Expansion Of DOJ’s Fraud Division—five Enforcement Priorities Corporate Counsel Should Watch In 2027

What changed

In April 2026, the Department of Justice (DOJ) created the National Fraud Enforcement Division (NFED) to centralize and elevate fraud enforcement efforts.¹ The NFED—led by Assistant Attorney General Colin McDonald—oversees the Criminal Division’s Tax Section, Health Care Fraud Unit, and the Market, Government, and Consumer Fraud Unit, and is charged with investigating and prosecuting the theft or fraudulent misuse of taxpayer dollars.² As of late August 2026, the NFED has hired approximately 500 lawyers and staff and will be steadily increasing its workforce over the next two years.³ Additionally, each U.S. Attorney’s Office must designate a prosecutor who will be detailed to NFED. DOJ’s FY2027 budget request allocates USD30M for NFED, with a planned 140 positions and 100 lawyers—representing continued infrastructure buildout.⁴ Given NFED’s stated intent to continue expanding its workforce, 2027 will be the year NFED shifts from stand-up mode to sustained, high-volume enforcement.

DOJ has also launched the National Fraud Detection Center (NFDC), a prosecutor-led, multi-agency initiative designed to identify fraud schemes through coordinated investigations, shared analytics, and cross-agency data sharing.⁵ The NFDC provides an early indication of the areas where the NFED may deploy significant enforcement resources, including priorities identified by Assistant Attorney General McDonald: Public Trust and Financial Integrity, Health Care, Internal Revenue, Global Trade and Commerce, and Corporate Misconduct.⁶ These enforcement efforts are driven by estimates from the Government Accountability Office noting that the federal government loses between USD233B and USD521B annually to fraud.⁷

Bottom line: DOJ is pairing broader subject-matter authority with centralized analytics and nationwide prosecutorial coordination, which is designed to solve a critical lack of cross-program visibility that had historically allowed individuals to perpetrate complex fraud schemes across federal programs and jurisdictions without detection.

Where will DOJ focus its efforts?

Corporate misconduct

The NFED has established a dedicated Corporate Enforcement Section that will apply DOJ’s Corporate Enforcement and Voluntary Self-Disclosure Policy (CEP) to organizations engaged in fraud. The July 2026 declination for the Eye Care Group—the NFED’s first resolution under the CEP—signals how NFED intends to incentivize and reward self-disclosure, cooperation, and remediation. More recently, DOJ provided additional guidance regarding how it intends to evaluate and resolve corporate fraud matters.⁸ This new guidance, issued Oct. 1, 2026, formalized the Corporate Enforcement Section’s role in corporate fraud matters.⁹ The Corporate Enforcement Section also has primary responsibility for monitoring whether companies comply with the terms of their resolutions, including compliance program enhancements and disclosure obligations.¹⁰ These changes underscore DOJ’s continued focus on centralized and consistent corporate fraud enforcement.

In 2027, companies should expect NFED to rely on CEP resolutions as a primary tool for shaping corporate compliance across DOJ priority areas. The new guidance directs prosecutors to place significant weight on factors such as management involvement in misconduct, efforts to conceal wrongdoing, the duration and geographic scope of the conduct, harm to taxpayer-funded programs, and the overall impact of the fraud scheme.¹¹ DOJ also emphasized that it will distinguish companies that foster or tolerate misconduct from those that promptly disclose, cooperate, and remediate, reinforcing the continued importance of the CEP as a tool for encouraging corporate compliance. Corporate counsel should therefore be prepared to investigate quickly and make timely decisions on remediation and self-disclosure before DOJ uncovers the conduct independently.

Questions boards and compliance officers should ask:

• Are the company’s internal reporting channels generating timely, actionable information?

• Are there clear, tested protocols for escalating potential fraud issues to a decision maker authorized to evaluate self-disclosure to the NFED?

• Are the company’s internal monitoring and auditing capabilities—particularly in healthcare billing, government contracting, and trade/customs documentation—sophisticated enough to detect anomalies the government is now equipped to find first?

