On October 1, 2026, the United States Department of Justice (DOJ)’s National Fraud Enforcement Division (Fraud Division) issued Directive 26-12: Corporate Enforcement in the Fight Against Fraud (Directive), instructing prosecutors to take an “aggressive, all-tools approach” to investigating and prosecuting alleged fraud related to healthcare, government contracts, tax, and international trade. The Directive also states that the Fraud Division’s corporate enforcement work should provide transparency, incentivize disclosure of misconduct, reward cooperation, hold individuals and corporate criminals accountable, and promote recovery of fraudulent proceeds.
In addition, the Directive identifies ten “great weight” factors that DOJ will consider in assessing cases and culpability – including management involvement, concealment, duration, geographic and financial scope, funding of foreign adversaries, and immigration offenses – and establishes a central role for the Fraud Division’s Corporate Enforcement Section.
Finally, the Directive adds to the Department-wide Corporate Enforcement and Voluntary Self-Disclosure Policy (CEP), which we discussed in a previous client alert.
The intersection between the Directive and the CEP
The Directive reemphasizes that DOJ policy is to hold criminal entities and individual executives accountable while protecting law-abiding companies. The Directive also reaffirms DOJ’s intention to appropriately credit those that demonstrate a willingness to disclose misconduct, cooperate, and remediate. The Directive states that the Fraud Division will “zealously prosecute” corporate actors that defraud taxpayers and the US, while also seeking to “firmly guard against overbroad corporate enforcement” to avoid interfering with legitimate business operations.
The Directive is the latest in a series of recent developments establishing the Fraud Division’s structure and priorities. In August 2026, DOJ issued a restructuring memo outlining plans to move approximately 500 attorneys and staff to the Fraud Division from other DOJ areas and US Attorneys’ offices. This reorganization has included transferring the Criminal Division Fraud Section’s Health Care Fraud Unit and much of its Market, Government, and Consumer Fraud Unit to the new Fraud Division.
The CEP, released March 10, 2026, provides a Department-wide framework that applies to all corporate criminal matters handled by DOJ, except for violations of 15 U.S.C. §§ 1–38 (antitrust matters). The Directive requires Fraud Division prosecutors to follow the Principles of Federal Prosecution of Business Organizations (see, e.g., Justice Manual (JM) § 9-28.000) and the CEP, and to familiarize themselves with DOJ’s policies regarding the prosecution of business organizations before opening or joining any corporate investigation or prosecution.
Key elements of the Directive
Centralized oversight. The Directive gives the Corporate Enforcement Section a central role in the Fraud Division’s corporate matters, tasking it with leading the Fraud Division’s work to ensure the consistent, fair, and successful prosecution of corporate crime across the entire fraud portfolio. Fraud Division prosecutors are now formally directed to work closely with the Section at all phases of corporate investigations. The Section will also have “primary responsibility for evaluating a company’s compliance with the terms of any corporate criminal resolution,” including a company’s efforts to implement or enhance its compliance program, reporting under any disclosure obligations, and other issues that arise during the term of the agreement.
Enforcement priorities. Fraud Division prosecutors are directed to prioritize fraud schemes involving the healthcare industry, including healthcare fraud, distribution of controlled substances, and violations of the Federal Food, Drug, and Cosmetic Act (FDCA); the public trust or financial integrity of Americans and markets related to procurement, government contracts, and other government functions; significant evasion of internal or external revenue, such as tax evasion; and tariff evasion, importation of goods or services, or forced labor.
“Great weight” factors. When recommending appropriate outcomes in corporate matters, including whether to bring charges and how to negotiate plea or other agreements, Fraud Division personnel are directed to give “great weight” to these factors:
- Management knowledge of, or involvement in, the fraud scheme
- Efforts to conceal fraud from government agencies or auditors, or otherwise to impede or obstruct a government function or oversight
- Conduct furthering a scheme lasting three years or more
- Threats to Americans’ safety or security, including military readiness
- Substantial financial hardship to a taxpayer-funded program or government function
- Effects on multiple such programs or functions
- Conduct affecting three or more federal districts
- Financial harm to 25 or more victims or $25 million or more in loss
- Exfiltration of American dollars to support foreign adversaries
- Immigration offenses
These factors are non-exhaustive; prosecutors may consider any other relevant factor consistent with the Justice Manual and must follow the CEP in all circumstances.
Data analytics and whistleblower incentives. The Directive highlights the Fraud Division’s infusion of resources, technology, and data analytics through the National Fraud Detection Center and partner components to generate leads and open new individual and corporate fraud investigations “at a rapid pace.” It directs Fraud 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 to provide the public with transparency to the extent possible regarding those policies and programs. The Directive also states that the Fraud Division’s policies must “encourage and protect the disclosure of information by whistleblowers, including by those who participated in the criminal conduct.” Under the CEP, a company is eligible for full voluntary self-disclosure benefits only if DOJ was not previously aware of the misconduct, with the sole exception of cases in which DOJ learned of the misconduct through a whistleblower report and the company self-discloses within 120 days of that report. This exception could encourage companies to cooperate even after a whistleblower has come forward, rather than adopt a defensive posture once they suspect that DOJ is already aware of the conduct.
Practical implications for companies
“Great weight” factors affect case assessments. Companies operating in or adjacent to the four priority areas (healthcare, government contracts, tax, and trade) are encouraged to review their fraud risk assessments and compliance programs against the Directive’s priorities and “great weight” factors. The Directive’s quantitative thresholds – three years, three federal districts, 25 or more victims, and $25 million or more in loss – make early assessment of scale and scope a key part of internal investigations. Because management knowledge or involvement is the first listed factor, companies may also wish to assess management’s role early.
Self-disclosure analysis may be key. Companies considering voluntary self-disclosure under the CEP may need to balance gathering sufficient information against making a timely disclosure. The Directive’s emphasis on rapid, data-driven lead generation through the National Fraud Detection Center, together with forthcoming whistleblower programs and protections for whistleblowers who participated in the conduct, could shorten the time available to decide whether to self-disclose. Companies making regulatory or civil disclosures are also encouraged to assess whether the reported conduct implicates the Directive’s priorities or “great weight” factors and warrants consideration of a criminal disclosure, as disclosures made only to regulatory or civil agencies generally do not qualify for CEP credit.
New avenues for advocacy are available. The Directive’s commitment to guarding against “overbroad corporate enforcement” and to “rightly dividing between shades of corporate malfeasance” may provide companies with a basis to advocate for proportionate outcomes that account for legitimate business operations. Companies and counsel are encouraged to monitor guidance on the whistleblower programs, the Corporate Enforcement Section’s oversight role, and the application of the “great weight” factors alongside the CEP.
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.
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