The October 1 directive, Corporate Enforcement in the Fight Against Fraud, builds on the Fraud Division’s August announcement of its enforcement priorities and organizational structure, as discussed in our prior LawFlash, DOJ Sets Priorities for New National Fraud Enforcement Division. It instructs prosecutors to coordinate corporate matters through the division’s new Corporate Enforcement Section, identifies categories of cases that prosecutors should prioritize, and specifies 10 factors to which prosecutors must give “great weight” when making charging and resolution recommendations.
The directive also reinforces the US Department of Justice’s (DOJ’s) emphasis on voluntary disclosure while highlighting its expanding use of technology and data analytics to identify potential corporate misconduct and its continued efforts to incentivize whistleblowers.
For companies, the directive provides greater visibility into the factors that will drive corporate charging and resolution decisions, while underscoring the importance of promptly identifying and escalating potential misconduct as DOJ expands its fraud detection capabilities.
CENTRALIZED CORPORATE FRAUD ENFORCEMENT INFRASTRUCTURE AND PRIORITIES
The directive further operationalizes DOJ’s new Corporate Enforcement Section by directing prosecutors to coordinate with the section throughout corporate investigations, from case intake through resolution or litigation. It also requires Fraud Division prosecutors to report all ongoing corporate investigations to the chief of the Corporate Enforcement Section within seven days of the directive’s issuance. Going forward, the section must also be promptly notified of new corporate investigations and major developments in ongoing matters.
Notably, DOJ states in its directive that the new Corporate Enforcement Section will have primary responsibility for evaluating compliance with the terms of corporate criminal resolutions, including compliance program enhancements and reporting obligations. By centralizing post-resolution compliance oversight within the Corporate Enforcement Section, DOJ intends to “free up resources” to pursue additional individual and corporate cases.
The directive also identifies the types of corporate investigations that Fraud Division prosecutors should prioritize: fraud schemes involving healthcare; public trust or the financial integrity of Americans and markets, including procurement and government contracting; significant evasion of internal or external revenue; and tariff evasion, importation of goods or services, or forced labor. These priorities largely track those announced by the Fraud Division in August, as discussed in our prior LawFlash, DOJ Sets Priorities for New National Fraud Enforcement Division.
FACTORS IN CORPORATE CHARGING AND RESOLUTION DECISIONS
The directive’s most significant guidance for companies is its identification of factors that Fraud Division personnel “must place great weight on” when deciding whether to bring corporate charges and while negotiating pleas or other resolutions. Those factors include:
- Management involvement: Knowledge of or participation in the fraud scheme by corporate management.
- Concealment or obstruction: Efforts to conceal fraud from government agencies or auditors, or otherwise impede government functions or oversight.
- Duration: Conduct furthering the scheme for three years or more.
- Safety and security: Actions threatening Americans’ safety or security, including military readiness.
- Government program impact: Conduct causing substantial financial hardship to a taxpayer-funded program or government function.
- Breadth across programs: Conduct affecting multiple taxpayer-funded programs or government functions.
- Geographic scope: Conduct affecting three or more federal districts.
- Victims or losses: Conduct causing financial harm to 25 or more victims or losses of at least $25 million.
- Foreign adversaries: Conduct involving exfiltration of American dollars to support foreign adversaries.
- Immigration: Conduct involving immigration offenses.
While the list is expressly non-exhaustive, the factors identified by DOJ in its directive provide companies with more concrete insight into the facts likely to draw attention in Fraud Division matters. The 10 factors are specific to the Fraud Division and operate within, rather than replace, DOJ’s broader corporate enforcement framework, including the Principles of Federal Prosecution of Business Organizations and the department-wide Corporate Enforcement and Voluntary Self-Disclosure Policy (CEP).
The factors serve as additional considerations that Fraud Division prosecutors must heavily weigh when making charging and resolution recommendations within that broader framework.
While several factors reflect familiar considerations in corporate criminal enforcement, such as management involvement, concealment, duration, and magnitude of harm, others tie corporate charging considerations directly to the Fraud Division’s substantive priorities (e.g., national security, government programs, and immigration).
In addition, by identifying specific and concrete markers, such as conduct lasting at least three years, effects in three or more federal districts, 25 or more victims, and losses of at least $25 million, the directive gives companies benchmarks that may help identify matters that are likely to receive heightened scrutiny within the Fraud Division.
While DOJ components and US Attorney Offices may use internal guidelines or thresholds to inform investigative decisions, such criteria are not typically made public, and the figures identified here do not necessarily correspond to other numerical measures used elsewhere in the federal enforcement framework, including the US Sentencing Guidelines.
These figures do not appear to operate as charging thresholds or safe harbors, as the list is non-exhaustive, and charging decisions remain subject to DOJ’s broader corporate enforcement framework and prosecutorial discretion. But they may provide useful indicators for companies assessing the potential significance of misconduct early in an internal investigation.
EMPHASIS ON VOLUNTARY DISCLOSURE AND ENHANCED FRAUD DETECTION
The directive continues DOJ’s emphasis on incentivizing companies to voluntarily disclose misconduct, cooperate with government investigations, and remediate identified issues. Fraud Division prosecutors must continue to follow the department-wide CEP when evaluating corporate matters.
The Fraud Division is expanding its ability to identify potential misconduct independently, using increased resources including “state-of-the-art technology” and data analytics through the National Fraud Detection Center and partner components to generate leads and open new individual and corporate fraud investigations “at a rapid pace.”
From DOJ’s perspective, these enhanced detection capabilities provide companies with an additional incentive to self-disclose misconduct rather than risk identification by the government.
DOJ also intends to expand its focus on whistleblowers as another source of investigative leads. The directive instructs Fraud Division leadership to develop policies and programs that incentivize individuals to provide credible fraud information. This emphasis is consistent with DOJ’s broader efforts in recent years to expand incentives for individuals to report corporate misconduct, including through its Corporate Whistleblower Awards Pilot Program, launched in 2024 and subsequently expanded and revised to cover additional enforcement priorities.
POTENTIAL IMPACT ON COMPANIES
DOJ’s new directive provides companies with greater visibility into the types of corporate fraud matters the Fraud Division intends to prioritize and the factors its prosecutors will consider in determining whether and how to pursue corporate charges. Companies operating in DOJ’s priority areas (e.g., healthcare, government contracting, tax, and trade) should assess existing compliance programs and internal controls.
It may be useful to review certain programs that intersect with DOJ’s priority areas to consider whether they could benefit from heightened oversight, increased training, or additional resources.
Companies conducting internal investigations may also want to focus on the facts relevant to DOJ’s specified charging and resolution factors early on, including management involvement, concealment, duration, financial harm, geographic scope, and effects on government programs. Those facts may become particularly important when evaluating potential remediation, cooperation, and voluntary disclosure.
Finally, the directive’s combination of enhanced government data analytics, increased whistleblower incentives, and continued benefits for voluntary self-disclosure places additional emphasis on the importance for companies to detect and assess potential misconduct promptly. As DOJ expands its data-driven detection capabilities and incentives for whistleblowers, companies considering voluntary disclosure may face an increasingly limited window in which to identify and report misconduct before the government learns of it through other means.
Companies should ensure their internal reporting, compliance, and investigation processes allow potentially significant misconduct to be assessed and disclosed by appropriate decisionmakers before DOJ independently identifies the conduct.
