On August 13, 2026, Assistant Attorney General Colin M. McDonald issued the first enforcement priorities memorandum for the Department of Justice’s (DOJ) new National Fraud Enforcement Division (Fraud Division).1 The memorandum establishes five priority enforcement areas for what the DOJ describes as the first division in Department history dedicated solely to detecting, investigating, and prosecuting fraud against the United States and its citizens. With an estimated $233 to $521 billion in annual federal fraud losses at stake, the Division represents a fundamental restructuring of how the federal government pursues fraud—and companies across industries should take notice.
This alert discusses:
- The DOJ’s announcement and the Fraud Division’s structure;
- The five stated enforcement priority areas;
- Why this matters for companies, government contractors, and regulated entities; and
- Key…
MANAGEMENT & CULTURE (THE “TONE AT THE TOP”)
Fraud thrives in “sloppy” environments where leadership ignores the rules.
- The Fraud Triangle: For fraud to occur, three elements must be present: Pressure (the need for money), Rationalization (thinking “I deserve this”), and Opportunity (weak controls). You can only control the Opportunity.
- Whistleblower Hotline: Provide an anonymous way for staff to report “odd behavior.” Most internal frauds are caught via tips, not audits.
- Background Checks: Conduct credit and criminal record checks for all employees in financial or data-sensitive roles.
- Annual Ethics Training: Make sure every staff member knows that the company has a Zero Tolerance policy toward “borrowing” from petty cash or fudging overtime.