On October 1, 2026, Assistant Attorney General Colin M. McDonald issued Directive 26-12, “Corporate Enforcement in the Fight Against Fraud,” (“Directive 26-12”) to all personnel of the Department of Justice’s (“DOJ”) newly created National Fraud Enforcement Division (the “Fraud Division”). Significantly, the Fraud Division promises an “aggressive, all-tools approach” to corporate fraud, run through its newly centralized Corporate Enforcement Section and guided by a published list of priorities and aggravating factors. A week later, McDonald issued “A Comprehensive Approach in the Fight Against Fraud” (Oct. 7, 2026) (“Directive 26-13”), placing these corporate enforcement priorities within a broader strategy emphasizing additional charges, early asset recovery and disruption, proactive cooperators, and aggressive sentencing advocacy.
Notably, both Directives are addressed to Fraud Division personnel at Main Justice and do not purport to bind U.S. Attorneys’ Offices or DOJ’s Criminal Division. For companies, the Directives are both a warning and a roadmap. They outline which industries and conduct will draw scrutiny, which facts will push prosecutors toward charges, and envisage more whistleblower tips and proactive cooperators. Directive 26-12 also reaffirms that self-disclosure, cooperation, and remediation will be credited under the Department-wide Corporate Enforcement and Voluntary Self-Disclosure Policy (“CEP”), while Directive 26-13 signals an earlier and more aggressive position on asset seizure, charging, and sentencing.
Below are the highlights of Directive 26-12, how Directive 26-13 builds on each, and what they mean in practice.
Link to A Central Hub for Every Corporate Fraud Case A Central Hub for Every Corporate Fraud Case
The Corporate Enforcement Section now sits at the center of all corporate matters across the Division’s health care, government, tax, and trade portfolios. Prosecutors must work with the Corporate Enforcement Section “at all phases” of a corporate case, from intake through resolution or litigation.
- Immediate reporting: Within seven days of Directive 26-12, prosecutors must report on all ongoing corporate investigations to the Corporate Enforcement Section Chief. New investigations and major developments must be reported promptly.
- Monitoring resolutions: The Corporate Enforcement Section takes primary responsibility for overseeing compliance with corporate resolutions, including compliance program enhancements and disclosure obligations during the agreement term.
- Scope limit: Directive 26-12 does not reach cases assigned to a District Fraud Counsel by a U.S. Attorney’s Office unless the Fraud Division also supervises them.
Centralizing corporate matters in the Corporate Enforcement Section is intended to bring greater consistency to fraud cases and a “clear, predictable path to resolution” should they self-disclose. Companies under existing agreements should anticipate a new set of reviewers and should confirm their reporting is current and complete. The Directive also frames this as freeing up line prosecutors to bring more cases.
Directive 26-13 adds a second centralized function. It instructs prosecutors to “prioritize early seizure of fraud proceeds and early disruption of fraud schemes,” coordinating with the Division’s Asset Recovery Section “at all stages” of an investigation and prosecution. As a result, companies may find themselves dealing with both the Corporate Enforcement Section and the Asset Recovery Section, potentially from the outset of a matter.
Link to Four Enforcement Priorities Four Enforcement Priorities
Directive 26-12 instructs prosecutors to prioritize four categories when opening and conducting corporate investigations:
- Health care: health care fraud, distribution of controlled substances, and Federal Food, Drug, and Cosmetic Act violations.
- Government and public trust: fraud tied to procurement, government contracts, and other government functions, or to the financial integrity of Americans and markets.
- Revenue evasion: schemes involving significant evasion of internal or external revenue.
- Trade: tariff evasion, importation of goods or services, and forced labor.
Health care providers, pharmaceutical and device manufacturers, government contractors, and importers are likely to receive closer scrutiny for activities that fall within these priority areas. While customs and trade compliance have long carried potential civil, administrative, and criminal consequences, Directive 26-12 makes it clear that the Fraud Division intends to devote increased enforcement attention to these areas.
Directive 26-13 shows that conduct in these priority areas may not be charged in isolation. It acknowledges that familiar charges, such as wire fraud, health care fraud, and major fraud against the U.S., will often suffice. However, it guides prosecutors on “attacking fraud from all angles” using the Division’s tax, securities fraud, consumer fraud, and cybercrime authorities where doing so would help dismantle fraud networks and maximize recoveries.
Link to Ten Factors Weighing Heavily in Charging Decisions Ten Factors Weighing Heavily in Charging Decisions
Perhaps the most practical part of Directive 26-12 is a list of ten factors that prosecutors “must place great weight on” when deciding whether to charge a company and when negotiating plea or other agreements:
- Management knowledge of or involvement in the scheme;
- Concealment from agencies or auditors, or obstruction of oversight;
- Conduct furthering the scheme lasting three years or more;
- Conduct affecting three or more federal districts;
- 25 or more victims, or $25 million or more in loss;
- Substantial financial hardship to taxpayer-funded programs or functions;
- Effects on multiple taxpayer-funded programs or functions;
- Threats to Americans’ safety or security, including military readiness;
- Exfiltration of U.S. dollars to support foreign adversaries; and
- Immigration offenses.
The list is expressly non-exhaustive and are discretionary considerations rather than thresholds. Prosecutors may weigh any other relevant factor consistent with the Justice Manual, and must still apply the Principles of Federal Prosecution of Business Organizations (JM § 9-28.300) and the CEP. Directive 26-13 extends the significance of these factors beyond the charging decision. It calls for pre-indictment asset seizure where appropriate and directs prosecutors to seek upward variances and departures at sentencing.
Link to More Whistleblowers, More Data-Driven Leads More Whistleblowers, More Data-Driven Leads
Directive 26-12 says the Fraud Division is generating leads and opening cases “at a rapid pace,” drawing on new resources, technology, and data analytics through the also newly created National Fraud Detection Center. It then directs Fraud Division leadership to design and implement policies that incentivize whistleblowers to bring forward credible fraud information, explicitly including people who participated in the misconduct. Directive 26-12 promises public transparency about those programs where possible, but does not yet describe their terms. Directive 26-13 reinforces this theme by affirming that cooperating witnesses can be central to dismantling fraud schemes and calls for developing proactive cooperators.
The window between internal discovery and government discovery appears to be shrinking. The DOJ is attempting to mine data to find fraud on its own, and it intends to reward insiders, even culpable ones, for coming forward. Companies should take into consideration how quickly they can evaluate a credible internal allegation, particularly given that the CEP generally allows a company up to 120 days after receiving a whistleblower report (even if the whistleblower reports before the company does) to self-disclose and remain eligible for declination.