DOJ Plans Fraud Division Lacking Direct White House Supervision

The Justice Department is carrying out the Trump administration’s fraud division initiative with existing personnel who’d be supervised by the deputy attorney general—a departure from the White House’s assertion that it would run the operation.

DOJ’s proposed reorganization chart, which was laid out in a Jan. 16 letter to Congress obtained by Bloomberg Law, appears to contradict Vance’s remarks Jan. 8 that the new assistant attorney general for nationwide fraud would report directly to himself and President Donald Trump. The letter makes no reference to White House involvement, which prompted concerns of politicization in the aftermath of Minnesota public benefits fraud the administration has seized on.

Instead, the revised structural hierarchy would have the assistant attorney general for fraud report up to Deputy Attorney General Todd Blanche. Currently, DOJ’s Criminal Division chief also reports directly to Blanche with an overlapping enforcement mandate, causing former officials to criticize the project as duplicative.

Representatives for the department and the White House didn’t immediately respond to requests for comment on whether the administration has abandoned plans for Vance and Trump to oversee the division.

The notification to DOJ’s lead House appropriator, Rep. Hal Rogers (R-Ky.), describes a plan to nominate a new fraud head by reassigning an assistant attorney general position previously occupied by the Tax Division, which the department recently eliminated.

The nationwide fraud division won’t require new funding and will be staffed with employees from other parts of the department, Jolene Ann Lauria, the assistant attorney general for administration, wrote in the letter.

That leaves unclear where those fraud enforcers will come from, as the Criminal Division recently informed fraud specialists that their office will “remain entirely intact.” The new fraud office will be separate from fraud sections within the Criminal and Civil divisions, the criminal chief told employees, Bloomberg Law previously reported.

Lauria went on to articulate a vision for the division that matches functions already being performed by the criminal and civil fraud sections.

For instance, she wrote that the fraud enforcement division “will oversee multi-district and multi-agency fraud investigations; provide advice, assistance, and direction to the United States Attorneys’ Offices on fraud-related issues; and work closely with Federal agencies and Department components to identify, disrupt, and dismantle organized and sophisticated fraud schemes across jurisdictions.”

“The Division will also help develop and set national enforcement priorities and propose legislative and regulatory reforms as necessary to close systematic vulnerabilities and prevent future abuses,” Lauria added.

Bloomberg News reported that the Trump administration was considering tasking Federal Trade Commission Chairman Andrew Ferguson to take on a second role at the White House overseeing the DOJ fraud unit.