When the Justice Department’s new fraud chief gathered top prosecutors from across the South last month to announce “record fraud enforcement actions,” each official trumpeted a recent case that showed how the new effort was unfolding.
But there was a hitch: One of the cases wasn’t new. The U.S. attorney for northern Mississippi highlighted a former federal employee convicted of plundering a pandemic-era loan program for distressed small businesses. The defendant was caught in 2022 and had already served his
When the Justice Department’s new fraud chief gathered top prosecutors from across the South last month to announce “record fraud enforcement actions,” each official trumpeted a recent case that showed how the new effort was unfolding.
But there was a hitch: One of the cases wasn’t new. The U.S. attorney for northern Mississippi highlighted a former federal employee convicted of plundering a pandemic-era loan program for distressed small businesses. The defendant was caught in 2022 and had already served his prison sentence.
The Justice Department’s new National Fraud Enforcement Division, an initiative established by President Trump and touted by Vice President JD Vance, aims to address the $500 billion in federal funds lost to fraud every year. The division is under pressure to show quick results, but it has struggled to recruit prosecutors and has been slowed by an internal turf war that has caused some promising investigations to languish. Meanwhile, some of the victories the division has claimed predate its work.
Colin McDonald, a 38-year-old who earlier worked as a prosecutor in San Diego, was put in charge of the new division in April. To kick-start things, more than 70 prosecutors who specialize in Medicare fraud and the illegal dissemination of opioids were transferred to his command. The move sparked a monthslong feud with an older fraud unit where the lawyers used to work.
The rift hurt some longstanding investigations because leaders of the old unit worried they wouldn’t receive recognition for enforcement actions in which they did all the work, according to people familiar with the matter. After the older unit’s leader reclaimed some prosecutors, he told some of his lawyers that he had “won” the fight, the people said.
In a bit of internal rebranding, the old unit, which handled a range of fraud cases, was recently forced to change its name so only McDonald’s group could have the word “fraud” in its title.
White House officials have recently been dissatisfied with the volume of criminal cases McDonald has produced, believing he spent too much time building the new division and that he should be producing more cases and arrests, people familiar with their thinking said.
A White House spokeswoman said McDonald “is delivering with unprecedented speed on the president’s promise to root out fraud and hold fraudsters accountable.” A spokesman for McDonald’s fraud division said it is “expanding fast, securing more resources and here to stay—relentlessly hunting every fraudster who steals from the American people.”
One case relegated to the slow lane involves a unit of the global consulting firm Accenture, some of the people said. Prosecutors have sought support for a criminal settlement that would require Accenture Federal Services to pay tens of millions of dollars in restitution to resolve a probe focused on a former employee who allegedly misled federal officials about its cloud-computing services’ cybersecurity controls.
The former employee pleaded not guilty and is scheduled to face trial next year. But a legal resolution with Accenture hasn’t advanced because it is unclear which fraud group would get credit for the case, the people said.
Accenture didn’t respond to requests for comment.
There is bipartisan agreement that fraud against the government is a problem—and a worthwhile focus for the Justice Department. But some prosecutors internally have been wary of joining the new fraud division out of concern its mandate is partisan. Vance has called for an investigation into Democratic Minnesota Gov. Tim Walz and suggested that he and other Democrats are unwilling to address fraud in social-services programs.
“We’ve spent a ton of resources in Minneapolis combating fraud, and that includes a very intense look at the leadership and the programs and who’s administering them,” Attorney General Todd Blanche said this week.
McDonald wrote in a memo made public Thursday that his division would soon have 500 lawyers and support staff. That includes dedicated fraud lawyers in nearly 100 U.S. attorney’s offices, a senior official said. The division expects to bring cases faster and surge resources at fraud hot spots as it connects prosecutors with better data analytics and other investigative support.
McDonald also is trying to forge tighter bonds with state law enforcers who help identify doctors and other medical providers who bilk Medicaid, the insurance program that covers over 70 million Americans and costs $900 billion annually.
Jeff Jackson, North Carolina’s Democratic attorney general, said he worries the antifraud campaign may take a partisan turn, but thinks federal prosecutors have played it straight so far.
“I have seen rhetoric coming from the White House that I disagree with,” Jackson said. “But as to this specific effort, it has been bipartisan and has brought law enforcement together to fight fraud.”
McDonald is trying to get more attention—and credit—for the Justice Department’s work. U.S. attorneys around the country have been told to highlight the creation of McDonald’s division on news releases announcing new fraud cases, according to a memo sent to prosecutors in May.
In late June, the division announced the results of a surge of healthcare fraud cases: criminal charges or civil claims filed against 455 defendants and over $6.5 billion in alleged fraud losses. It touted the spoils of fraud seized from defendants, including an $865,000 Bulgari necklace and a Ferrari 296 GTS valued at nearly $600,000.
McDonald has taken his fraud campaign on the road in recent weeks, gathering prosecutors from across the South to announce new cases in Columbia, S.C., and later in Philadelphia, where he said prosecutors find fraud “everywhere we look.”
According to a review of court records, many of the early cases the fraud division touted in the spring were charged long before the unit opened—and some were filed before Trump took office in January 2025.
The old Mississippi case that was included in the fraud division’s highlights featured more than 30 defendants accused of participating in a scheme to fraudulently obtain pandemic relief loans. Every defendant had been convicted well before the press conference took place.
A spokeswoman for the U.S. Attorney’s Office in Oxford, Miss., said the case was chosen because one remaining defendant will be sentenced in August. “Even where earlier enforcement actions existed, this administration drove the enforcement actions further,” the spokeswoman said.
Write to Dave Michaels at dave.michaels@wsj.com and Sadie Gurman at sadie.gurman@wsj.com
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