Overview
On October 1, AAG Colin M. McDonald issued a memorandum outlining how the Fraud Division (Division) of the US Department of Justice (DOJ) will approach corporate enforcement. The memo reiterates the Division's four priority areas: health care, public trust, tax, and trade. It also places all corporate matters from investigation through resolution and, if applicable, litigation under the purview of the Division's Corporate Enforcement Section (CES).
The memo identifies ten non-exhaustive factors that prosecutors must consider when making charging and resolution decisions in corporate matters. It also continues DOJ’s emphasis on encouraging whistleblowers to come forward and reaffirms the Division's commitment to "aggressively" prosecuting fraud while guarding against "overbroad corporate enforcement" and crediting companies that self-disclose, cooperate, and remediate.
Below, we summarize the memo's key points and offer practical considerations for companies.
All Corporate Fraud Enforcement Will Fall Under the CES
The memo directs all Division prosecutors to bring new and ongoing corporate investigations to CES, which will have primary responsibility for overseeing corporate matters from investigation through resolution, including evaluating compliance with the terms of any corporate resolution. The purpose of the change is to create uniformity in how the Division handles corporate fraud and to free line prosecutors from post-resolution oversight.
Key Considerations for Corporate Fraud Matters
The Division's priorities remain unchanged, with a focus on fraud in connection with the health care industry (including distribution of controlled substances and Food, Drug, and Cosmetic Act violations); public trust and financial integrity of markets (including procurement, government contracts, and other government functions); tax evasion; and trade (including tariff evasion, importation of goods or services, and forced labor).
The memo identifies ten factors that must be given "great weight" in the Division's charging and resolution decisions. They are:
- Management's knowledge of or involvement in the scheme
- Concealment from government agencies or auditors, or obstruction
- Conduct that lasts three years or more
- Threats to the safety or security of Americans, including military readiness
- Financial hardship to a taxpayer-funded program or government function
- Impact on multiple taxpayer-funded programs or functions
- Conduct that affects three or more federal districts
- Conduct that results in financial harm to 25 or more victims, or $25 million or more in loss
- Sending US dollars abroad to support foreign adversaries
- Immigration offenses
These factors are non-exhaustive, as prosecutors may weigh other relevant factors, consistent with the Justice Manual. In an interview with Law360, Assistant Attorney General McDonald stated: "Knowledge of or involvement in a fraud scheme by corporate management is sort of the top line that we would look at … It is important that we take into account administration priorities in focusing our team to be as effective and efficient with the range of cases that comes across our desk."[1]
Management’s knowledge or involvement is thus a central consideration along with the administration’s fraud enforcement priorities.
Continued Incentives for Whistleblowers
The memo highlights the Division’s National Fraud Detection Center and its use of data analytics to generate leads and open investigations "at a rapid pace." It also directs Division leadership to design and implement policies and programs that incentivize whistleblowers to come forward, including those who participated in the misconduct.
What This Means for Companies
- Expect more scrutiny, especially if operating in any of the four priority areas: health care, public trust and markets, tax, and trade.
- Consider self-disclosure early as increased use of data analytics and whistleblower incentives may shorten the window to disclose first and qualify for credit under the Corporate Enforcement Policy.
- Evaluate potential misconduct against the ten factors with particular focus on whether corporate management knew of or was involved in the alleged misconduct.
- Test compliance programs and how well they detect and escalate management involvement, concealment, or long running and/or widespread conduct.
- Plan for early CES engagement as companies facing a Division inquiry should anticipate CES's participation in the investigation through resolution, if applicable.
[1] Phillip Bantz, DOJ Outlines New Corporate Fraud Enforcement Policies, Law360 (Oct. 1, 2026), https://www.law360.com/whitecollar/articles/2532588.
