DOJ expands fraud office’s reach amid Vance pressure to investigate Walz
The Justice Department is expanding the authority of its Fraud Enforcement Division to prosecute any federal offenses discovered during investigations that originate with suspected fraud. This formalized rule, scheduled for publication, grants the division jurisdiction over criminal fraud, tax crimes, customs, healthcare fraud, and matters involving federal funds. Notably, the division may also pursue unrelated criminal charges uncovered during investigations. This move follows calls from Vice President JD Vance for the department to examine alleged fraud in Minnesota’s social services programs, leading to scrutiny of Governor Tim Walz and attorney General Keith Ellison. Both officials have denied wrongdoing, with Ellison calling the inquiry politically motivated. The new regulation provides the division with added adaptability, including authority to initiate grand jury proceedings if warranted, and takes effect on August 24. The rule does not accuse any officials of misconduct but allows for potential investigations into federally funded activities if evidence arises.
The Justice Department is expanding the reach of its new fraud division, allowing the office to prosecute any federal offenses uncovered during investigations that begin with suspected fraud, according to a final rule scheduled for publication Tuesday.
The 10-page final rule formalizes powers held by Assistant Attorney General Colin McDonald, the leader of the National Fraud Enforcement Division under the Trump administration. It gives his office jurisdiction over criminal fraud, tax crimes, customs and tariff matters, healthcare fraud, and proceedings involving money owed to or paid by the federal government.
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Notably, the rule states that the division may also prosecute any criminal offenses identified during those investigations, regardless of whether the resulting charges fall within its principal areas of responsibility, according to the department’s paper.
The expansion comes after Vice President JD Vance, who chairs the White House’s anti-fraud task force, pressed the Justice Department in June to investigate Gov. Tim Walz (D-MN) and Minnesota Attorney General Keith Ellison over their handling of alleged fraud in federally funded social services programs.
Vance’s referral followed a Republican-led House Oversight and Government Reform Committee report alleging Walz and Ellison knew about widespread fraud and failed to stop it.
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Walz ended his campaign for a third term in January after succumbing to scrutiny about systemic fraud uncovered in his state’s social services program. The two Democrats have defended their records, and Ellison has called the referral politically motivated.
The rule further states that the authority provides the division with “necessary flexibility” to oversee additional cases assigned by Attorney General Todd Blanche, the deputy attorney general, or another assistant attorney general.
McDonald, who was nominated by Trump to lead the division in January, also gains authority to certify that criminal activity warrants summoning a special grand jury in any federal judicial district.
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The rule, reported by Bloomberg, was uploaded to the Federal Register on Monday and is expected to go live on Tuesday. It takes effect Aug. 24.
The regulation neither directs an investigation of the Minnesota officials nor alleges wrongdoing. However, an inquiry involving federally supported benefits could begin within McDonald’s jurisdiction and expand if prosecutors uncovered evidence of other potential crimes.
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