The Department Of Justice Fraud Division Issues New Corporate Enforcement Directive: What Companies Need To Know

On October 1, 2026, Colin M. McDonald, Assistant Attorney General for the Department of Justice’s National Fraud Enforcement Division, issued a memorandum to all Fraud Division personnel outlining the Division’s approach to corporate enforcement going forward. The directive signals an aggressive but calibrated enforcement posture, establishes a new centralized Corporate Enforcement Section, lays out prioritized fraud categories and charging factors, and previews new whistleblower incentive programs. Here is a breakdown of what the memo says and what it could mean for companies navigating fraud investigations.

The Corporate Enforcement Section

The memo opens stating that fraud against the government and American taxpayers is “ongoing and rampant,” and commits Fraud Division prosecutors to an “aggressive, all-tools approach” across the Division’s four core priority areas: health care, public trust, tax, and trade. The directive explicitly states that the Division intends to protect law-abiding companies and to reward those that disclose misconduct, cooperate, and remediate.

The directive centers on the Division’s new Corporate Enforcement Section (CES), which is responsible for consistent, fair, and effective prosecution of corporate crime Division-wide. Prosecutors must now report any ongoing corporate investigations to CES, notify CES of new corporate investigations and major developments in existing ones, and coordinate with CES on evaluating companies’ compliance with the terms of any corporate criminal resolution, including monitoring compliance program enhancements and disclosure obligations.

This centralization is designed to free up prosecuting sections to pursue additional cases while ensuring corporate enforcement expertise is applied consistently across matters.

Key Factors to Consider in Corporate Fraud Matters

Importantly, the memo identifies ten factors that Division personnel must give great weight to when deciding whether to bring charges or how to structure plea or resolution agreements.

1. Knowledge of or involvement in the fraud scheme by corporate management;
2. Efforts to conceal fraud from government agencies or auditors, or to impede government oversight;
3. Conduct that furthered the scheme for three years or more;
4. Conduct 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. Conduct resulting in harm to twenty-five or more victims, or $25 million or more in loss;
9. Conduct involving exfiltration of U.S. dollars to support foreign adversaries; and
10. Conduct involving immigration offenses.

The memo is careful to note this list is non-exhaustive, and prosecutors retain discretion to weigh other relevant factors consistent with the Justice Manual’s Principles of Federal Prosecution of Business Organizations and the Department-wide Corporate Enforcement and Voluntary Self-Disclosure Policy (CEP).

Promoting Whistleblower Disclosure of Misconduct to the Department

The directive also signals an expansion of whistleblower-focused policy. It cites the Division’s use of “state-of-the-art technology and data analytics” through the National Fraud Detection Center to generate leads. The memo directs Division leadership to design and implement new policies and programs to incentivize whistleblowers, including individuals who themselves participated in the underlying misconduct, to come forward with credible fraud information. The Department has committed to providing public transparency around these programs as they are developed.

Practical Takeaways for Companies

For companies, a few practical takeaways stand out:

• Expect more coordinated, resource-intensive scrutiny due to the centralized oversight by CES.
• Self-disclosure and cooperation remain valuable currency. The memo reiterates that companies that disclose misconduct, cooperate, and remediate will be credited under the CEP framework.
• Compliance programs in the four priority sectors face elevated risk. Health care, government contracting, tax, and trade/customs compliance programs should be reassessed against current enforcement priorities.
• Management involvement and concealment are red flags. The ten weighted factors make clear that evidence of management knowledge or efforts to obstruct oversight will materially affect charging and resolution outcomes.
• Finally, whistleblower exposure is increasing. With new incentive programs on the way, including for culpable insiders, companies should expect a higher likelihood that internal misconduct will reach the government’s attention.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.