• Does your organization have procedures for receiving, investigating, and appropriately escalating internal reports that may implicate False Claims Act (FCA) concerns, while protecting employees from retaliation?

Healthcare fraud

Healthcare fraud will remain a core NFED enforcement priority given its convergence of taxpayer-program fraud, vulnerable populations, and substantial financial exposure. The NFED has identified the following areas as enforcement priorities: (1) fraud involving home health and hospice services; (2) kickback schemes and practices that interfere with informed healthcare decisions; and (3) unlawful prescribing and dispensing of opioids. With national healthcare expenditures projected to exceed USD7T and annual fraud losses estimated at 3%–10% lost,¹² the 2026 National Health Care Fraud Takedown—charging 455 defendants in approximately USD6.5B in alleged fraud—underscores DOJ’s continued focus on this sector.¹³

Questions boards and compliance officers should ask:

• Are your billing practices for Medicare, Medicaid, and other federal health programs subject to regular internal audits and testing?

• Do you have robust protocols to detect and report potential kickback arrangements, including with referral sources and vendors?

• Has your organization reviewed its telehealth and remote prescribing practices in light of the NFED’s stated priorities?

• Has your organization assessed its exposure to FCA liability in connection with any federally funded programs?

Public trust and financial integrity

The NFED will continue to prioritize government procurement fraud—including defective pricing, bid rigging, self-dealing, bribery, product substitution, and billing fraud—and fraud involving federal benefit and grant programs, such as student loans, childcare, veterans’ benefit, disaster relief, and small business programs. DOJ has signaled it will no longer deprioritize smaller-scale fraud cases and will target any fraud—small, medium, or large—involving dollars from the public fisc. For corporate counsel, the breadth of this priority means that weaknesses in contracting, grant administration, third-party oversight, and consumer-facing controls may present overlapping criminal, civil, and regulatory risks.

Questions boards and compliance officers should ask:

• Are controls over government contracts, grants, and benefit-program funds designed to detect conflicts of interest, defective pricing, bid manipulation, product substitution, and improper billing? 

• Can your organization promptly preserve relevant records and investigate allegations involving misuse of taxpayer funds, market integrity, or consumer harm? 

• Are employees and third-party vendors adequately trained on the heightened enforcement environment for government program fraud?

• Does your organization have controls for detecting and escalating business-email-compromise attempts and fraudulent payment instructions?

• Does your organization have a comprehensive procurement integrity program that covers bid preparation, pricing, and subcontractor management?

• Has your organization assessed its exposure to whistleblower (qui tam) risk, including employee awareness of financial incentives under the FCA?

• Are internal controls in place to detect product substitution, defective pricing, and other common procurement fraud schemes?

Internal revenue and tax fraud

Criminal tax enforcement is now an integral part of the NFED’s mandate to protect the taxpayer dollars. DOJ has specifically identified misconduct by return preparers, concealment of income, falsification of tax information, and promotion of abusive tax schemes as enforcement targets. With the former Criminal Division Tax Section now housed within NFED, we should expect to see DOJ bring more cases in 2027 where tax violations are pursued alongside procurement, healthcare, or trade fraud rather than as standalone compliance matters.¹⁴

Questions boards and compliance officers should ask:

• Does your organization have protocols to identify and address situations where tax fraud may overlap with other forms of fraud (e.g. healthcare, procurement, trade), given the NFED’s integrated enforcement model?

• Has your compliance program been updated to account for the heightened risk of parallel criminal and civil tax enforcement?

• Are tax advisors, return preparers, promoters, and other third parties subject to appropriate diligence, supervision, and documentation requirements?

