Acting Attorney General Todd Blanche Issues Memorandum on the Creation of the National Fraud Enforcement Division

Acting Attorney General Todd Blanche Issues Memorandum on the Creation of the National Fraud Enforcement Division

On April 7, Acting Attorney General Todd Blanche issued a memorandum regarding the new National Fraud Enforcement Division within the US Department of Justice (DOJ). The new division’s stated “core mission” is to investigate and prosecute those who steal or fraudulently misuse taxpayer dollars, consolidating existing resources, including the Criminal Division’s Tax Section, Health Care Fraud Unit, and Market, Government, and Consumer Fraud Unit, under a single Assistant Attorney General to eliminate duplication and centralize expertise.

The memorandum directs a series of immediate actions, including requiring each US Attorney’s Office to designate an experienced prosecutor to be detailed to the new division, establishing a National Fraud Detection Center to identify fraud across taxpayer-funded programs, and coordinating with the Federal Bureau of Investigation and agency inspectors general to increase investigative resources. The division will also partner with the Civil Division to leverage both civil and criminal enforcement tools and implement a hiring plan to rapidly expand prosecutorial capacity nationwide. Within 30 days of the date of the memorandum, the Office of Legal Policy must recommend to the Deputy Attorney General which criminal prosecutorial resources should be realigned into the division, with a “reasonable presumption that any criminal unit or section with a mission similar to that of the” division “will be brought within the new division.” The Deputy Attorney General then makes “a final decision” within three business days after receipt of the recommendation. The Office of Legal Policy is also tasked with reviewing relevant laws, regulations, and guidelines within 90 days and recommending strengthening measures. 

The DOJ’s press release can be found here. Our prior coverage of the announcement of the new division can be found here.

SEC Announces Enforcement Results for Fiscal Year 2025

On April 7, the US Securities and Exchange Commission (SEC) announced its enforcement results for fiscal year 2025 (ending September 30, 2025). The SEC filed 456 enforcement actions, including 303 standalone actions, and obtained orders for $17.9 billion in total monetary relief. However, after excluding “deemed satisfied” amounts and the long-running Ponzi scheme judgment involving Robert Allen Stanford, net monetary relief totaled approximately $2.7 billion. Chairman Paul Atkins emphasized that the SEC has shifted away from “regulation by enforcement,” refocusing resources on fraud, market manipulation, insider trading, and abuses of trust rather than pursuing high case volumes and record penalties. Approximately two-thirds of standalone actions charged individual wrongdoers, a 27% year-over-year increase.

The SEC also highlighted key structural changes, including the launch of the Cyber and Emerging Technologies Unit and the Cross-Border Task Force to combat transnational and technology-related fraud. Notable actions targeted Ponzi schemes, insider trading, market manipulation via social media, and crypto-related fraud. The SEC reported that it returned approximately $262 million to harmed investors and awarded roughly $60 million to 48 whistleblowers, while receiving a record 53,753 tips, complaints, and referrals — a 19% increase over the prior year.

Florida Insurance Company to Pay Over $135 Million for ACA Enrollment Fraud Scheme

On April 7, the DOJ announced that AP of South Florida, LLC (APSF), a Florida-based insurance brokerage doing business as Fiorella Insurance Agency, agreed to plead guilty to one count of major fraud against the United States for its role in an Affordable Care Act (ACA) enrollment fraud scheme. According to the DOJ, APSF used “street marketers” to target vulnerable, low-income individuals, including people experiencing homelessness, unemployment, and substance abuse disorders, near homeless shelters, drug treatment clinics, and similar locations. Through falsified income projections, misleading call scripts, and inducements such as cash and gift cards, APSF fraudulently enrolled ineligible consumers in fully subsidized ACA plans, generating at least $141.5 million in unwarranted federal subsidies. APSF will pay $27.6 million in restitution. Its former president, Cory Lloyd, was previously convicted and sentenced to 20 years in prison for his role in the scheme.

In a parallel civil resolution, AssuredPartners, Inc., APSF’s then-parent company, agreed to pay $107 million to settle False Claims Act (FCA) allegations, bringing the total resolution to over $135 million. The civil case, originally brought by a whistleblower under the FCA’s qui tam provisions, alleged that from February 2021 through September 2022, APSF knowingly submitted fraudulent ACA applications and evaded federal verification efforts, with a significant portion of the fraudulently obtained revenues flowing up to AssuredPartners. The whistleblower will receive a $24.3 million share of the recovery. The DOJ announced this case alongside other fraud prosecutions in support of President Trump’s Task Force to Eliminate Fraud.

The case is USA v. AP of South Florida LLC, Case No. 9:26-cr-80063, in the US District Court for the Southern District of Florida. 

The DOJ’s press release can be found here.

California Man Pleads Guilty in $270 Million Medi-Cal Fraud Scheme

On April 7, the DOJ announced that Paul Randall, 66, of Orange, California, pleaded guilty to wire fraud for orchestrating a scheme that submitted nearly $270 million in fraudulent claims to California’s Medicaid program (Medi-Cal) over an 11-month period. Randall and his co-conspirators, pharmacist Kyrollos Mekail and nurse practitioner Patricia Anderson, allegedly exploited Medi-Cal’s temporary suspension of prior authorization requirements to bill tens of millions of dollars per month for expensive, medically unnecessary prescription drugs that were often never provided to patients. The scheme involved paying illegal kickbacks for patient information and pre-signed prescriptions, and billing thousands of dollars for generic medications that typically cost under $25.

According to the DOJ, Medi-Cal paid at least $178.7 million on the fraudulent claims. The government seized approximately $126.5 million in assets, including bank funds, luxury vehicles, real properties, and sports memorabilia. Randall faces up to 30 years in prison and is scheduled to be sentenced on August 3. Both Mekail and Anderson previously pleaded guilty to health care fraud charges and await sentencing. The case was announced alongside other fraud prosecutions in support of President Trump’s Task Force to Eliminate Fraud.

The DOJ’s press release can be found here.