Legal Insights
Overview
The United States Department of Justice (DOJ) has fundamentally reshaped its approach to corporate criminal enforcement over the past eighteen months during the Trump Administration. A series of policy announcements—culminating in the first-ever Department-wide Corporate Enforcement and Voluntary Self-Disclosure Policy (March 10, 2026) and the Fraud Division’s Directive 26-12 (October 1, 2026)—signal a clear message: companies that self-report misconduct, cooperate fully, and remediate promptly will receive meaningful, predictable benefits. Those that do not can expect aggressive, multi-tool enforcement across an expanded set of priority areas.
This DE Insight summarizes the key developments and offers practical guidance for boards of directors, general counsel, and compliance officers.
Voluntary self-disclosure is now the cornerstone of a uniform, Department-wide enforcement framework, and for qualifying companies it offers a clear path to declination of prosecution. At the same time, DOJ’s enforcement priorities have broadened significantly. They now span health care fraud, trade and tariff violations, sanctions offenses, financial institution crimes, corporate procurement fraud, and more, so companies in nearly every regulated sector have reason to pay attention.
That broader reach comes as the Corporate Whistleblower Awards Pilot Program continues to expand. Employees have growing financial incentives to report misconduct, which makes strong internal reporting mechanisms more important than ever. Meanwhile, developments under the False Claims Act reflect heightened scrutiny of civil rights fraud and reinforce that statutory standards take precedence over sub-regulatory guidance.
Background: The 2025 Policy Shift
Beginning in early 2025, DOJ leadership embarked on an ambitious restructuring of its corporate enforcement apparatus. On May 12, 2025, the head of the Criminal Division, Matthew R. Galeotti, issued a memorandum titled “Focus, Fairness, and Efficiency in the Fight Against White-Collar Crime,” which revised the Criminal Division’s Corporate Enforcement Policy (CEP). The memo emphasized incentivizing self-reporting and reducing unnecessary burdens on cooperating companies.
As Mr. Galeotti stated: “This is the time for companies to self-report. It is the time to do the work, come in early, cooperate, and remediate. The Criminal Division’s policies give clear benefits to those who do.”
The revised CEP established a three-part framework that would later serve as a template for the Department-wide policy adopted in March 2026.
Fraud Division Directive 26-12: “Corporate Enforcement in the Fight Against Fraud”
On October 1, 2026, the Fraud Division issued Directive 26-12, signaling an aggressive, all-tools approach to corporate fraud enforcement. The Directive reiterates core corporate enforcement principles while making clear that DOJ will bring the full weight of its investigative and prosecutorial resources to bear on fraud affecting government programs, health care, tax revenue, and international trade.
Current Enforcement Priorities
DOJ has identified a broad and evolving set of priority enforcement areas:
- Health care fraud
- Trade, tariff, and customs fraud
- Corporate sanctions offenses
- International cartels and transnational criminal organizations, including related money laundering and narcotics offenses
- Federal immigration law violations by corporations
- Material support of terrorism
- Corporate procurement fraud
- Financial institution crimes
- Foreign and domestic corruption
- Fraud against U.S. government programs and federal funds
This expansive list reflects DOJ’s intent to pursue corporate misconduct across virtually every regulated sector.
Corporate Whistleblower Awards Pilot Program
The Corporate Whistleblower Awards Pilot Program, which took effect August 1, 2024, is a three-year initiative administered by the Money Laundering and Asset Recovery Section (MLARS). The program provides financial incentives for individuals who report original information leading to successful DOJ enforcement actions. A qualifying whistleblower may receive up to 30% of the first $100 million in net forfeited proceeds, and up to 5% of any amounts between $100 million and $500 million.
In 2026, DOJ revised the program to address coordination with other whistleblower frameworks. Notably, while a whistleblower will not receive duplicative awards for the same underlying misconduct reported under another program (such as a qui tam action), eligibility for another program no longer automatically disqualifies a whistleblower from participating in the DOJ pilot.
Additionally, the Treasury Department and FinCEN have proposed a 2026 whistleblower rule in the anti-money laundering and sanctions context that expressly references the DOJ CEP, suggesting whistleblower exposure is growing across agencies. Companies should take note and continue to develop robust internal reporting channels and anti-retaliation protections are no longer optional. These are essential to managing risk and future enforcement.
