In August, we wrote that DOJ’s newly created National Fraud Enforcement Division (Fraud Division) marked the arrival of an “enforcement maelstrom.” We described it as an apparatus combining massive resource allocation, data science, and AI capabilities, and a willingness to partner with external actors to pursue fraud across the American economy. Noting that one of the Fraud Division’s five specialized litigating sections would be devoted to corporate enforcement, we highlighted that the Division’s stated priorities included “holding organizations accountable while rewarding voluntary self-disclosure, cooperation, and remediation.” We now know more about how that section will operate.
On October 1, 2026, Assistant Attorney General Colin M. McDonald issued Directive 26-12, titled “Corporate Enforcement in the Fight Against Fraud”, to all Fraud Division personnel. Directive 26-12 states that Division prosecutors “will take an aggressive, all-tools approach to investigating and prosecuting our health care, government, tax, and trade fraud priorities.” It also sets out the most concrete roadmap yet for how the Division will choose, investigate, and resolve corporate fraud cases. Less than a week later, on October 7, 2026, AAG McDonald followed with Directive 26-13, titled “A Comprehensive Approach in the Fight Against Fraud”, which describes the broader toolkit the Division will bring to bear on the same cases.
What Directive 26-12 Does
Centralize corporate enforcement. Directive 26-12 puts the Division’s Corporate Enforcement Section (Section) at the center of every corporate case. Prosecutors must work closely with the Section “at all phases of corporate investigations, from case intake through completion of any corporate resolution or litigation.” Indeed, Directive 26-12 requires prosecutors to report all ongoing corporate investigations to the Section Chief by October 8, 2026. Going forward, the Section must be promptly notified of new corporate investigations and of major developments in ongoing cases. The Section will also have primary responsibility for monitoring compliance with corporate criminal resolutions, including compliance-program enhancements and disclosure obligations. Directive 26-12 is candid about why: this division of labor “will free up resources in the prosecuting sections to pursue additional individual and corporate cases.”
Set investigative priorities. When opening and conducting corporate investigations, prosecutors are directed to prioritize four categories of fraud:
- health care fraud, including controlled substance distribution and violations of the Federal Food, Drug, and Cosmetic Act;
- schemes involving procurement, government contracts, and other government functions;
- significant revenue evasion; and
- tariff evasion, importation fraud, and forced labor.
Establish guiding criteria. The most consequential feature of Directive 26-12 may be its list of ten factors that prosecutors “must place great weight on” when deciding whether to bring charges and negotiating pleas or other agreements. These include (verbatim):
- Knowledge of or involvement in fraud scheme by corporate management.
- Efforts to conceal fraud from government agencies or auditors or otherwise impede or obstruct a government function or oversight.
- Conduct that furthers the scheme lasting three years or more.
- Actions that threaten the safety or security of Americans, including military readiness.
- Conduct that causes substantial financial hardship to a taxpayer funded program or government function.
- Conduct that affects multiple taxpayer funded programs or government functions.
- Conduct that affects three federal districts or more.
- Conduct that results in financial harm to twenty-five or more victims or $25 million or more in loss.
- Conduct that involves the exfiltration of American dollars to support foreign adversaries.
- Conduct that involves immigration offenses.
The list is expressly non-exhaustive, and prosecutors must “[i]n all circumstances” follow the Department-wide Corporate Enforcement and Voluntary Self-Disclosure Policy (the “CEP”).
Whistleblower incentives. Directive 26-12 notes that the Division, through the National Fraud Detection Center, is “proactively generating leads and opening new individual and corporate fraud investigations at a rapid pace.” Recognizing that these efforts can be aided by whistleblowers, Directive 26-12 directs Division leadership to “design and implement policies and programs that appropriately incentivize whistleblowers to bring forward credible information pertaining to fraud[,]” including whistleblowers “who participated in the criminal conduct.”
Implications for FCA Stakeholders
Directive 26-12 governs criminal corporate enforcement and does not mention the FCA by name. Even so, the FCA impact is clear.
