• False statements, or
• Another federal offense. 

The Division does not necessarily have to hand those additional allegations to another DOJ unit. It can investigate and prosecute them as part of the same case.

The Division also has authority to seek more than criminal convictions. Depending on the case, prosecutors can ask a court to freeze assets connected to an alleged fraud scheme, pursue forfeiture of property, seek restitution for victims, recover money owed to the United States, and enforce judgments.

Put simply, an investigation that starts with one suspected fraud offense can expand as investigators examine financial records, communications, transactions, and other evidence.

A procurement fraud investigation, for example, could ultimately include charges for false statements, obstruction, or money laundering if investigators uncover evidence supporting those offenses.

What Enforcement Priorities Should Companies and Individuals Expect?

The Fraud Division's enforcement memorandum identifies specific sectors and conduct for increased attention. Government procurement fraud is expressly identified as a priority. The memorandum lists:

• Defective pricing,
• Bid rigging,
• Self-dealing,
• Bribery, 
• Product substitution, and
• Billing fraud. 

This is significant for defense contractors, government vendors, subcontractors, executives, and employees responsible for pricing, compliance, testing, invoices, or contract performance. Federal procurement fraud can also implicate 18 U.S.C. § 1031 and the False Claims Act, depending on the alleged conduct.

Health Care Enforcement

Health care enforcement includes Medicare and Medicaid fraud, telemedicine schemes, home health and hospice fraud, controlled-substance diversion, kickbacks, and deceptive marketing of health care products or services.

Providers and executives can face overlapping allegations under statutes such as 18 U.S.C. § 1347 and the Anti-Kickback Statute, 42 U.S.C. § 1320a-7b(b).

Criminal tax enforcement is now within the Fraud Division's assigned authority, including false tax returns, concealed income, and abusive tax schemes.

Global Trade and Commerce

Global trade and commerce is another stated priority. The Division plans to target illicit transshipment, country-of-origin fraud, undervaluation of imported goods, sanctions evasion, and foreign forced-labor schemes.

Companies with international supply chains may face scrutiny over customs records, product classifications, valuation, sourcing, and representations to federal agencies.

Corporate misconduct is also expressly included. The Department has said it will pursue corporate fraud while applying its policies on voluntary self-disclosure, cooperation, and remediation.

How Does the New Division Affect Corporate Investigations?

The Fraud Division's corporate focus is especially relevant when an investigation involves both a company and individual decision-makers.

The August 13 memorandum states that the Division will work with its Corporate Enforcement Section and apply DOJ policies concerning organizations, including voluntary self-disclosure, cooperation, and remediation.

That raises strategic questions about internal findings, information provided to investigators, and whether one employee's conduct can be attributed to the organization or other individuals.

Corporate records can also create separate criminal exposure. Allegations concerning deletion or alteration of records may lead to charges under 18 U.S.C. § 1519. Federal fraud investigations can also bring attention to financial reporting, internal communications, and electronic evidence.

Related Federal Fraud & White-Collar Defense Laws

Understanding the specific federal statutes governing fraud investigations is critical, as prosecutors often stack multiple statutory violations arising from a single course of conduct to maximize leverage, expand financial exposure, and increase potential prison penalties.

• Procurement Fraud & Major Fraud Against the United States (18 U.S.C. § 1031): Enforces severe criminal penalties, including up to 10 years in prison and fines reaching $5 million, for executing or attempting to execute a scheme to defraud the federal government on prime contracts or subcontracts valued at $1 million or more.

• Wire Fraud (18 U.S.C. § 1343): Prohibits using electronic communications, interstate wire transmissions, or digital financial networks to carry out a scheme to defraud, carrying maximum prison sentences of up to 20 years, or up to 30 years if the offense affects a financial institution.

• False Claims Act Criminal Provisions (18 U.S.C. § 287): Makes it a federal felony to knowingly present or cause to be presented false, fictitious, or fraudulent claims to any department or agency of the United States for payment or approval.

• Health Care Fraud (18 U.S.C. § 1347): Criminalizes knowingly and willfully executing a scheme to defraud any public or private health care benefit program, or obtaining money or property owned by or under the custody of a health care program, punishable by up to 10 years in prison (or up to life if the violation results in death).

• False Statements to Federal Investigators (18 U.S.C. § 1001): Penalizes knowingly and willfully making materially false statements, concealing material facts, or submitting fraudulent documentation to federal law enforcement agents or agency representatives during an investigation.

• Destruction, Alteration, or Falsification of Records (18 U.S.C. § 1519): Prohibits knowingly altering, destroying, mutilating, concealing, or falsifying any document or record with the intent to impede, obstruct, or influence an ongoing or contemplated federal investigation, carrying penalties of up to 20 years in prison.

Hypothetical Case Study: National Fraud Enforcement Division Procurement Investigation

A technology company receives more than $120 million in federal contracts to supply cybersecurity equipment to several agencies.

The National Fraud Enforcement Division opens an investigation after data analysis shows that the company repeatedly billed the government for U.S.-manufactured components while purchasing lower-cost components through overseas suppliers.

Prosecutors suspect possible procurement fraud, false statements, wire fraud, and customs violations. The evidence against the company's chief operating officer appears substantial.

He approved supplier contracts, signed certifications concerning domestic sourcing, and received an email from the procurement director warning that one supplier was shipping components through a third country.

Another email from the COO tells employees to "keep the origin issue away from the customer until we have this fixed." Several months later, the company continued submitting invoices under the federal contracts.

