The U.S. Department of Justice (DOJ) is further consolidating its fraud enforcement, signaling a sharper focus on crimes against the federal government and trade issues and a potential retreat from consumer-focused enforcement.
On April 7, Acting Attorney General Todd Blanche announced the creation of a National Fraud Enforcement Division (Fraud Division) within the DOJ to “zealously investigate and prosecute those who steal or misuse taxpayer dollars.” Leading that division is Colin McDonald, a member of the Weaponization Working Group and previously a line attorney in the U.S. Attorney’s Office for the Southern District of California. The government’s press release regarding this new division promises a focus on “financial integrity of our government and the tax system that supports it.”
Background
Prior to April 7, DOJ’s fraud-fighting efforts were concentrated primarily in three of its litigating divisions: Civil, Criminal and the United States Attorney’s Offices. Within the Civil Division, Civil Frauds and the Consumer Protection Branch (CPB) were the two offices focused on this, and in the Criminal Division, the Fraud Section was the key component. The U.S. Attorney’s Offices also handle fraud prosecutions, both in their own districts and in collaboration with the Civil or Criminal divisions.
Generally speaking, the Fraud Section and Civil Frauds handled much of what the new Fraud Division seems intended to address. CPB, on the other hand, brought civil and criminal cases addressing consumer fraud cases, covering everything from Jamaican lottery scams, to poisonous chemicals sold as Covid cures, to inappropriate dispensing of opioids.
In 2025, DOJ broke up the CPB, sending its criminal functions to the new Market, Government and Consumer Fraud (MGC) Unit (housed in the Criminal Division’s Fraud Section) and its affirmative civil functions to the new Enforcement & Affirmative Litigation Branch in Civil Division. DOJ’s public-facing descriptions of these two units both state that they address consumer fraud issues.
Creation of the Fraud Division
When the president first announced his intention to create the Fraud Division in January 2026, the announcement identified that it would address fraud “targeting Federal government programs, Federally funded benefits, businesses, nonprofits, and private citizens nationwide.” However, the “core mission” of the Fraud Division now makes no mention of fraud against private citizens. Indeed, there is no mention of prosecuting fraud against individuals (or private entities) in AG Blanche’s memorandum or the press release.
We understand that the new division will now house what was briefly the MGC Unit (or at least the litigating portions of that unit) that were formerly in CPB as well as several additional units from within the Criminal Division.
While much is still uncertain, the new division may also become the home of Civil Frauds and the Enforcement and Affirmative Litigation Branch. The new division may also take on some of the responsibilities these units have traditionally had, as the DOJ’s litigating units get their authority pursuant to regulations, which are amended from time to time to move authority to pursue particular claims from one unit to another. The memorandum also states that each U.S. Attorney’s Office will designate one prosecutor to work on projects under the auspices of the Fraud Division. Further, the new division stands to take on the priorities stated in DOJ’s May 12, 2025, memo “Focus, Fairness, and Efficiency in the Fight Against White Collar Crime.”
Expectations for Prosecutions Based on these Changes
Given the recency of the change and the need for DOJ to create an infrastructure behind this organization, it is too early to see how this will impact ongoing cases or future matters, but there are several trends to watch for.
First, a new unit, with a new leader, will want to establish itself. We expect a number of high-profile indictments (and possibly civil enforcement actions, depending on whether the division assumes civil powers as well) as soon as the Fraud Division can find its footing. Based on recent trends, those cases are likely to focus on targets that have taken positions contrary to the administration’s agenda.
Second, much like the breaking up of the CPB initially, the move to the new division suggests a further pulling back from consumer litigation. The lack of any mention of a consumer focus in AG Blanche’s announcement is telling, as is the change of titles. We are continuing to watch to see whether the civil units are incorporated into the new division or have their powers transferred.
Third, we anticipate greater scrutiny on corporations that commit trade, tariff and customs fraud that correspond to the sharp increase in schemes by importers and foreign manufacturers—particularly from “Foreign Entities of Concern” (such as the People’s Republic of China)— to evade traditional international trade remedies, such as antidumping and countervailing duties. Given the imposition of President Trump’s aggressive tariff policy, we also expect scrutiny on schemes to reduce tariffs fraudulently, including misclassification of the “country of origin” of imported goods, illegal transshipment methods, money laundering and use of illicit forced labor (benefitting from China’s subjugation of its Uyghur minority in the Xinjiang region to create a pool of cheap labor that creates excess capacity exported around the world).
Fourth, the “core” focus on fraud against the government suggests fewer enforcement actions regarding purely private actors. On the one hand, that may give businesses a more free hand in the marketplace. On the other hand, an unregulated marketplace encourages a race to the bottom. That, in turn, may force private entitles to seek to bring matters to public authorities for enforcement or bring their own actions.
In summary, while it is not clear that the creation of a new Fraud Division will result in more anti-fraud enforcement activity than would been generated by the existing Civil and Criminal Divisions, it is very likely that this new division will seek to justify its existence by, at least initially, bringing some high-profile cases in the near term. Whether the new division can prove its value remains to be seen, as does the question of whether it will even survive into the next administration.