Justice Department Establishes New Fraud Division, Directs U.S. Attorneys to Assign Prosecutors

U.S. attorneys' offices to assign a local prosecutor to support a Washington-based office, according to a memo obtained by CBS News. Assistant Attorney General Colin McDonald issued the memo on Wednesday, detailing the arrangement for a division created earlier in 2026.

The directive aims to execute a nationwide strategy against fraud in every district. S. ' Beginning July 1, 2026, each detailed prosecutor should not be assigned any new work or cases without prior approval from the fraud division.

The Justice Department invited state and local governments to apply for $300 million in grants on Tuesday. S. attorneys. These special assistants would focus on public benefit fraud schemes involving people living in the country illegally.

U.S. attorney's offices have been contending with a flood of habeas petitions by immigrants swept up in the Trump administration's mass detention policy. The Trump administration has focused on pursuing fraud investigations involving government benefit programs in Minnesota and California.

U.S. attorney's offices, have been stretched thin by widespread departures and difficulties in hiring new attorneys. Acting Attorney General Todd Blanche stated at a news conference earlier in April 2026 that the new fraud division would primarily be staffed by combining various offices within the department that handle mostly criminal fraud involving health care, taxes, benefits and corporations.

Blanche also stated that the new division would be open to accepting criminal referrals from the White House. The unusual staffing arrangement was announced one day after the grants invitation, amid ongoing challenges in department resources.