Key Takeaways
- • On October 1, 2026, Assistant Attorney General Colin M. McDonald of the Justice Department's National Fraud Enforcement Division (the "Fraud Division") issued Directive 26-12, setting out corporate enforcement principles, investigation priorities and charging factors.
- • The Directive names four priority areas: health care fraud, public trust and government contracting fraud, significant revenue evasion, and tariff evasion, importation violations or forced labor.
- • Prosecutors must give "great weight" to ten non-exhaustive factors, including management knowledge of fraud, concealment, schemes lasting three years or more, and losses of $25 million or more or harm to 25 or more victims.
- • A new Corporate Enforcement Section will require all Division prosecutors to report ongoing corporate investigations within seven days and will hold primary responsibility for monitoring compliance with corporate criminal resolutions.
- • The Division's National Fraud Detection Center and expanded whistleblower incentives raise the risk that DOJ learns of misconduct without a self-disclosure, making early consideration of voluntary disclosure under the Department-wide CEP more important.
Summary
On October 1, 2026, Colin M. McDonald, Assistant Attorney General for the Justice Department's National Fraud Enforcement Division, issued Directive 26-12: Corporate Enforcement in the Fight Against Fraud. The Directive sets out the Division's corporate enforcement principles, investigation priorities and the factors that guide charging and resolution decisions, and it defines the internal role of the new Corporate Enforcement Section. According to the publisher's summary, the Fraud Division was created earlier in 2026 by President Donald J. Trump with a broad mandate to enforce federal criminal and civil fraud laws against schemes targeting federal programs, federally funded benefits, businesses, nonprofits and private citizens.
The Directive describes corporate enforcement as a "necessary component" of an "aggressive, all-tools" approach to fraud. It also commits the Division to credit companies that disclose misconduct, cooperate and remediate, and to guard against "overbroad corporate enforcement" by distinguishing between degrees of corporate wrongdoing. Prosecutors must follow Department-wide policies, including the Corporate Enforcement and Voluntary Self-Disclosure Policy (CEP), which provides a presumption of declination for qualifying companies.
Prosecutors are directed to prioritize four categories: health care industry fraud, including controlled substances and Federal Food, Drug and Cosmetic Act violations; public trust and government fraud, including procurement and government contracts; significant revenue evasion; and trade and tariff fraud, including forced labor. These priorities generally align with four existing Division sections: the Health Care Fraud Section, the Public Trust and Financial Integrity Section, the Tax Section and the Global Trade & Commerce Enforcement Section.
The Directive lists ten factors that must receive "great weight" in charging and plea or other resolution decisions. They include management knowledge or involvement, concealment from government agencies or auditors, schemes lasting three years or more, threats to national safety including military readiness, substantial hardship to taxpayer-funded programs, effects across three or more federal districts, financial harm to 25 or more victims or $25 million or more in loss, exfiltration of dollars to foreign adversaries, and immigration offenses. McDonald told Law360 that management knowledge "is sort of the top line" the Division would examine.
The Corporate Enforcement Section will ensure consistent prosecution of corporate crime. Division prosecutors must report ongoing corporate investigations to its Chief within seven days of the Directive and promptly notify it of new investigations and major developments. The Section will also have primary responsibility for evaluating compliance with corporate criminal resolutions. Attorneys in the District Fraud Counsel Section embedded in U.S. Attorney's Offices are carved out unless their cases are also supervised by the Fraud Division.
The Directive highlights the National Fraud Detection Center, which uses data analytics to generate leads at a "rapid pace," and whistleblower programs designed to encourage disclosure, including by culpable participants. Counsel are advised that these mechanisms may reduce voluntary self-disclosure and cooperation credit if DOJ learns of misconduct through other channels, so companies should consider disclosure early, before completing a full internal investigation.
The Directive is consistent with remarks made on September 30 by Tysen Duva, Assistant Attorney General for the Criminal Division, at a GIR Live event. Duva stressed self-reporting, urged companies to self-disclose early and "get in the room" with prosecutors, and said the goal is to "remove the bad apples" rather than "ruin a company." He also said cases involving government loss will go to the Fraud Division, and that FCPA enforcement is "really ramping up," with large corporate resolutions expected within six months.
The Directive describes corporate enforcement as a "necessary component" of an "aggressive, all-tools" approach to fraud. It also commits the Division to credit companies that disclose misconduct, cooperate and remediate, and to guard against "overbroad corporate enforcement" by distinguishing between degrees of corporate wrongdoing. Prosecutors must follow Department-wide policies, including the Corporate Enforcement and Voluntary Self-Disclosure Policy (CEP), which provides a presumption of declination for qualifying companies.
Prosecutors are directed to prioritize four categories: health care industry fraud, including controlled substances and Federal Food, Drug and Cosmetic Act violations; public trust and government fraud, including procurement and government contracts; significant revenue evasion; and trade and tariff fraud, including forced labor. These priorities generally align with four existing Division sections: the Health Care Fraud Section, the Public Trust and Financial Integrity Section, the Tax Section and the Global Trade & Commerce Enforcement Section.
The Directive lists ten factors that must receive "great weight" in charging and plea or other resolution decisions. They include management knowledge or involvement, concealment from government agencies or auditors, schemes lasting three years or more, threats to national safety including military readiness, substantial hardship to taxpayer-funded programs, effects across three or more federal districts, financial harm to 25 or more victims or $25 million or more in loss, exfiltration of dollars to foreign adversaries, and immigration offenses. McDonald told Law360 that management knowledge "is sort of the top line" the Division would examine.
The Corporate Enforcement Section will ensure consistent prosecution of corporate crime. Division prosecutors must report ongoing corporate investigations to its Chief within seven days of the Directive and promptly notify it of new investigations and major developments. The Section will also have primary responsibility for evaluating compliance with corporate criminal resolutions. Attorneys in the District Fraud Counsel Section embedded in U.S. Attorney's Offices are carved out unless their cases are also supervised by the Fraud Division.
The Directive highlights the National Fraud Detection Center, which uses data analytics to generate leads at a "rapid pace," and whistleblower programs designed to encourage disclosure, including by culpable participants. Counsel are advised that these mechanisms may reduce voluntary self-disclosure and cooperation credit if DOJ learns of misconduct through other channels, so companies should consider disclosure early, before completing a full internal investigation.
The Directive is consistent with remarks made on September 30 by Tysen Duva, Assistant Attorney General for the Criminal Division, at a GIR Live event. Duva stressed self-reporting, urged companies to self-disclose early and "get in the room" with prosecutors, and said the goal is to "remove the bad apples" rather than "ruin a company." He also said cases involving government loss will go to the Fraud Division, and that FCPA enforcement is "really ramping up," with large corporate resolutions expected within six months.
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