Overview
On January 8, 2026, the White House announced the creation of a new Department of Justice (DOJ) Division for National Fraud Enforcement (the Division) aimed at strengthening federal efforts to combat fraud across the United States. The initiative is presented as a comprehensive response to what the administration characterizes as widespread and systemic fraud affecting federal programs and benefits. Through a fact sheet, the administration explained its rationale, albeit briefly.
The new Division will apparently work alongside the DOJ Criminal Division's existing Fraud Section in enforcing federal civil and criminal laws related to fraud that impact government agencies, federally funded benefit programs, businesses, nonprofits, and consumers. Unlike existing structures that often address fraud on a more decentralized or program-specific basis, the Division is intended to provide a coordinated national platform for investigating and prosecuting complex, multi-jurisdictional fraud schemes.
Leadership of the Division will rest with a Senate-confirmed assistant attorney general (AAG), who will oversee nationwide fraud enforcement strategy. In a White House press briefing on January 8, 2026, Vice President J.D. Vance stated that the role will "run out of the White House under the supervision of [the Vice President] and the President of the United States."
In particular, the Division will be tasked with:
- Directing national fraud enforcement initiatives;
- Coordinating multi-district and multi-agency fraud investigations;
- Providing guidance and support to US Attorneys' Offices on fraud matters;
- Working closely with federal agencies to identify, disrupt, and dismantle organized and complex fraud schemes across jurisdictions;
- Helping formulate national enforcement priorities and recommending legislative or regulatory reforms to close systemic vulnerabilities; and
- Advising the attorney general and deputy attorney general on significant fraud investigations, prosecutions, and related policy matters.
In a letter last week to House Appropriations Committee member Rep. Hal Rogers, DOJ's AAG for Administration Jolene Ann Lauria did not mention the White House's supervision when outlining the Division's scope. Instead, AAG Lauria noted the Division head would report directly to the deputy attorney general, akin to existing DOJ components.
Outside of norms, there are constitutional limits to the executive branch's structuring of agencies. For one, Congress must authorize any creation of new Senate‑confirmed positions, like the assistant attorney general. To remedy this issue, AAG Lauria wrote that DOJ plans to reuse one of the 11 existing assistant attorney general slots – made available after the Tax Division's elimination – so that no new statutory authorization would be needed.
In announcing the new structure, the administration pointed to recent and ongoing investigations into alleged large-scale fraud in public benefit programs – particularly in Minnesota – as illustrative of the type of conduct the Division will prioritize. The White House emphasized that the new Division will work closely with federal enforcement agencies to strengthen detection, investigation, and enforcement efforts.
Key Takeaways
The creation of the new Division signals a shift in how fraud matters are likely to be investigated and prosecuted. For organizations that interact with federal programs, receive federal funds, or operate in highly regulated sectors, the announcement points to a more coordinated and assertive enforcement environment.
Unclear reporting lines. How the Division head’s reporting line is structured – whether directly to DOJ executive leadership as DOJ's organizational chart suggests, or to the White House – will affect not only policy coordination but also potential defenses in litigation involving claims of political influence, selective prosecution, or vindictive prosecution.
Potential for Politicization. The fact that the Division could be supervised by the president and vice president may mean that it could focus on politically sensitive topics and on matters involving the administration's political adversaries, such as the investigation into fraud in federal programs administered in Minnesota under the Walz administration. The administration's reported consideration of Andrew Ferguson, who has played a high-profile role in promoting the administration's political objectives as the current chair of the FTC, would certainly suggest that the Division's efforts could have a political bent. Companies should stay informed, noting that matters of special interest to the administration may receive extra scrutiny.
Risk levels will rise wherever federal dollars are involved. Sectors touching federal funds or reimbursements – healthcare providers, higher education, defense and infrastructure contractors, fintech and lenders, and federally supported nonprofits – should expect heightened scrutiny of certifications and reporting.
The Division's scope will extend beyond federal funding. The White House fact sheet highlights fraud affecting "businesses" and "private citizens," beyond traditional federal‑funds cases. These efforts may overlap with efforts by the SEC, FTC, CFPB, and state attorneys general.
Early issue detection will matter more than ever. A national enforcement approach increases the likelihood that patterns of conduct – rather than isolated incidents – will drive investigations. In this environment, promptly identifying and addressing potential issues internally can significantly affect how matters are viewed by enforcement authorities.
Uncertainty is the word of the day. The creation of this new enforcement-focused Division within DOJ brings uncertainty, including its scope, structure, and how its supervision will work in practice. Open questions:
- The Division's role in approving (and rejecting) decisions by the other DOJ Divisions and the US Attorneys' Offices on charging, opening/closing investigations, and issuing subpoenas;
- The Division's role in administering or participating in DOJ's Corporate Whistleblower Awards Pilot Program;
- The role of Division lawyers in criminal trials;
- The Division's role in civil enforcement matters (e.g., False Claims Act matters, matters handled by the Antitrust and Civil Rights Divisions); and
- AG Bondi's role and influence in directing fraud investigations and charging going forward.
As these developments unfold, Steptoe's Investigations, White‑Collar Defense & Compliance group is closely tracking the legal and political implications for clients operating in federally funded spaces. Our team stands ready to help individuals and organizations navigate emerging risks and prepare for new realities.