First, Directive 26-12’s priorities closely track the FCA’s core subject matter. Health care fraud, procurement and government contracting fraud, and customs and tariff evasion have long been central subjects of FCA litigation. Several of the “great weight” factors also map directly onto facts that civil fraud cases routinely develop. These include harm to “taxpayer funded program[s],” conduct affecting multiple programs, and multi-year schemes. As a result, the same billing pattern, coding anomaly, or pricing practice that prompts a civil investigative demand or qui tam complaint may now be more likely to meet the criteria for a criminal corporate investigation. That is particularly true where the conduct spans three or more years or exceeds $25 million in loss. Targets embroiled in FCA matters in those sectors should have outside counsel assess criminal exposure early and continue to reassess it as the matter develops.
Second, the data pipeline we have been tracking now feeds a criminal corporate engine. In our February and May posts, we explored how DOGE’s Medicaid database release and the FOCUS initiative positioned data-mining relators as partners in FCA enforcement. In August, we observed that the Fraud Division was building its own internal analytics capacity so that DOJ could pursue fraud “without waiting for relators to bring cases to its attention.” Directive 26-12 confirms that this capacity is already producing corporate cases “at a rapid pace.” It also requires that those cases be channeled through a centralized section built to maximize “efficiency, consistency, and results[.]” Statistical outliers in claims data are no longer only a qui tam risk; they now may be the focus of corporate cases.
Third, the self-disclosure calculus has become more complicated. The CEP referenced in Directive 26-12 states that DOJ will decline to prosecute companies that voluntarily self-disclose to “an appropriate Department criminal component,” fully cooperate, and timely remediate, absent aggravating circumstances. The CEP is explicit, however, that disclosures made only to “civil enforcement agencies generally do not qualify” (though such disclosures may count in certain circumstances toward cooperation and remediation). A company that discovers potential fraud involving government programs must now weigh civil and criminal disclosure strategies together. Under the CEP, a declination still requires payment of all disgorgement, forfeiture, and restitution. The CEP also gives companies only 120 days after a whistleblower’s internal report to self-report and still qualify for a declination.
Fourth, relators may gain a new avenue, and culpable insiders may gain a new incentive. Directive 26-12’s call for programs incentivizing/rewarding whistleblowers, including participants in the misconduct, could give insiders an additional path alongside the FCA’s qui tam provisions. How any such program will interact with the FCA’s relator-share framework remains to be seen. For relators and their counsel, however, the message echoes the one DOJ sent through FOCUS: DOJ wants “credible information” from rigorous sources.
Implications for DOJ’s Broader Pursuit of Fraud
Beyond the FCA context, Directive 26-12 is the latest sign that the Fraud Division is moving from announcement to execution. The August memo built the structure. Directive 26-12 now gives prosecutors their operating instructions: mandatory reporting to the Corporate Enforcement Section, centralized oversight, defined priorities, and weighted charging factors.
Notably, Directive 26-12 pairs its aggressive rhetoric with a commitment to “firmly guard against overbroad corporate enforcement—rightly dividing between shades of corporate malfeasance—lest we interfere with legitimate business operations.” The “great weight” factors therefore cut both ways. They tell companies what will raise the stakes, including management involvement, concealment, duration, and scale. Yet in so doing, they also give defense counsel a framework for arguing that a particular matter falls outside the Division’s priorities and/or does not merit criminal treatment. Because the Section must be involved in every corporate case, those arguments should receive more consistent treatment than in the past.
Not surprisingly, given the enormous sums involved, Directive 26-12 lists healthcare fraud as the Division’s first priority in opening and conducting corporate investigations. Under the CEP, effective compliance is judged by factors such as risk assessment, testing, resources, and the independence of the compliance function. Companies in the health care sector should expect their compliance programs to be evaluated against those standards.
Directive 26-13: A Comprehensive Approach in the Fight Against Fraud
If Directive 26-12 tells prosecutors which corporate cases to pursue, Directive 26-13 tells them how to pursue fraud cases generally. Invoking enforcement tools recently delegated by the Attorney General under 28 C.F.R. § 0.70, it directs Fraud Division prosecutors to use “every available tool to identify the full scope of the fraud schemes we investigate” and to hold accountable “all persons and entities that knowingly enable, facilitate, conceal, or profit from those schemes.” It expressly cross-references Directive 26-12, confirming that the Corporate Enforcement Section will apply that Directive’s factors and analysis and its “suite of enforcement tools to the Division’s priorities.” Several features warrant attention from companies and FCA stakeholders.
