On October 7, 2026, Colin M. McDonald, Assistant Attorney General for the Department of Justice’s National Fraud Enforcement Division, issued a memorandum highlighting the Fraud Division’s crackdown on fraud. Bracewell recently published an update on the Fraud Division’s corporate enforcement policy and, shortly before that, an update on the Fraud Division’s enforcement priorities. The memorandum builds on that earlier guidance, marking “a significant operational shift” and requiring prosecutors to “attack fraud from all angles using the Division’s tax, securities fraud, consumer fraud, and cybercrime authorities.” According to the DOJ’s press release, the Government Accountability Office estimates that annual federal fraud losses range from $233 billion to $521 billion. Layered onto recent directives, this guidance makes clear that the Fraud Division is focused on rooting out fraud and using every available mechanism to do so.
Key Takeaways
- The Fraud Division’s “comprehensive approach” to combating fraud includes (1) attacking fraud from all angles; (2) developing proactive cooperating witnesses; (3) corporate enforcement; (4) arrest, detention, and violations of pretrial release; and (5) sentencing advocacy.
- As part of its commitment to using “every available tool to identify the full scope” of fraud schemes, the Fraud Division will also seek injunctions and seize and forfeit assets in connection with its fraud prosecution efforts.[1]
- The Fraud Division has identified tax offenses, securities fraud, consumer fraud, and cybercrime as priority areas in which prosecutors can leverage relationships with other agencies and DOJ components, such as IRS Criminal Investigation, the Public Trust and Financial Integrity Section, and US Attorneys’ Offices, to advance its mission.
- Corporate enforcement remains a top priority for the Fraud Division, as detailed in Directive 26-12, which Bracewell reported on earlier this month.
Dismantling Fraud Schemes
In Assistant Attorney General McDonald’s latest directive, the Fraud Division is tasked with looking beyond common fraud charges, such as mail and wire fraud, to “fully dismantle the fraud schemes and networks” it investigates and to “maximize recoveries and secure justice.” As part of that approach, the Fraud Division will examine tax offenses because those who profit from fraud schemes often fail to report their income accurately or pay the appropriate taxes. Similarly, those who defraud procurement processes or engage in healthcare fraud may also commit securities fraud by misleading the investing public. Finally, the Fraud Division has been directed to investigate consumer fraud and cybercrime to identify residual harm and analyze whether additional charges can be brought against wrongdoers.
The new directive also aims to “take the profit out of fraud” through the early seizure of fraud proceeds. Accordingly, Fraud Division prosecutors are directed to collaborate with the Division’s Asset Recovery Section. The memorandum encourages an aggressive pre- and post-indictment enforcement strategy, with an emphasis on the following measures:
- Restraining orders or seizure letters to freeze assets held in banks and cryptocurrency exchanges shortly after they have been stolen;
- Warrants and in rem forfeiture proceedings to seize criminal proceeds comprising funds held in accounts, cryptocurrency wallets, securities, and other financial instruments and assets before initiating criminal charges;
- Warrants to seize websites, domains, online accounts, domestic and international satellite and cellular terminals and related US-based service accounts, and other digital property used to commit fraud or conceal fraud proceeds;
- Civil actions to obtain restraining orders prohibiting the withdrawal, transfer, removal, dissipation, or disposal of criminal proceeds — or property of equivalent value — of a banking law violation or a healthcare offense;
- Civil actions to obtain injunctions against government fraud, banking law violations, and healthcare offenses;
- Civil actions to obtain prejudgment remedies, including the attachment or garnishment of assets, sequestration of income, and appointment of receivers, for any offense.[2]
In the memorandum, Assistant Attorney General McDonald reiterated well-worn principles governing cooperating witnesses, reminding prosecutors that such witnesses can be central to dismantling fraud schemes and signaling to the community at large that the Fraud Division is seeking proactive cooperation. For instance, while he emphasized that “fraudsters willing to cooperate will not get a free pass,” he did note that where appropriate, Fraud Division prosecutors will inform the court of a cooperating witnesses’ “substantial assistance” to an investigation.[3] Cooperating witnesses can therefore retain a meaningful incentive to assist Fraud Division investigations, particularly early on, when their contributions can reveal criminal activity not yet known to prosecutors.
What Companies & Decision Makers Should Do Now
- Assess potential exposure in scrutinized industries, including government contracting and procurement, healthcare, tax, and trade;
- Ensure that compliance policies and programs are designed to detect and elevate reports of potential criminal activity promptly;
- Consider the potential impact of early asset freezes in the event of Fraud Division enforcement; and
- Stay current on guidance from the Fraud Division and expect additional directives that may broaden the Fraud Division’s reach.
Consistent with recent guidance, this latest memorandum reaffirms the Fraud Division’s scrutiny of healthcare, government programs and procurement, tax, and trade. Companies that operate in or with these industries should remain vigilant in detecting and addressing potential criminal conduct. The pace of recent directives reinforces the Fraud Division’s message that it is committed to using every available tool to combat fraud and hold wrongdoers accountable. It also reflects the swift pace at which the Fraud Division may prosecute cases. Companies should monitor how cross-sector and interagency collaboration operates in practice and assess its potential impact on those facing Fraud Division enforcement.
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] Directive 26-13: A Comprehensive Approach in the Fight Against Fraud, October 7, 2026.
[2] Id.
[3] Id.