Overview, Structure, and Function

On January 8, 2026, the Trump administration announced the creation of the Department of Justice (DOJ)’s new Division for National Fraud Enforcement. The stated goal of the division will be to enforce federal criminal and civil law statutes with a focus on federal government programs, federally funded benefits, businesses, nonprofits, and private citizens. A newly soon-to-be-appointed Assistant Attorney General (AG) will lead the DOJ’s efforts to investigate and prosecute fraud affecting the federal government by coordinating complex, multi-district fraud investigations nationwide. The nominee for the position will require Senate confirmation.

Who will oversee the proposed division remains unclear. In a substantial break from tradition, Vice President JD Vance stated that the new Assistant AG heading the division will be supervised directly by him and President Donald Trump. But DOJ later contradicted that statement in a January 16 letter to the House Subcommittee on Commerce, providing an organizational chart showing the division will report to the Deputy Attorney General.

The new division will have multiple functions, including:

• Overseeing the enforcement of federal fraud statutes affecting government programs and taxpayer funds;
• Coordinating closely with U.S. Attorney’s Offices and other federal agencies;
• Developing national fraud enforcement priorities and policy recommendations; and
• Supporting legislative or regulatory reforms to address perceived systemic fraud risks.

The structure of the new enforcement division will be distinct and separate: the division and DOJ’s existing fraud enforcement groups are not expecting to work together. The new White House–run division will be insulated from the DOJ’s Criminal Division Fraud Section and the Civil Division Fraud Section, operating independently from those established enforcement arms. Once the newly appointed Assistant AG is confirmed, that individual will be responsible for building out the new office, including hiring attorneys and staff to support its operations.

Conflict of Authority? How Does This New Branch Differ from Prior DOJ Initiatives, Including the FCA Task Force?

Several aspects of the announcement pose unanswered questions regarding the structure of the operation and the justification for creating the branch. For example, it is unclear how the new division will be coordinating and doing business, especially since the announcement indicates a lack of the DOJ’s Criminal and Civil divisions’ fraud sections' involvement, which have decades of experience coordinating government-program fraud investigations. While Vice President Vance suggested that the new office would take over the function, the DOJ’s January 16 letter stated that the division would include at least some existing DOJ resources. Additionally, no enforcement tool was announced or created for this effort, although the False Claims Act will likely serve as a key statutory enforcement mechanism for the new division. There remain many questions about how the new fraud enforcement division will be staffed and how direct White House oversight would impact its prosecutions.

Additionally, the rationale underlying the announcement appears intertwined with a heightened focus on alleged misconduct in Minnesota, with the specific reference to “criminal illegal aliens,” defendants of “Somali descent,” references to a YouTuber and content creator who alleged fraud in Somali-run childcare centers in Minnesota, and the blanket freezes to funding. The rollout frames the initiative as an expansion of efforts to combat daycare center misconduct in Minneapolis, and the nationwide fraud division acts as a direct response to alleged abuse. Taken together, these elements suggest that the justification for establishing the new division is closely linked to localized concerns in Minnesota, even as it purports to serve a national enforcement mission.

Takeaways – Be Ready

The main takeaway is that federal fraud enforcement will continue increasing substantially, and all federal fund recipients must be prepared for an investigation, whether it is initiated by the DOJ or White House. The risk to federal fund recipients has never been higher, as political incentives may play an increasing role in the administration’s enforcement priorities. In fact, just this month we’ve seen reports of investigations underway related to company DEI programs, presumably being pursued under the False Claims Act. Organizations that once relied on predictable enforcement patterns should expect greater uncertainty and broad‑based investigative activity, making early risk assessments and legal preparedness essential.

Although the form and scope may differ in 2026 from traditional federal investigative areas, organizations and individuals that receive federal funds or participate in federally supported programs should expect sustained focus on compliance, reporting accuracy, and internal controls governing the use of government resources. Cozen O’Connor’s team is available to help with any internal reviews or investigations related to this incentive or other civil or criminal investigations.