Charge stacking across tax, securities, and consumer fraud. Prosecutors must, “in every case,” assess whether there is reason to believe a tax violation has occurred and, where tax charges may materially advance the case or asset recovery, invite IRS-CI to evaluate the tax dimensions of the conduct. The Public Trust and Financial Integrity Section will prioritize securities fraud and market misconduct tied to government programs and contracts and to health care, tax, or trade fraud—reflecting Directive 26-13’s concern that publicly traded government contractors “can defraud both the government and individual investors.” That Section will also correlate “federal program, contract, and funding data against market activity,” creating what Directive 26-13 calls “an unprecedented intelligence function to generate proactive matters.” Prosecutors are likewise told to consider consumer-focused charges, such as mail, wire, and bank fraud and aggravated identity theft. For companies, a single government-program issue may now carry tax, securities, and consumer-fraud dimensions in addition to traditional FCA and health care fraud exposure.
Early asset seizure and civil injunctions. Directive 26-13 instructs prosecutors to “prioritize early seizure of fraud proceeds and early disruption of fraud schemes,” coordinating with the Asset Recovery Section at all stages. The listed tools include pre-indictment restraining orders and seizure letters, in rem forfeiture, seizure of websites and other digital property, and civil actions under 18 U.S.C. § 1345 to enjoin government fraud and health care offenses and to restrain the dissipation of proceeds, as well as prejudgment remedies under 28 U.S.C. §§ 3101-3105, including attachment, garnishment, and the appointment of receivers. These are civil-side remedies wielded by criminal prosecutors, and they can be deployed before any charge is filed. Companies under investigation in priority sectors should plan for the possibility that DOJ will move against accounts and operations early, potentially before the company has an opportunity to make its case.
Proactive cooperators. Complementing Directive 26-12’s call for whistleblower incentives, Directive 26-13 directs prosecutors to “leverage proactive cooperators and undercover law enforcement operations[.]” Cooperators “will not get a free pass”: each must accept responsibility, forfeit proceeds, and pay restitution. In evaluating cooperation, prosecutors will consider whether the cooperator disclosed criminal activity “previously unknown to law enforcement” and whether the cooperation materially advanced an investigation. Together, the two Directives signal that insiders—including participants in the misconduct—will have strong reasons to come forward early, which further compresses the window for a company to self-disclose under the CEP.
Detention and sentencing. Finally, Directive 26-13 directs prosecutors to assess flight risk early and seek detention “in all appropriate circumstances[,]” and to pursue aggressive sentencing. Every sentencing presentation must address general deterrence, including how a meaningful sentence will deter “similarly situated individuals and organizations[.]” Prosecutors are to seek all supported Guidelines enhancements, pursue upward variances where warranted, seek restitution, forfeiture, and fines reflecting “the full scope of the offense[,]” and consider affirmative appeals of sentences they view as unreasonable. For individual executives, the stakes of a fraud investigation have risen accordingly.
Conclusion
Each development we have covered this year has built on the one before it. The DOGE database release opened the data. The FOCUS initiative enlisted data-mining relators. The Fraud Division supplied the personnel and analytics. Directive 26-12 now supplies the corporate enforcement playbook, and Directive 26-13 supplies the tools to execute it. For potential defendants, the practical takeaways are straightforward:
- stress-test compliance programs against both data-driven detection and Directive 26-12’s “great weight” factors;
- treat FCA exposure in priority sectors as potential criminal exposure, including tax, securities, and consumer-fraud exposure;
- develop internal reporting and disclosure protocols that account for the CEP’s criminal-component requirement and its 120-day whistleblower window; and
- prepare for early asset restraints, civil injunctions, and other pre-charge disruption measures under Directive 26-13.
The maelstrom we described in August is no longer gathering—it has arrived.
