Earlier this year, the U.S. Department of Justice established, for the first time in two decades, a new stand-alone division, headed by Assistant Attorney General. The new division, the National Fraud Enforcement Division, has the mandate of investigating and prosecuting “fraud against the American people,” including fraud in government contracting and procurement, trade and customs-fraud, healthcare fraud, and tax fraud. The prosecution of certain “private” frauds (presumably including most forms of criminal securities fraud) remains in the purview of DOJ’s Criminal Division.
On October 1, 2026, the new Fraud Division took a significant step in outlining its approach to corporate enforcement by releasing a directive entitled “Corporate Enforcement in the Fight Against Fraud,” to all Fraud Division personnel.1 The Directive describes an “all-tools” approach to the Division’s health…
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.