Beyond AML: FinCEN and FDIC Clarify That Section 314(b) Safe Harbor Extends to Fraud Prevention
The Financial Crimes Enforcement Network’s (FinCEN) June 12, 2026 guidance, along with the Federal Deposit Insurance Corporation’s (FDIC) July 9, 2026 Financial Institution Letter, signal a significant shift in how regulators expect financial institutions to use Section 314(b) of the USA PATRIOT Act.
Historically viewed as an anti-money laundering (AML) information-sharing tool, Section 314(b) is now expressly recognized as a mechanism for combating fraud. The updated guidance confirms that financial institutions may rely on the provision’s safe harbor to share information relating to suspected fraud, encourages real-time collaboration among institutions, and highlights the role of Section 314(b) in improving suspicious activity reporting and detecting illicit activity more quickly.
Our latest blog post examines the agencies’ expanded interpretation of Section 314(b), including the broader range of fraud-related information that may be shared, FinCEN’s encouragement of joint suspicious activity report (SAR) filings and proactive information sharing, and the governance, compliance, and supervisory considerations for institutions evaluating or expanding their Section 314(b) programs. The post also explores how the guidance reflects the continued convergence of fraud prevention and AML compliance and what these developments may mean for financial institutions’ information-sharing practices and supervisory expectations. Read the full post here.
HHS-OIG Decertifies New York Medicaid Fraud Control Unit, Escalating Federal Scrutiny of State Medicaid Fraud Enforcement
The Administration has taken another significant step in its effort to increase pressure on state Medicaid Fraud Control Units (“MFCUs”). On July 2, 2026, the United States Attorney’s Office for the Northern District of New York announced the U.S. Department of Health and Human Services Office of Inspector General (“HHS-OIG”) denied recertification of New York’s MFCU and suspended its federal funding effective July 1. The decision follows the Administration’s announcements earlier this year that it would closely scrutinize state MFCU performance, including through funding consequences for states perceived as failing to aggressively investigate and prosecute Medicaid fraud.
DOJ’s 2026 Health Care Fraud Takedown Highlights Increased Coordination and Data-Driven Enforcement
This week, DOJ announced the results of its 2026 National Health Care Fraud Takedown, which involved charges against 455 defendants, including 90 medical professionals, in connection with alleged schemes involving more than $6.5 billion in false claims submitted to Medicare, Medicaid, and other federal health care programs. The Takedown involved the participation of 50 state Medicaid Fraud Control Units and included cases in 56 federal districts and 45 U.S. states and territories.
New Clarity Emerges on DOJ’s Fraud Enforcement Reorganization
In remarks delivered on June 3, 2026, at the American Conference Institute’s Global Anti-Corruption, Ethics & Compliance Conference in New York City, Assistant Attorney General A. Tysen Duva, the head of the U.S. Department of Justice’s (“DOJ”) Criminal Division, provided the clearest public indication to date of how DOJ intends to divide fraud enforcement responsibilities between the Criminal Division’s Fraud Section and the newly created National Fraud Enforcement Division (“NFED”).
Under the emerging structure, NFED will focus on government program fraud, i.e., criminal offenses involving public payers and public systems, including taxpayer-funded programs, while the Criminal Division’s Fraud Section will remain focused on private-sector market, consumer, and corporate fraud matters—a traditional strength of the Unit previously known as Market Integrity & Major Frauds, which will remain part of the Criminal Division. Duva further emphasized that the Fraud Section will be focusing on securities and major financial fraud schemes, global fraud, and prediction markets, and is actively looking to further build capacity by hiring talented lawyers.
The remarks largely confirm earlier expectations that DOJ would eventually provide greater clarity regarding the respective roles of the Criminal Division and NFED following NFED’s creation. We examine what Duva’s comments reveal about DOJ’s enforcement priorities, staffing changes, and the implications for future enforcement activity.
Tariff Enforcement at the Forefront: Importer Agrees to Pay $549.5 million in Largest-Ever Trade-Related False Claims Act Settlement
On May 12, 2026, the Department of Justice (“DOJ”) announced a $549.5 million settlement with Perfectus Aluminum Acquisitions LLC and four affiliated companies to resolve allegations that they violated the False Claims Act (“FCA”) by evading customs duties. This settlement is the largest trade-related settlement under the FCA.
The action was initiated by qui tam cases brought by individuals who worked for U.S.-based competitors and the Aluminum Extrusion Counsel and ultimately coordinated through the DOJ’s Trade Fraud Task Force, which involved cooperation between DOJ and the Department of Homeland Security. This case highlights the increasing use of the FCA to hold importers liable for the underpayment of customs duties, the Administration’s commitment to enforcing U.S. customs laws, and the potential for competitors and former employees to harness the FCA to motivate federal investigations into allegations of trade fraud.
This post examines the settlement and discusses its implications for importers, manufacturers, and other companies facing customs and trade enforcement risk.
Three Potential Benefits, One Powerful Incentive: NDIL’s New Individual Self-Disclosure Program
On May 14, 2026, the U.S. Attorney’s Office for the Northern District of Illinois (NDIL) announced a new Individual Self-Disclosure Program offering qualifying individuals three potential forms of relief in exchange for voluntary self-disclosure and cooperation: letter immunity, a deferred or non-prosecution agreement, or criminal prosecution with substantial sentencing relief. The Program’s express three-tier structure distinguishes it from many other federal self-disclosure programs, which generally focus on the possibility of a non-prosecution or deferred prosecution agreement. To qualify, individuals must provide a complete and truthful proffer, cooperate fully with law enforcement, testify if required, and disgorge any criminal proceeds, among other requirements. This post summarizes the Program’s key features and highlights how it compares to similar self-disclosure initiatives adopted in other jurisdictions.
New U.S. SEC Enforcement Director David Woodcock Signals Continued “Back to Basics” Approach
New SEC Enforcement Director David Woodcock used his first public remarks to signal continuity with Chairman Paul Atkins’s “back to basics” agenda, emphasizing “quality over quantity” and a focus on cases involving real investor harm rather than technical violations. Woodcock identified key enforcement priorities and announced reinstitution of the Retail Fraud Working Group to focus specifically on protecting retail investors.
“Don’t Wait”: DOJ Criminal Division Chief Signals Faster Disclosure Expectations and Uptick in Corporate Enforcement
On May 7, 2026, Assistant Attorney General A. Tysen Duva used his first major speech to the compliance community since DOJ’s March 2026 rollout of its department-wide Corporate Enforcement Policy (CEP) to deliver a clear message: corporate enforcement activity is expected to increase, companies should self-disclose misconduct early—even before completing internal investigations—and robust compliance programs remain central to DOJ’s expectations.