DOJ Fraud Division Memo Calls for Early Asset Seizures and Tougher Sentencing

The Justice Department's National Fraud Enforcement Division has told its prosecutors to go after fraud earlier and harder. Directive 26-13, signed October 7, 2026 by Assistant Attorney General Colin M. McDonald and announced on October 8, calls for asset seizures before charges, more charges per case, arrest and detention where appropriate, and stronger sentencing requests. It matters to anyone under investigation for health care fraud, government program fraud, tax fraud or related crimes.

What the directive tells prosecutors to do

Look for extra charges. In every case, prosecutors must assess whether tax laws were broken. If so, and tax charges would help, they should invite IRS Criminal Investigation to join. The directive also points prosecutors to securities fraud charges and to consumer-fraud charges, such as mail fraud, wire fraud, bank fraud, identity theft and aggravated identity theft.

Seize money early. Prosecutors are told to work with the Division's Asset Recovery Section from the start and to prioritize "early seizure of fraud proceeds." The listed tools include:

• Restraining orders or seizure letters to freeze bank and cryptocurrency exchange accounts.
• Warrants and in rem forfeiture cases to seize funds and other assets "before initiating criminal charges." In rem means a case against the property itself.
• Warrants to seize websites, domains, online accounts and other digital property.
• Civil suits under 18 U.S.C. § 1345 to freeze proceeds, or property of equal value, in banking and health care cases, and to stop ongoing fraud.
• Prejudgment remedies under 28 U.S.C. §§ 3101–3105, such as attachment, garnishment and receivers.

Use cooperators. Prosecutors should develop "proactive cooperators" and use undercover operations. Every cooperator must accept responsibility, including forfeiture and restitution. Prosecutors will tell the court about substantial assistance when appropriate, which connects to USSG §5K1.1.

Seek arrest and detention. Prosecutors should assess flight risk and danger early, seek an arrest warrant and detention "in all appropriate circumstances," and move quickly to revoke release when conditions are broken.

Push at sentencing. The directive says prosecutors "must not be mechanical." Every sentencing presentation must argue general deterrence, meaning the need to discourage others. Prosecutors should seek every Guidelines enhancement the facts and law support, oppose unwarranted reductions, seek approval for an upward variance when they think the range is too low, ask for full restitution, forfeiture and fines, and consider appealing sentences they view as unreasonable.

From my perspective

This is an internal policy memo, not a new law. The directive says so itself: it does not create any right "enforceable at law" by anyone. Judges still decide whether a person is detained before trial under 18 U.S.C. § 3142, and they still set the sentence under the factors in 18 U.S.C. § 3553(a).

What the memo does is tell you what prosecutors in this Division have been directed to do. A few points follow from its text:

• Money can be frozen before any charge. The directive lists seizures and restraining orders that come before an indictment. A person who learns of an investigation should not assume their accounts will stay open until charges are filed.
• There are limits on freezes. In Luis v. United States, 578 U.S. 5 (2016), a case under § 1345, the Supreme Court held that freezing untainted assets, meaning money not tied to the crime, that are needed to hire a lawyer of choice violates the Sixth Amendment.
• A fraud case may grow into a tax case. The directive tells prosecutors to consider tax charges in every case.
• Sentencing will be contested. If prosecutors follow the directive, the defense should expect arguments for enhancements, upward variances and deterrence, and should prepare its own record under § 3553(a) early.

For background on how these cases are charged, see my pages on federal fraud and federal white collar crime. Book a consultation and tell us what happened.