DOJ Rule Filing Helps Make White Collar Fraud Enforcement Restructuring Final

On August 18, 2026, the U.S. Department of Justice (DOJ or the Department) published a final rule formally establishing the National Fraud Enforcement Division (NFED or Fraud Division) within DOJ’s organizational regulations and defining the authorities of its Assistant Attorney General. Effective August 24, the rule amends the regulations governing both the Fraud Division and the Criminal Division, formally transferring certain authorities to NFED and giving the new Division broad jurisdiction over criminal fraud matters.

The rule largely formalizes changes first announced in April 2026, when then-Acting Attorney General Todd Blanche issued a memorandum announcing NFED’s creation and subsequently clarified by DOJ leadership. As Sidley discussed in April, Blanche immediately placed several Criminal Division units under NFED’s operational control and directed DOJ to determine which personnel and resources should be permanently reassigned. And as we discussed in June, Criminal Division Assistant Attorney General A. Tysen Duva described an emerging division of labor in which NFED would focus on fraud involving taxpayer funded programs, while the Criminal Division’s Fraud Section would focus on private sector, market facing, and corporate fraud. The final rule now embeds NFED in DOJ’s formal structure, while preserving more flexible jurisdictional lines than operational division of labor might suggest.

The Rule Formalizes NFED’s Fraud Jurisdiction

Blanche’s April 7 memorandum created NFED as a standalone litigating division within DOJ with a core mission focused on fraud against taxpayer dollars and taxpayer funded programs. It also immediately transferred operational control of the Criminal Division’s Tax Section, Health Care Fraud Unit, and Market, Government, and Consumer Fraud Unit to NFED. DOJ’s Office of Legal Policy was separately directed to identify any necessary changes to the Justice Manual, regulations, and other guidance resulting from the new structure. The final rule implements that restructuring.

The final rule, codified at 28 C.F.R. § 0.70, assigns NFED responsibility for six principal categories of matters:

• criminal fraud proceedings generally, except certain antitrust matters;
• all criminal proceedings arising under the internal revenue laws;
• trade fraud matters, including conduct involving imports, customs duties, tariffs, external revenue, and foreign commerce;
• criminal proceedings involving money owed to or paid by the United States;
• fraud or abuse involving health plans; and
• healthcare fraud and controlled substance distribution and diversion schemes.

Although the final rule does not expressly reference the U.S. Foreign Corrupt Practices Act (FCPA), FCPA enforcement will likely remain principally within the Criminal Division’s traditional portfolio. However, this may not preclude NFED from taking on new FCPA matters that implicate taxpayer-funded programs or other areas within its jurisdiction. Companies with potential dual exposure should therefore continue to monitor how DOJ approaches such matters as the respective roles of NFED and the Criminal Division in FCPA enforcement continue to develop.

The final rule also gives NFED substantial flexibility beyond those enumerated categories. The Attorney General or Deputy Attorney General may assign NFED additional cases or categories of cases, and NFED may accept matters by agreement with another Assistant Attorney General. Once NFED is pursuing an investigation within its assigned jurisdiction, it may prosecute other federal offenses identified during that investigation, even if those offenses would not independently fall within the categories listed in § 0.70. NFED also has authority to pursue related injunctions, restitution, forfeiture, damages, and penalties.

The Criminal Division Retains Broad Authority

As Sidley discussed in June, Duva described DOJ’s developing allocation of resources as turning significantly on the nature of the victim and funds at issue. Under that operational model, NFED would focus on fraud against government programs and public payers, while the Criminal Division’s Fraud Section would remain focused on private sector, financial market, consumer, and corporate fraud, including securities and major financial fraud, global fraud, and other complex misconduct.

But the final rule does not codify that operational division of labor as a clean jurisdictional boundary. New § 0.70(a) gives NFED authority over “criminal proceedings involving criminal frauds” generally, subject to the Antitrust Division’s jurisdiction. At the same time, amended § 0.55(b) continues to assign the Criminal Division “[c]ases involving criminal frauds,” except for tax fraud and health plan fraud specifically carved out for NFED, as well as certain antitrust matters. The rule does not otherwise resolve that overlap. Instead, it expressly preserves flexibility by allowing the Attorney General or Deputy Attorney General to assign additional matters to NFED and permitting NFED to take matters by agreement with another Assistant Attorney General.

