White Collar Criminal Defense Group

DOJ Builds a Fraud Strike Force: What the New National Fraud Enforcement Division Means for White Collar Practice

In one of his first acts as Acting Attorney General, Todd Blanche issued a memorandum establishing the National Fraud Enforcement Division (“NFED”). The memo outlines what appears to be a structural reset of how the Department of Justice (“DOJ”) intends to investigate and prosecute fraud, involving taxpayer dollars, with an eye toward becoming more centralized, more coordinated, and more aggressive.

A Centralized Approach to a Decentralized Problem

The memo acknowledges that when it comes to fraud enforcement, the DOJ has operated across a patchwork of sections, units, and districts. While effective, the DOJ’s efforts have not always been coordinated. Mr. Blanche’s solution is to create a single division tasked with investigating and prosecuting fraud against taxpayer-funded programs nationwide.

As outlined in the memo, the NFED is designed to function as a hub, coordinating fraud investigations with federal, state, and local law enforcement, agency inspectors general, and program administrators.

Consolidation of Power

The memo immediately places key DOJ components under the operational control of the NFED, including the Tax Section, the Health Care Fraud Unit, and the Market, Government, and Consumer Fraud Unit. Bringing these units under one umbrella suggests a shift toward centralized charging decisions, unified enforcement priorities, and less variation across districts.

Within 30 days, DOJ’s Office of Legal Policy must recommend which similar criminal units should be realigned into NFED, with a presumption that any unit with a similar mission will be folded into NFED.

A Nationwide Footprint

This is not limited to Main Justice.

Within 21 days, every U.S. Attorney’s Office is instructed to designate a prosecutor to work with the NFED and implement its priorities locally. At the same time, districts are instructed to ensure that fraud cases are adequately staffed and aggressively pursued, a sign that fraud cases, particularly those involving government funds, will receive increased attention.

Civil and Criminal—Integration

The memo also emphasizes coordination between criminal prosecutors and the Civil Division. For practitioners, this is a familiar dynamic, particularly in False Claims Act matters. But the directive here suggests a more deliberate and institutionalized approach.

New Infrastructure and Resourcing

NFED will coordinate a National Fraud Detection Center to identify fraud across taxpayer-funded programs and generate leads. The FBI is directed to increase agents, analysts, and forensic accountants for these cases.

Rapid Timetable

This does not appear to be a long-term initiative. The memo sets aggressive deadlines for restructuring, reporting, and expansion, measured in days and weeks, not years.

Practical Takeaways

With the creation of the NFED, the DOJ is building a centralized, data-driven, nationwide fraud enforcement apparatus. Expect more coordination and less variability across districts. The days of markedly different enforcement approaches from one U.S. Attorney’s Office to another may be numbered.

Additionally, based on the allocation and consolidation of resources, fraud enforcement, particularly fraud against the government, is clearly a priority for this Administration. Practitioners should be prioritizing risk assessments for entities touching Medicare/Medicaid, grants, tax credits, procurement, and relief programs.

Managing Your Client On the Witness Stand: SCOTUS Draws a Line on Mid-Testimony Coaching

The Supreme Court’s recent decision in Villarreal v. Texas takes up a familiar but often uncomfortable moment for trial lawyers: your client is on the stand, the day ends, and you have hours, sometimes overnight, to talk to your client. The trial question is simple enough. What, exactly, can you talk about?

FACTS

David Villarreal was on trial for murder in Texas. He took the stand in his own defense and claimed he acted in self-defense. Midway through his testimony, the court recessed for the evening. Before breaking, the trial judge gave defense counsel a pointed instruction: you may speak with your client, but you may not “manage” his ongoing testimony.

Defense counsel objected, arguing that any limitation on attorney-client communication during an overnight recess runs afoul of the Sixth Amendment. The objection was preserved, but not sustained. Villarreal resumed his testimony the next day, was ultimately convicted, and the issue made its way to the Supreme Court.

THE FRAMEWORK: GEDERS VS. PERRY

The case forced the Court to confront a tension it had previously addressed, but never quite resolved. On one hand, in Geders v. United States, the Court held that a judge cannot bar all communication between a defendant and counsel during an overnight recess. On the other hand, in Perry v. Leeke, the Court held that a judge could bar all communication during a short daytime break in testimony. Villarreal presented a third scenario: an overnight recess, but with a partial restriction on the scope of communication.

THE COURT’S ANSWER: IT’S ABOUT CONTENT, NOT TIME

Writing for the majority, Justice Jackson rejected the notion that the answer turns simply on the length of the recess. Instead, the Court drew a line based on the content of the attorney/client communication. A defendant retains the right to consult with counsel about strategy, witnesses, plea considerations, and the broader conduct of the case. But once the defendant takes the stand, he also assumes the role, and burdens, of a witness under oath. Among those burdens is the expectation that his testimony will not be shaped in real time by his lawyer.

That distinction proved decisive. The Court held that the Sixth Amendment does not protect discussions aimed at influencing or refining a defendant’s ongoing testimony while it is still in progress. In the Court’s view, prohibiting that narrow category of discussion preserves the truth-seeking function of trial without meaningfully impairing the defendant’s right to counsel.

Importantly, the order at issue did not bar communication altogether. Villarreal remained free to speak with his lawyers about strategy, potential sentencing exposure, plea considerations, and any number of other topics. What was off limits was one thing: using the overnight break to adjust or “manage” what he had already said, or what he would say next.

IN PRACTICE

Villarreal provides helpful clarity, even if it requires a degree of discipline in practice. The line between “strategy” and “testimony” will not always be perfectly clean. But the Court’s message is clear enough: once your client is on the stand, some of the tools of trial preparation have to be put down, at least until the testimony is over.