Client Alert: White House Announces New Department of Justice Division Focused on National Fraud Enforcement

Jan 23, 2026

KEY TAKEAWAYS

On January 8, 2026, the White House announced the creation of the Division for National Fraud Enforcement, a new Department of Justice (DOJ) division to centralize and coordinate federal fraud enforcement nationwide, covering government programs, federally funded benefits, and private citizens.
The move reflects an intensified federal response to systemic fraud, following recent allegations of widespread misuse of federal and state welfare funds in Minnesota.
Vice President JD Vance emphasized that fraud enforcement is now a top-tier national priority with direct White House visibility, rather than a fragmented, program-specific DOJ function, despite documents submitted to Congress situating the new Assistant Attorney General (AAG) under the Deputy Attorney General (DAG).

BACKGROUND

In response to alleged fraud involving Minnesota social programs, the White House announced a new DOJ division dedicated to national fraud enforcement. A White House fact sheet describes the division’s mission as combating “the rampant and pervasive problem of fraud in the United States,” with authority to enforce federal civil and criminal fraud laws affecting government programs, federally funded benefits, businesses, nonprofits, and private citizens nationwide. The fact sheet suggests a consolidation of civil and criminal fraud enforcement within a single division.

Vice President Vance underscored the initiative’s nationwide scope, noting that a new AAG will lead coordinated, multi-state efforts to stop individuals from “defrauding the American people.” He also linked the division’s work to broader public safety concerns, extending beyond the contours of the DOJ’s published fact sheet.

DIVISION STRUCTURE, RESPONSIBILITIES, AND FOCUS

The division will be led by a Senate-confirmed AAG responsible for both civil and criminal fraud enforcement nationwide. The AAG will oversee multi-district and multi-agency investigations, provide advice, assistance, and direction to U.S. Attorneys’ Offices on fraud matters, and coordinate with federal agencies and DOJ components to disrupt organized and sophisticated fraud schemes. The division will also help set national enforcement priorities, advise DOJ leadership on major fraud matters, and recommend legislative or regulatory reforms to address systemic vulnerabilities.

Although the initial focus is Minnesota-based welfare fraud, DOJ officials have confirmed that enforcement will expand nationwide. DOJ estimates potential fraud losses exceeding $9 billion and has reportedly frozen or paused approximately $10 billion in childcare and social services funding across multiple states. Enforcement activity already underway includes search warrants, thousands of subpoenas, forensic accounting and data analytics deployments, and coordination with agencies such as the FBI, DHS, HHS, HUD, SBA, DOL, and USDA. In several cases, agencies have tightened documentation requirements or paused payments pending audit and review.

While DOJ has historically pursued fraud through existing criminal and civil fraud sections, the creation of this new division represents a significant shift in the Administration’s approach to structuring fraud enforcement.

An official DOJ organizational chart submitted to Congress on January 21, 2026, situates the new AAG under the DAG, reporting through normal DOJ lines rather than directly to the White House, even as Vice President Vance’s public comments emphasize presidential and vice-presidential oversight of national fraud enforcement.

This development reflects the latest stage in an evolving approach to how the DOJ addresses complex fraud enforcement, highlighting the inherent tension between enhanced centralized oversight and the preservation of prosecutorial independence. As the new AAG begins operating within this structure, both the effectiveness of the role and the degree of its independence are likely to face close scrutiny from lawmakers, the legal community, and regulated entities alike.

IMPLICATIONS FOR ORGANIZATIONS RECEIVING FEDERAL FUNDS

Organizations that administer or receive federal funds should expect heightened scrutiny, expanded cross-agency coordination, and an increased risk of parallel civil and criminal investigations. The freezing of billions in federal funds highlights the potential operational consequences. Entities should proactively assess compliance programs, internal controls, documentation practices, and fraud-prevention measures, and be prepared to respond to audits, subpoenas, or other federal inquiries.

CONCLUSION

The creation of this new DOJ division marks a significant escalation in the federal government’s approach to fraud enforcement involving taxpayer-funded programs. Vice President Vance’s framing signals that the Administration views this initiative as a central enforcement priority. Sher Tremonte LLP will continue to monitor developments. For questions, please contact us.

Written by Brian Kidd and Taylor Fontan.