DOJ Restores Financial Crime Team in Latest Fraud Office Shakeup

Justice Department leaders have reached a temporary staffing compromise to return white-collar units to the Criminal Division fraud section, after they’d been transferred to the Trump administration’s new fraud division, said two people familiar with the move.

An organizational memo circulating internally Thursday states that market integrity and consumer fraud teams will go back to their original fraud section home, the individuals added. Their unexpected move in April had triggered weeks of conflict between criminal chief Tysen Duva and the head of the White House-launched National Fraud Enforcement Division, Colin McDonald.

The new alignment will be re-evaluated in six months, at which point the approximately 40 prosecutors—including those focused on insider trading—could once again be absorbed by McDonald, whose division has a mandate of enforcing government program fraud.

The agreement to shift financial and consumer crime specialists back to their traditional office represents a victory, at least for now, for Duva. Fraud section veterans feared Duva would lose the personnel battle to an anti-fraud project that’s been a priority for Vice President JD Vance and President Donald Trump adviser Stephen Miller.

However, the plan also calls for McDonald’s division to take control of the Criminal Division fraud section’s litigation support, administrative, and legal ethics units, with a few exceptions, said the people, who spoke anonymously about a non-public memo.

DOJ spokespeople didn’t immediately respond to a request for comment.

The fraud section’s healthcare unit and a team of 10 procurement fraud attorneys will also remain in the fraud division, as their mission aligns more closely with McDonald’s focus on wrongdoing targeting taxpayer-funded programs.

Before this compromise was reached, there were widespread concerns among former DOJ attorneys that the fraud section’s success bringing securities and commodities fraud cases would be de-emphasized in favor of a partisan agenda to probe Democratic-led jurisdictions. McDonald had previously sought to keep the market and consumer teams for his division at an earlier stage of the negotiations.

The fraud division, the establishment of which Vance originally announced in January, is working in tandem with a White House anti-fraud task force. Acting Attorney General Todd Blanche has said that the division would accept case referrals from the White House.