Monitor Selection Reforms
The Department of Justice has taken steps to increase transparency and consistency in the selection of corporate compliance monitors, and all DOJ components now maintain public monitor-selection policies. Each component uses either a standing or ad hoc monitor-selection committee, and every committee must include an ethics or professional responsibility official. Written memoranda must confirm that proposed monitors have no conflicts of interest. The relevant U.S. Attorney or Component Head is notified of the decision whether to require a monitor, and resolution agreements must explain the reasoning for or against imposing one.
These reforms are significant. The decision of whether a monitor is imposed, and who serves as monitor, can have substantial financial and operational implications for a company. The increased procedural rigor should help ensure that monitor requirements are both necessary and appropriately tailored.
False Claims Act Developments
Civil Rights Fraud Initiative (May 19, 2025). DOJ launched the Civil Rights Fraud Initiative, which applies the False Claims Act’s (FCA) powerful enforcement tools to combat civil rights-related fraud. This initiative reflects DOJ’s willingness to use the FCA creatively and underscores the expanding reach of fraud enforcement into areas that may not traditionally have been associated with the statute.
Justice Manual Revisions (September 18, 2026). DOJ revised the Justice Manual to strengthen FCA enforcement. Among other changes, the revisions reinstate and build upon a 2017 policy providing that sub-regulatory guidance—such as agency memoranda, informal guidance, or policy statements—cannot impose legal obligations beyond those established by the relevant statute or regulation. This principle is significant for companies operating in heavily regulated industries, as it limits the ability of government actors to use informal guidance as a basis for fraud liability.
Practical Recommendations for Boards, General Counsel, and Compliance Officers
In light of these developments, we recommend that organizations take the following steps:
- Reassess self-disclosure decision frameworks. The department-wide policy offers meaningful, concrete benefits for voluntary self-disclosure. Organizations should review and, where appropriate, update internal protocols for evaluating whether and when to self-report potential misconduct, with an emphasis on speed.
- Strengthen internal reporting and anti-retaliation programs. With the Whistleblower Awards Pilot Program and the expanding cross-agency whistleblower landscape, companies must ensure that employees have effective, accessible channels to report concerns internally before they reach regulators.
- Conduct targeted compliance reviews. Given DOJ’s enforcement priorities, organizations should evaluate the adequacy of compliance controls in key risk areas, including tariff, customs, and trade compliance (classification, valuation, country of origin, and transshipment risks); health care and government-program billing; and sanctions and export controls.
- Preserve cooperation readiness. Ensure that document-collection procedures, data-preservation protocols, and policies for identifying individual accountability are in place before a crisis arises.
- Review remediation and compensation clawback policies. DOJ’s emphasis on remediation includes the expectation that companies will take appropriate disciplinary and financial measures against responsible individuals.
- Enhance board oversight. Boards should receive regular briefings on compliance risks, enforcement trends, and the company’s self-disclosure posture.
- Integrate compliance into M&A diligence. Acquisitions of companies with inadequate compliance programs can result in successor liability. Pre-closing diligence should include a rigorous assessment of the target’s compliance infrastructure.
——————————————————————–
This DarrowEverett Insight should not be construed as legal advice or a legal opinion. This Insight is not intended to create, and receipt of it does not constitute, a lawyer-client relationship. The contents are intended for general informational purposes only, and you are urged to consult your attorney concerning any particular situation and any specific legal question you may have. Please reach out to us if you need help addressing any of the issues discussed in this Insight, or any other issues or concerns you may have relating to your business. We are ready to help guide you through these challenging times.
This Insight does not constitute written tax advice as described in 31 C.F.R. §10, et seq. and is not intended or written by us to be used and/or relied on as written tax advice for any purpose including, without limitation, the marketing of any transaction addressed herein. Any U.S. federal tax advice rendered by DarrowEverett LLP shall be conspicuously labeled as such, shall include a discussion of all relevant facts and circumstances, as well as of any representations, statements, findings, or agreements (including projections, financial forecasts, or appraisals) upon which we rely, applicable to transactions discussed therein in compliance with 31 C.F.R. §10.37, shall relate the applicable law and authorities to the facts, and shall set forth any applicable limits on the use of such advice.