Case Review By Lawyers at Eisner Gorin LLP

At Eisner Gorin LLP, our team cannot reasonably treat those communications as harmless. Instead, they determine exactly what the COO knew when each certification and invoice was submitted.

The underlying records show that the "origin issue" referenced in the email concerned whether final assembly satisfied a contractual sourcing requirement, not whether employees were concealing the actual manufacturer.

Supplier certifications provided to the COO identified the components as compliant. Customs records also show that the overseas manufacturer changed its production arrangement during the contract period without updating certifications supplied to the company.

Reconstruct Timing of Shipments

Our attorneys then reconstruct the timing of the disputed shipments, certifications, supplier representations, internal communications, and payments.

That chronology shows the COO stopped approving purchases from the supplier within days of receiving documents showing its prior sourcing representations were false.

It also establishes that several invoices identified by prosecutors were generated automatically from purchase orders approved before he received that information.

While automated billing software helps demonstrate that the executive did not manually generate individual noncompliant invoices, automated systems do not automatically shield an executive from liability.

Federal Prosecutors Seek Liability

Prosecutors can still assert liability under theories of deliberate ignorance or reckless disregard if an officer turns a blind eye to red flags while automated billing continues.

Our attorneys must show that the executive took immediate, affirmative steps to halt or correct the process upon discovering the defect, thereby negating the requisite criminal intent.

The company still faces substantial exposure because it submitted inaccurate certifications to federal agencies and the government paid invoices tied to noncompliant components.

The COO presents a different criminal liability question. The records undermine the government's theory that his emails showed a deliberate plan to obtain federal money through false sourcing representations.

Fraud Division Declines Criminal Charges

After our attorneys present the complete chronology, supplier records, and contract documents to prosecutors, the Fraud Division declines to charge the COO with procurement fraud, wire fraud, or false statements.

The company separately resolves the government's claims concerning the noncompliant components and inaccurate certifications.

The outcome keeps the strongest evidence against the executive in context, rather than letting two damaging emails and his signature authority define his role in a complex corporate investigation.

Frequently Asked Questions (FAQs)

Understanding the scope and investigative tools of the Department of Justice's National Fraud Enforcement Division is critical for managing corporate legal exposure, responding to federal inquiries, and protecting individual executive rights.

What is the National Fraud Enforcement Division?

The National Fraud Enforcement Division is a specialized component within the U.S. Department of Justice created to streamline, investigate, and prosecute complex federal fraud crimes, including health care fraud, criminal tax violations, trade and customs fraud, and public procurement schemes.

How does the new division use data analytics in fraud investigations?

The division employs advanced financial forensics and data analytics software to actively identify anomalies, billing irregularities, and suspicious transactional patterns across vast databases before traditional whistleblower or law enforcement reports are submitted.

Can the Fraud Division prosecute crimes outside of its primary focus areas?

Yes, the division possesses broad authority to investigate and prosecute secondary federal offenses uncovered during a fraud inquiry, such as money laundering, wire fraud, obstruction of justice, or making false statements to federal agents.

How does creating this division affect corporate executives and officers?

Executives face heightened individual exposure because federal prosecutors aggressively examine internal communications, compliance records, and automated billing approvals to determine personal knowledge and intent during procurement or financial reporting audits.

What should a company do when it receives a subpoena from the Fraud Division?

A company should immediately engage experienced federal white-collar defense counsel, issue a formal legal hold to preserve all relevant electronic records, and avoid conducting informal internal interviews before establishing a strategic defense plan.

Does voluntary self-disclosure protect a company under the new enforcement model?

Voluntary self-disclosure under Department of Justice guidelines can substantially mitigate corporate criminal exposure, potentially leading to reduced fines, non-prosecution agreements, or declining to file formal criminal charges if defense counsel handles it properly.

How Eisner Gorin LLP Can Help You

When the Department of Justice launches a high-stakes investigation under the National Fraud Enforcement Division, early, strategic intervention is vital. 

At Eisner Gorin LLP, our federal defense attorneys bring extensive courtroom experience and deep insight into federal investigative operations.

Here is how our firm protects companies, executives, and individuals facing scrutiny from the Fraud Division:

• Targeted Internal Investigations: We conduct rapid, confidential internal reviews to uncover the facts, assess document trails, analyze billing software and electronic communications, and identify compliance gaps before federal prosecutors take action.

• Grand Jury & Subpoena Response: We help corporate clients and individuals navigate federal subpoenas, grand jury proceedings, Civil Investigative Demands (CIDs), and search warrants—ensuring full legal compliance while aggressively protecting constitutional rights and attorney-client privileges.

• Proactive Defense & Advocacy Before Prosecutors: By reconstructing chronologies, supplier certifications, and transactional histories, we build compelling evidentiary packages to demonstrate a lack of criminal intent, push for declination of charges, or negotiate favorable resolutions.

• Voluntary Self-Disclosure & Remediation Strategy: When misconduct is identified internally, we advise boards and leadership on the strategic risks and benefits of DOJ voluntary self-disclosure programs, helping organizations mitigate fines, avoid corporate indictments, and implement effective compliance remedies.

• Aggressive Trial Representation: If federal prosecutors choose to move forward with indictment, our trial team provides formidable courtroom defense across complex white-collar, tax, procurement, health care, and trade fraud charges.

Schedule your consultation by calling (818) 781-1570 or filling out the contact form. Our law firm is based in Los Angeles.