DOJ Creates National Fraud Enforcement Division: What It Means for Fraud Enforcement in America

Takeaways

• Several areas of federal criminal prosecution, including health care fraud, have been pulled under the umbrella of the new National Fraud Enforcement Division (“NFED”) of the Department of Justice (“DOJ”), with the stated goal of “rapidly and substantially” increasing resources and creating a robust litigating division.
• DOJ is centralizing enforcement priorities by deputizing local U.S. Attorney’s Offices, and encouraging state and local governmental fraud-fighting authorities to align with the NFED.
• Priority areas of the NFED are yet to be announced, although we expect them to align with the priorities targeted by the Trump Administration in its other enforcement capacities, including “illegal” DEI, weaponization, and others.

On April 7, 2026, in support of the Trump Administration’s ongoing reorganization of the DOJ, Acting Attorney General Todd Blanche (“Acting AG Blanche”) announced the establishment of the National Fraud Enforcement Division, and a sweeping reorganization of the DOJ’s anti-fraud resources. The NFED’s authority represents a significant restructuring, centralization, and expansion of federal fraud prosecution and priorities with a message to the American public that “taxpayer-funded programs will be administered fairly and protected from theft.”       

In announcing the NFED, Acting AG Blanche stated the DOJ currently has over 8,000 fraud matters underway, and those cases represent only a fraction of the fraud affecting the country every day. Recent enforcement actions this week alone involved alleged healthcare and COVID-19 fraud schemes totaling over half a billion dollars in alleged taxpayer losses.

The NFED is intended to create a “comprehensive and coordinated approach to investigating and prosecuting fraud against taxpayer dollars and taxpayer-funded programs,” as increasingly “sophisticated and opportunistic” fraud schemes require a centralized response. DOJ stated it intends to use the NFED to zealously prosecute fraud on the taxpayer by “coordinating with agencies responsible for administering benefit programs; partnering with federal, tribal, state, territorial, and local law enforcement on fraud-fighting efforts; developing systems and processes that ensure efficient identification of fraud against taxpayer dollars; and equipping prosecutors and law enforcement with state-of-the-art tools and resources needed to bring criminal actors to justice.”

Structure of NFED

NFED and its newly confirmed head—Assistant Attorney General Colin McDonald, a former Assistant United States Attorney for the Southern District of California—assumes operational control over three existing litigation components within the Criminal Division: the Tax Section; the Health Care Fraud Unit of the Fraud Section; and the Market, Government, and Consumer Fraud Unit of the Fraud Section.

Additional criminal units, and potentially civil enforcement areas, may be added to the NFED in the near future.

Effective immediately, the NFED assumed control over the priorities and allocation of resources within these identified Criminal Division units, in line with messaging from DOJ earlier in 2026 that the NFED would replace, absorb, or “take over” existing units. According to Acting AG Blanche, the consolidation and realignment of relevant resources is necessary to “avoid duplication, draw clear lines of effort between divisions, minimize layers of bureaucracy, centralize relevant expertise, and maximize results.”

State, Local, and District-Level Presence      

To ensure centralization of enforcement priorities, each U.S. Attorney’s Office will designate an experienced prosecutor to be detailed in-place to the NFED within 21 days. Acting AG Blanche stated that this amounts to “an additional 93 prosecutors in every district across the country devoted to the mission of combating fraud,” embedding the NFED’s enforcement priorities in every federal judicial district.

The NFED also encourages cooperation with state and local governments. As part of the NFED’s development and expansion nationwide, the Division is granted the authority to establish and/or refocus grant programs to “enable state and local prosecutors to join the mission” of the NFED.

The National Fraud Detection Center         

Leveraging the DOJ’s data analytics capabilities, the NFED will establish a National Fraud Detection Center in coordination with the Justice Management Division, relevant law enforcement agencies, and agency inspectors general. The Center’s stated purpose is to identify fraud across taxpayer-funded programs and generate investigative leads. It will also coordinate with the White House Task Force to Eliminate Fraud, which was established last month by Executive Order 14395.

Civil-Criminal Coordination           

The Civil Division is required to designate a liaison to the NFED to ensure the DOJ pursues both civil and criminal enforcement tools in fraud cases. This means entities that do not face criminal charges may still face significant civil liability, including under the False Claims Act. At this point, the Civil Division, Fraud Section, Commercial Litigation Branch will not be absorbed into the NFED.  This important unit handles False Claims Act cases at the Main Justice level.

Legal and Practical Implications

Healthcare Industry

The NFED’s immediate assumption of control over the Health Care Fraud Unit consolidates criminal Medicare enforcement within a single command structure. This follows recent enforcement activity, including the “Operation Never Say Die” arrests in Southern California involving alleged Medicare hospice fraud exceeding $50 million. The Administration’s White House anti-fraud task force has also focused attention on state-level healthcare program administration. Healthcare providers, billing entities, and program administrators should anticipate continued scrutiny and should review their compliance programs accordingly.

Government Contractors          

The inclusion of the Market, Government, and Consumer Fraud Unit within the NFED, combined with the directive to leverage both civil and criminal enforcement tools, has direct implications for entities receiving federal funds. The False Claims Act’s qui tam provisions remain a significant enforcement mechanism. The NFED’s enhanced coordination infrastructure may accelerate the government’s response to whistleblower referrals and may result in a larger number of government-initiated False Claims Act investigations.

Potential Legislative and Regulatory Changes    

A mandated review of existing fraud laws, regulations, and guidelines, with a requirement to recommend strengthening measures to the Deputy AG, signals that statutory or regulatory changes may follow. EBG will be monitoring any subsequent legislative proposals or regulatory amendments that emerge from this review.

Conclusion

The NFED represents a structural shift in how the federal government organizes its fraud prosecution capabilities. By consolidating existing units, leveraging dedicated prosecutors in every federal district, establishing a centralized detection center, and mandating interagency coordination, the DOJ is attempting to create a more unified framework for pursuing fraud against taxpayer-funded programs. The full scope of the NFED’s impact will become clearer over the next 120 days and as enforcement priorities are established in practice. EBG will continue to track these developments closely.