Trade and tariff fraud

This area appears poised for the most aggressive growth heading into 2027. NFED now leads DOJ’s criminal enforcement strategy for trade and customs violations and forced-labor supply chains, working with the interagency Trade Fraud Task Force, which has already exceeded USD1B in recoveries, penalties, and forfeitures less than a year after launch.¹⁵¹⁶

A key question as we head into 2027 is whether DOJ will bring FCA enforcement into NFED. DOJ’s Office of Legal Policy was directed in April 2026 to recommend within 120 days whether civil components, including the Civil Division’s FCA-focused Commercial Litigation Branch, should be incorporated. No recommendation had been publicly announced as of September 2026. If integrated, NFED would become a unified civil-criminal fraud division, likely increasing parallel investigations and enabling simultaneous use of civil and criminal tools in trade-fraud cases.

Questions boards and compliance officers should ask:

• Has your organization audited its customs compliance program to ensure accurate tariff classifications, country-of-origin declarations, and valuation practices?

• Are you monitoring your supply chain for transshipment risks and forced labor indicators, particularly with respect to goods originating from high-risk jurisdictions?

• Do your third-party importers and customs brokers understand the increased criminal enforcement risk for trade violations?

• Is your organization prepared for the FCA’s growing role as a civil enforcement mechanism in trade cases?

Practical implications

Companies that interact with federal programs, receive federal funds, operate in healthcare, have cross-border supply chains, or face customs/trade exposure should treat DOJ’s standing up the NFED as an opportunity to:

• reassess compliance programs against the five stated priority areas, particularly trade compliance and healthcare marketing

• prepare for data-driven scrutiny and assume that billing data, customs documentation, and tax filings will be subjected to sophisticated pattern analysis

• evaluate self-disclosure posture under the CEP, which the NFED has signaled it will apply consistently

• integrate forced labor and trade compliance into core enterprise risk assessments rather than treating them as separate workstreams.

Footnotes

1. Memorandum from Todd Blanche, Acting Att'y Gen., U.S. Dep't of Just., Creation of the National Fraud Enforcement Division (Apr. 7, 2026), https://www.justice.gov/ag/media/1435311/dl?inline.

2. Establishing the National Fraud Enforcement Division, 91 Fed. Reg. 53,357 (Aug. 18, 2026) (to be codified at 28 C.F.R. pt. 0, subpt. M).

3. Memorandum from Colin M. McDonald, Assistant Att'y Gen., Nat’l Fraud Enf’t Div., U.S. Dep’t of Just., Enforcement Priorities (Aug. 13, 2026), https://www.justice.gov/opa/media/1457756/dl?inline [hereinafter McDonald Memorandum].

4. U.S. Department of Justice, National Fraud Enforcement Division, FY 2027 Budget Request (2026), https://www.justice.gov/jmd/media/1433186/dl?inline.

5. U.S. Department of Justice, Department of Justice Announces Launch of National Fraud Detection Center to Combat Fraud Against Taxpayer-Funded Programs (Aug. 24, 2026), https://www.justice.gov/opa/pr/department-justice-announces-launch-national-fraud-detection-center-combat-fraud-against.

6. McDonald Memorandum, supra note 3.

7. Id.

8. Colin M. McDonald, Assistant Att'y Gen., Nat’l Fraud Enf’t Div., U.S. Dep’t of Just., Directive 26-12: Corporate Enforcement in the Fight Against Fraud (Oct. 1, 2026).

9. Id.

10. Id. at 3.

11. Id. at 3-4.

12. Id.

13. U.S. Department of Justice, National Health Care Fraud Takedown Results in 455 Defendants Charged in Connection with Over $6.5 Billion in Alleged Fraud (June 23, 2026), https://www.justice.gov/opa/pr/national-health-care-fraud-takedown-results-455-defendants-charged-connection-over-65. 

14. McDonald Memorandum, supra note 3, at 4–5.

15. U.S. Department of Justice, Trade Fraud Task Force Surpasses $1 Billion in Recoveries and Charged Losses in Less Than One Year (July 14, 2026), https://www.justice.gov/opa/pr/trade-fraud-task-force-surpasses-1-billion-recoveries-and-charged-losses-less-one-year. 

16. Establishing the National Fraud Enforcement Division, 91 Fed. Reg. 53,357 (Aug. 18, 2026).

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.