The US Department of Justice’s National Fraud Enforcement Division has released its first-ever enforcement priorities memorandum, signalling a fundamental shift in federal fraud prosecution.
Colin M. McDonald, the Assistant Attorney General heading the NFED, published the memorandum on August 13, 2026, outlining the division’s core enforcement focus areas.
The NFED represents the DOJ’s first division dedicated exclusively to combating fraud against taxpayer dollars and taxpayer-funded programmes, marking a watershed moment for federal enforcement.
With a stated goal of reaching 500 prosecutors and staff by August 24, the division intends to deploy “cutting-edge data analysis” across a “whole-of-government” effort.
The NFED identifies five priority areas: public trust and financial integrity, healthcare, internal revenue, global trade and commerce, and corporate misconduct.
Healthcare fraud is a significant focus, with the division targeting telemedicine fraud, home health and hospice scams, kickback schemes, illegal opioid distribution, and Medicare and Medicaid fraud.
Global trade enforcement will target customs evasion, country-of-origin fraud, transshipment schemes, sanctions evasion, and forced labour in supply chains, recognising that trade fraud implicates national security interests.
An unresolved structural question could reshape fraud litigation strategy, with DOJ’s Office of Legal Policy yet to confirm whether the Civil Division’s False Claims Act enforcement arm will be absorbed into the NFED.
If the civil and criminal functions are consolidated, experts warn this could raise serious questions around grand jury secrecy, with inadvertent access through shared databases or joint meetings potentially constituting violations of Federal Rule of Criminal Procedure 6(e).
Companies must also understand that the NFED operates separately from the Criminal Division’s White Collar and Corporate Enforcement Section, which handles securities fraud, financial institution fraud, and commodities fraud.
A healthcare provider facing Medicare fraud allegations falls under the NFED’s mandate, while a financial services firm accused of securities fraud would fall under the White Collar and Corporate Enforcement Section’s purview.
Businesses and nonprofits receiving federal funding for activities not aligned with the Administration’s policy goals may be particularly vulnerable to allegations of taxpayer-funded fraud given the NFED’s broad mandate.
Early NFED enforcement activity shows a pronounced emphasis on pandemic relief fraud and healthcare and Medicaid fraud, with a focus on individual rather than corporate prosecutions, according to analysis by FTI Consulting.
DOJ’s Corporate Enforcement and Voluntary Self-Disclosure Policy remains critical, with companies that disclose misconduct before an imminent government investigation eligible for a presumptive declination of prosecution.
However, the NFED’s expanded resources and data-driven investigative capabilities may compress the window available for companies to make voluntary disclosures and secure favourable treatment.
In-house counsel and compliance officers are urged to act immediately, evaluating whether compliance programmes are adequately resourced and whether internal audit capabilities are sufficient to detect anomalous activity.
The creation of the NFED represents a potentially meaningful escalation in federal fraud enforcement, and companies that align their compliance posture with its stated priorities will be best positioned to manage risk.