The regulations therefore provide both Divisions with broad fraud authority while giving DOJ leadership significant discretion over how particular matters are allocated. The public/private distinction described by DOJ leadership remains useful for understanding the Divisions’ expected areas of emphasis, but it is not a rigid jurisdictional rule. As a result, the substantive offense under investigation may not by itself determine which DOJ component ultimately handles a matter, particularly where the conduct implicates both public- and private-sector interests.

Other Changes in the Final Rule

The final rule makes several additional changes that further implement the reorganization of DOJ’s fraud apparatus. First, the rule removes the provision that assigned all criminal tax proceedings to the Criminal Division. These matters are now expressly assigned to NFED under § 0.70(b).

Second, DOJ amended the Criminal Division’s authority over controlled substance litigation by deleting the word “all.” The rule explains that this change clarifies that the Criminal Division does not have exclusive authority over those offenses, allowing NFED to prosecute controlled substance distribution and diversion charges when they arise within its healthcare fraud jurisdiction.

Third, new § 0.71 gives NFED leadership certain authorities that mirror powers already held by the Criminal Division, including authority relating to special grand juries and preservation of testimony in organized crime matters within NFED’s jurisdiction. DOJ also amended its general delegation regulation to allow Assistant Attorneys General to redelegate all specified litigating authority to Section Chiefs, giving division leadership greater flexibility in managing cases.

These changes are technical in form but collectively reinforce NFED’s status as an independent litigating division with a broad enforcement mandate.

Key Takeaways:

The final rule does not represent a new enforcement approach so much as a formalization of a restructuring DOJ has been implementing since at least April. It also underscores that the operational division of labor described by DOJ leadership is more flexible at the regulatory level. Specifically:

• NFED may pursue offenses outside its core mandate that are discovered during an authorized investigation. The rule permits NFED to prosecute “other federal offenses” identified during investigations within its jurisdiction, paralleling the Criminal Division’s authority to pursue related offenses in matters within its own portfolio. Companies facing an NFED investigation therefore should not assume that the Division’s charging authority will be limited to the fraud theory or statutory provision that initially brought the matter within its jurisdiction.
• Case assignment remains flexible and centralized. The Attorney General and Deputy Attorney General retain authority to assign additional matters to NFED notwithstanding the ordinary regulatory allocations, and NFED may take matters by agreement with the Assistant Attorney General who otherwise has authority over them. The regulations therefore leave Main Justice substantial discretion to allocate matters based on the facts of a particular investigation, enforcement priorities, expertise, and resources without being constrained by a rigid public/private divide.
• Companies may face scrutiny from both Divisions where misconduct includes both public- and private-sector interests. DOJ’s June description of two fraud enforcement “lanes” remains a useful guide to the Divisions’ areas of emphasis, but matters involving healthcare, government contracting, financial services, trade, or other areas may implicate the interests of both Divisions.
• The Departmentwide CEP remains effective as to both Divisions. As we discussed in June, DOJ’s Departmentwide Corporate Enforcement and Voluntary Self-Disclosure Policy (CEP) applies across litigating divisions, including NFED and the Criminal Division. Companies considering voluntary self-disclosure therefore remain subject to the same Departmentwide framework regardless of which Division handles the matter.

Taken together, the rule formalizes a white collar enforcement structure DOJ has been developing for several months. NFED and the Criminal Division retain distinct areas of emphasis, but the final rule preserves substantial flexibility in both case assignment and prosecutorial authority. The precise boundary between the two Divisions may continue to develop in practice, but NFED’s role as a permanent component of DOJ’s white collar enforcement apparatus is now clearer.

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DOJ’s final rule, published in the Federal Register, is available here.

This post is as of the posting date stated above. Sidley Austin LLP assumes no duty to update this post or post about any subsequent developments having a bearing on this post.