Trump's Fraud Division takes the gloves off in fight against foreign nationals, others

The Justice Department’s National Fraud Enforcement Division has now released its first comprehensive enforcement strategy.

Assistant Attorney General Colin McDonald circulated the memo on Thursday to all Fraud Division personnel, highlighting five focus areas: public trust, health care fraud, internal revenue scams, global trade subversion, and corporate misconduct.

‘For too long, lax oversight allowed bad actors — often foreign nationals — to exploit these programs for personal enrichment at the expense of hard-working Americans and their financial security.’

President Donald Trump announced the division in January and formally launched it in April after Somali fraud scams began to dominate headlines and highlight the staggering costs of fraud. The Government Accountability Office puts annual losses from fraud somewhere between $233 billion and $521 billion.

McDonald called the numbers “shocking” and said the damage hits “the hearts and souls of Americans” just as hard as their wallets.

“Fraudsters perpetrating these schemes are not just isolated actors; they form criminal conspiracies, often spanning international borders,” McDonald said in the memo.

“For too long, lax oversight allowed bad actors — often foreign nationals — to exploit these programs for personal enrichment at the expense of hard-working Americans and their financial security.”

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Graeme Sloan/Bloomberg/Getty Images

Health care is a particularly ripe sector for fraudsters. Lavish public benefits at federal and state levels incentivize those willing to take advantage.

“By supercharging the historically successful Health Care Fraud Strike Force model with greater resources, data analytics support, and best-in-class technology, the Fraud Division will prosecute the most significant cases involving health care in the United States,” McDonald said.

The Health Care Fraud Strike Force has prosecuted over 6,200 defendants over $45 billion in total fraud since it was launched in 2007. The Fraud Division in April spun off a West Coast-specific force designed to root out fraud across Arizona, Nevada, and Northern California.

The Fraud Division will also be going after tax cheats and those who conspire to rip off unsuspecting American taxpayers.

“For example, unethical return preparers include false claims on individuals’ tax returns and often charge higher fees to do so. … Abusive promoters line their pockets while selling their unsuspecting clients on illegal tax schemes,” McDonald said. “In each instance, these wrongdoers lie to the IRS, cheat the federal government out of lawful revenue, and steal money that would otherwise fund national priorities.”

Foreign adversaries seeking to subvert American trade laws have also been put on notice. The Fraud Division is expanding its investigations into international commercial wrongdoing.

“This includes prioritizing the investigation and prosecution of, among others, illicit transshipment schemes, country-of-origin fraud, the undervaluation of imported goods designed to evade duties, sanctions evasion, and foreign forced labor schemes,” according to McDonald.

McDonald also reiterated the DOJ’s long-standing commitment to holding Big Business accountable. “Prosecutors will prioritize anti-fraud corporate enforcement and work closely with our Corporate Enforcement Section,” the assistant attorney general said.

Some note that while the effort is a good start, it may not go far enough to fix the U.S.’ financial woes.

“I'm happy to see the Fraud Division being built out in such a serious manner. One way to help the goal would be for Congress to stop sending so much out the door without strings attached,” Oversight Project President Mike Howell told Blaze News. “Alaska and Senator [Lisa] Murkowski's insatiable appetite for slush is a good place to look, particularly in the context of her potentially trying to leverage votes in exchange for slush.”

Sen. Murkowski (R-Alaska) has been criticized for seemingly wielding her swing vote to extract public dollars, most recently amid Attorney General Todd Blanche’s confirmation battle, Politico reported.

The State Financial Officers Foundation praised the effort.

"SFOF proudly supports the new memorandum from Assistant Attorney General McDonald and his commitment to 'protecting fraud in the US no matter the size or complexity.' This is what the American people rightly demand from their elected leaders—transparency, oversight, and accountability," SFOF CEO O.J. Oleka told Blaze News. "Through specifically identifying the most common places where fraud occurs, the Task Force has a locked-and-loaded road map of where to hit fraud the hardest."

"Our 42 state financial officers from across the nation thank AAG McDonald and the Trump administration for their vigilance and dependability as allies as they wage the War on Fraud together," Oleka said.

Though the fight against fraud is in its infancy, McDonald closed his memo on an optimistic note.

“With the Division’s expansive mission and national presence, we are aggressively and meticulously repairing the damage inflicted on our social fabric by criminal fraudsters.”

The DOJ did not immediately respond to a request for comment.

Editor's note: Mike Howell is a contributor to Blaze News. This article has been edited after publication to include comment from the State Financial Officers Foundation.

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