October 02, 2026 | 4 minute read

In August, Bracewell published an update on the memorandum of enforcement priorities issued by Colin M. McDonald, Assistant Attorney General of the Department of Justice’s National Fraud Enforcement Division.[1] On October 1, the Fraud Division issued additional guidance that signals a prioritized focus on corporate enforcement. The memorandum takes the Justice Manual’s existing, flexible, multi-factor framework for corporate enforcement decisions and layers onto it a Fraud Division-specific list of priority fraud types and a weighted list of aggravating factors that prosecutors must apply.[2] It also creates a mandatory centralized reporting and review structure through the Corporate Enforcement Section that did not previously exist in this form. In doing so, this latest memorandum highlights an “aggressive, all-tools approach to investigating and prosecuting [the Division’s] healthcare, government, tax, and trade fraud priorities.”[3]

Key Takeaways

  • Among other factors, the Fraud Division is focused on the seriousness and pervasiveness of a company’s wrongdoing, its compliance policies, its internal controls, and its history of misconduct.
  • The Fraud Division aims to (1) hold criminal entities accountable; (2) further individual prosecutions; (3) promote a culture of compliance and integrity; and (4) protect and foster honest, good-faith markets and institutions.
  • The memorandum also emphasizes the Fraud Division’s continued priority of protecting law-abiding companies and crediting those that disclose misconduct, cooperate, and remediate.
  • The memorandum highlights the intended collaboration between the Fraud Division and the new Corporate Enforcement Section. That collaboration is underway, with Fraud Division prosecutors set to report any ongoing corporate investigations to the Chief of the Corporate Enforcement Section by October 8, 2026.
  • The Corporate Enforcement Section will lead the evaluation of a company’s compliance program, inclusive of any implementations or enhancements.
  • Notably, a footnote clarifies the reach of Assistant Attorney General McDonald’s directives, excluding cases assigned to a US Attorney’s Office that are not also supervised by the Fraud Division. This carveout preserves the autonomy of the US Attorney’s Office for some cases, thereby limiting the Fraud Division’s involvement into such matters.

Corporate Investigations and Enforcement Actions

The Fraud Division directs its prosecutors to rely on the Principles of Federal Prosecution of Business Organizations when opening and conducting corporate investigations. To help achieve its corporate enforcement mission, the memorandum includes a non-exhaustive list of fraud schemes the Fraud Division encourages its prosecutors to prioritize including those involving the healthcare industry; the public trust or financial integrity of Americans and markets; significant evasion of internal or external revenue; and tariff evasion, importation of goods or services, or forced labor. The memorandum also includes a non-exhaustive list of factors that Fraud Division prosecutors are to consider when recommending outcomes in corporate matters:

  1. Knowledge of or involvement in fraud scheme by corporate management;
  2. Efforts to conceal fraud from government agencies or auditors or otherwise impede or obstruct a government function or oversight;
  3. Conduct that furthers the scheme lasting three years or more;
  4. Actions that threaten the safety or security of Americans, including military readiness;
  5. Conduct that causes substantial financial hardship to a taxpayer funded program or government function;
  6. Conduct that affects multiple taxpayer-funded programs or government functions;
  7. Conduct that affects three federal districts or more;
  8. Conduct that results in financial harm to 25 or more victims or $25 million or more in loss;
  9. Conduct that involves the exfiltration of American dollars to support foreign adversaries; and
  10. Conduct that involves immigration offenses.

Ultimately, Fraud Division prosecutors “must [continue to] exercise their thoughtful and pragmatic judgment in applying and balancing these factors, so as to achieve a fair and just outcome and promote respect for the law.”[4] Such clear-cut guidance offers less flexibility than prior enforcement approaches when it comes to defenses and companies should consult with counsel to consider how, or when, the factors could apply.

Companies and Industries That Should Be On Alert

Considering the Fraud Division’s memoranda, several categories of companies should treat this moment as one of heightened risk. They include:

  • Healthcare companies, including providers, pharmacies, telemedicine platforms, home health and hospice operators, and any business touching Medicare or Medicaid billing or controlled substance distribution;
  • Government contractors and grant recipients;
  • Companies with significant cross-border operations, including importers, customs brokers, and businesses with complex international supply chains;
  • Companies in sectors with high tax exposure or aggressive tax positions;
  • Multinational or multi-district businesses more generally; and
  • Companies that generate large volumes of structured data reviewable by automated tools, generally (e.g., cross-border shipment and customs records, healthcare billing data, government invoicing, and similar transactional data).

Promoting Disclosure

The importance of a company’s timely voluntary self-disclosure has never been more critical owing to data analytics and the National Fraud Detection Center generating leads and opening investigations at a rapid pace. Companies that are not leveraging the same tools within a robust compliance program risk shrinking the window by which they can get ahead of the government’s identification of misconduct. Assistant Attorney General McDonald’s directive that Fraud Division leadership “design and implement policies and programs that appropriately incentivize whistleblowers to bring forward credible information pertaining to fraud and provide the public with transparency to the extent possible regarding those policies and programs,” suggests companies should anticipate additional guidance specific to such priorities.[5] It remains to be seen whether whistleblower policies will supplement or supplant existing ones.  

An encouraging signal from the Fraud Division is its continued reliance on, and commitment to honoring, companies and individuals who come forward to disclose misconduct. The Fraud Division emphasized its commitment to encourage whistleblowers’ disclosure, even if the whistleblowers themselves participated in criminal conduct. When it comes to self-disclosure, companies should continue to prioritize maintaining robust systems capable of detecting potential criminal conduct and enabling timely reporting and remediation.

What Companies Should Do Now

  • Continue to stay current on industry developments and sectors highlighted by the Fraud Division’s guidance, including but not limited to: government contracting and procurement, healthcare, tax, and trade;
  • Prioritize the establishment and maintenance of comprehensive compliance programs that leverage data and analytics tools to spot issues;
  • Encourage internal reporting; and
  • Proactively address any potential criminal conduct in time to take advantage of the DOJ’s disclosure policies.

Companies with questions about the memorandum’s implications for their operations, compliance programs, or potential enforcement exposure should consider engaging counsel to assess risk, evaluate existing controls, and develop an appropriate response strategy. Bracewell’s government enforcement and investigations team is available to help companies navigate these developments and prepare for increased scrutiny in these areas.

[1] DOJ Fraud Division Issues Sweeping Enforcement Priorities Memorandum.  

[2] The framework relies on the interplay of the Justice Manual (JM), specifically § 9-28.000, the Principles of Federal Prosecution of Business Organizations, and the Department-wide Corporate Enforcement and Voluntary Self-Disclosure Policy (CEP).

[3] Directive 26-12: Corporate Enforcement in the Fight Against Fraud Memorandum, October 1, 2026.

[4] Id.

[5] Id.

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