On October 1, 2026, the U.S. Department of Justice (“DOJ”) issued Directive 26-12, Corporate Enforcement in the Fight Against Fraud (the “Directive”), which sets out the priorities and approach that will govern the investigation and prosecution of corporate fraud by DOJ’s National Fraud Enforcement Division (“Fraud Division”). Issued by Assistant Attorney General Colin M. McDonald and addressed to all Fraud Division personnel, the Directive calls for aggressive enforcement against corporate misconduct, while continuing to recognize the value of voluntary disclosures, cooperation, and remediation.
Priority Areas for Fraud Investigations. The Directive instructs Fraud Division prosecutors to prioritize four categories of fraud schemes when opening and conducting corporate investigations, with health care listed first. These categories are:
- Health Care Fraud: Fraud involving the health care industry, including unlawful distribution of controlled substances and violations of the Federal Food, Drug, and Cosmetic Act.
- Government Fraud: Fraud involving procurement, contracts, and other government functions.
- Revenue Fraud: Schemes involving significant evasion of internal or external revenue.
- Trade Fraud: Fraud involving tariff evasion, the importation of goods or services, or forced labor.
The Directive also identifies several factors to which Fraud Division personnel must give significant weight when deciding whether to bring corporate charges or to negotiate a resolution. These factors include: management’s knowledge of, or involvement in, the misconduct; efforts to conceal fraud; misconduct lasting three years or more; conduct causing substantial financial hardship to a taxpayer-funded program or government function; conduct that affects three or more federal districts; conduct that involves immigration offenses; conduct that involves the exfiltration of American dollars to support foreign adversaries; and conduct causing financial harm to at least 25 victims or causing losses of $25 million or more. These factors are non-exhaustive; prosecutors may consider any other relevant factors, consistent with the Justice Manual and the Department-wide Corporate Enforcement and Voluntary Self-Disclosure Policy.
Corporate Enforcement Section. The Directive formalizes the role of the Fraud Division’s Corporate Enforcement Section, which will coordinate corporate investigations and promote consistent application of DOJ enforcement policies. The Corporate Enforcement Section will also have primary responsibility for evaluating companies’ compliance with the terms of corporate criminal resolutions.
Voluntary Disclosure, Cooperation, and Whistleblowers. Although the Directive signals heightened enforcement activity, it also affirms DOJ’s commitment to crediting companies that voluntarily disclose misconduct, cooperate with investigations, and undertake appropriate remediation. Prosecutors must continue to follow DOJ’s Department-wide Corporate Enforcement and Voluntary Self-Disclosure Policy. Additionally, the Directive instructs Fraud Division leadership to develop policies and programs that incentivize whistleblowers to report credible information concerning fraud.
Key Takeaways for Health Care Organizations. By placing health care fraud at the top of the Fraud Division’s corporate enforcement priorities, the Directive underscores the importance of effective compliance programs for health care organizations. In light of the Directive, health care organizations should consider reviewing their existing compliance policies, internal reporting mechanisms, and procedures for identifying, investigating, and remediating potential misconduct. Organizations should also evaluate their processes for escalating compliance concerns and for assessing whether voluntary disclosure may be appropriate. As DOJ prioritizes corporate fraud, proactive compliance efforts and timely responses to identified misconduct will remain important considerations in mitigating enforcement risk.
