DOJ Launches the National Fraud Detection Center

The Department of Justice (DOJ) has announced the launch of the National Fraud Detection Center (NFDC), a new prosecutor-led, multi-agency unit tasked with investigating those who defraud federal government programs. This initiative was previewed by an August 13, 2026 memorandum outlining the National Fraud Enforcement Division’s Enforcement Priorities (the McDonald Memo) (see our August 18 Legal Update), and is being led by Acting Assistant Director Amanda Riedel of the Executive Office for U.S. Attorneys (EOUSA) and Acting Chief Cody Matthew Herche of the Global Trade & Commerce Enforcement Section, formerly head of DOJ’s Trade Fraud Task Force (TFTF). The NFDC operates as part of President Trump's Task Force to Eliminate Fraud, the whole-of-government initiative established by Executive Order 14395 and chaired by the Vice President, as outlined in our March 18 Legal Update.

The NFDC’s Purpose

The NFDC is designed to increase cross-program visibility. Individual agencies have historically tracked fraud within their own programs but sometimes had difficulty detecting schemes spanning multiple federal programs simultaneously. The NFDC seeks to address this shortcoming by embedding analysts from across the Inspector General community and leveraging shared technology to generate criminal leads that drive prosecutions.

The Center’s inaugural partners include the FBI, Homeland Security Investigations, IRS Criminal Investigation, FinCEN, the Treasury Department, the Pandemic Response Accountability Committee, and Inspectors General from the Departments of Agriculture, Education, Health and Human Services, Homeland Security, Housing and Urban Development, Interior, Labor, and Veterans Affairs, as well as the Defense Criminal Investigative Service, the Treasury Inspector General for Tax Administration, the Small Business Administration, and the Social Security Administration. State partners from Alabama, Florida, Georgia, Louisiana, Mississippi, Ohio, and South Carolina are also participating, providing access to investigators who can identify whether a federal suspect is appearing in state cases under a different company name or identity.

The NFDC’s Leadership Signals Seriousness of Purpose

The choice of NFDC’s leadership suggests that  the unit’s creation is not merely an administrative reshuffling. Riedel is an experienced federal prosecutor with a track record of standing up large-scale, cross-agency fraud initiatives. She previously served as Director of COVID-19 Fraud Enforcement during the Biden-Harris Administration and as White Collar Coordinator for the EOUSA. Herche brings recent experience helping to develop DOJ’s trade fraud enforcement effort, serving as the head of the interagency TFTF, which recently published a new benchmark Enforcement Resource Guide and announced $1 billion in civil and criminal recoveries, penalties, forfeitures, and publicly charged losses (see our July 21 Legal Update). Together, their appointments signal that the NFDC will combine traditional white collar prosecution expertise with the data-driven, multi-agency coordination model that has characterized recent efforts related to trade and pandemic fraud enforcement.

Why Federal Contractors, Grant Recipients, Financial Institutions, and Others Should Take Notice

The NFDC’s creation should be considered alongside the August 18 final rule that formally established the National Fraud Enforcement Division and conferred upon it jurisdiction over criminal fraud, criminal tax, trade and customs fraud, fraud involving monies owed to or paid by the United States, health plan fraud, and controlled substances offenses—all of which previously sat in separate DOJ components. For most of these categories the Fraud Division now shares authority with the Criminal Division; only criminal tax and health plan fraud are assigned to it exclusively. The Division’s stated mandate to use “advanced, data-driven investigative techniques,” paired with the NFDC’s multi-agency data sharing, means that DOJ is now connecting data across tax, trade, healthcare, and federal benefits programs in ways that many companies—including financial institutions—do not yet do internally.

For federal contractors and grant recipients, the implications are significant. The NFDC’s mandate specifically encompasses fraud involving monies owed to or paid by the United States—capturing procurement fraud, grant fraud, and benefits program fraud. The McDonald Memo explicitly identifies government procurement fraud (including bid rigging, defective pricing, self-dealing, bribery, and product substitution) and benefit and grant program fraud (including student loans, veterans’ benefits, disaster relief, and small business programs) as critical priorities. With a dedicated analytics operation now funneling fraud leads to a consolidated prosecution group, backed by FBI investigative resources and Inspectors General partnerships across virtually every major grant-making agency, contractors and grant recipients face a materially different enforcement landscape than previously existed. The NFDC’s state-level partnerships add another dimension, allowing DOJ to extend its reach through state investigators.

For banks and other financial institutions, these developments are particularly significant. Many institutions maintain separate compliance teams for BSA/AML, sanctions, tax reporting, trade finance, and healthcare lending or payments. These teams sometimes operate in silos with limited data integration. DOJ, through the NFDC, is seeking to build the capacity to detect patterns across these categories—identifying, for example, whether an entity flagged for suspicious trade activity is also drawing federal benefits or submitting questionable tax filings. Companies that are unable to replicate that cross-referencing internally may find themselves on the back foot when the NFDC generates an investigative lead that spans multiple regulatory domains.

Healthcare organizations, importers, and companies participating in federally funded relief or reimbursement programs should likewise take note. The NFDC’s approach means that conduct previously policed by a single agency—a billing irregularity flagged by the HHS-OIG, a customs discrepancy identified by U.S. Immigration and Customs Enforcement Homeland Security Investigations, or a tax anomaly detected by IRS-CI—can now be cross-referenced against other federal datasets, potentially revealing broader patterns of noncompliance that a single agency would have been unlikely to have identified on its own.

Next Steps and Client Considerations

• Cross-functional compliance integration: Organizations should assess whether their compliance infrastructure allows them to connect data across business lines in the same way that DOJ now proposes to do across agencies, particularly tax, trade, government contracts, and health care.
• Proactive data monitoring: The NFDC’s emphasis on analytics-driven lead generation means that DOJ may identify potential misconduct before a whistleblower report, voluntary self-disclosure, or traditional referral. Companies should consider whether their own monitoring capabilities allow them to identify and address issues before the government does.
• Voluntary self-disclosure: The National Fraud Enforcement Division operates under the Department-wide Corporate Enforcement and Voluntary Self-Disclosure Policy announced in March 2026 (see our March 12 Legal Update). The NFDC’s enhanced detection capabilities make the calculus around self-disclosure more significant, as the window between misconduct and government detection may be narrowing.
• Broader investigative scope: Under the August 18 final rule, the Fraud Division can prosecute any federal crime it discovers during an investigation in one of its enumerated areas. A lead generated by the NFDC in one program could expand into a multi-offense prosecution without the need for referral to another DOJ component.