The White House’s New Fraud Section: Key Questions

Earlier this month, Vice President J.D. Vance publicly announced that the Trump administration intends to create a new Assistant Attorney General (AAG) position and a corresponding Department of Justice division focused on investigating and prosecuting fraud nationwide. Although it appears the new division will be organizationally located within the DOJ, the new AAG, according to Vance, will be “run out of the White House” and report directly to himself and President Donald Trump.

Vance stated that the position would require Senate confirmation and that the administration expects to nominate a candidate “within the next few days.”

Later the same day, Jan. 8, the White House released a Fact Sheet titled “President Donald J. Trump Establishes New Department of Justice Division for National Fraud Enforcement,” which notably did not reflect Vance’s statements that this post would be run out of the White House.  And on Jan. 16, 2026, DOJ reportedly sent a letter to the Hill notifying lawmakers of its intent to reorganize and create a new “National Fraud Enforcement Division” overseen by the Deputy Attorney General. Like the White House Fact Sheet, the letter says that this new Division will “enforce the Federal criminal and civil laws against fraud targeting Federal government programs, Federally funded benefits, businesses, nonprofits, and private citizens nationwide.” The 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.”

As of today, no candidate has been named. The announced plan raises several significant legal and policy questions.

1) Can a president create a 12th DOJ AAG position without Congress?

Answer: No. The creation of a 12th Senate-confirmed AAG requires an act of Congress.

Creating a 12th Senate-confirmed AAG position requires congressional action. Under 28 U.S.C. § 506, there may only be 11 Senate-confirmed AAGs. Every increase of this number has required a statutory change without exception.

2) Can a president create a new DOJ Division without Congress?

Answer: It depends, but likely not without express congressional authorization depending on the envisioned scope of authority.

The Supreme Court has held that agencies are “creatures of statute” and “possess only the authority that Congress has provided.” The Court expects Congress to wield “plenary control … over the existence of executive offices,” “speak clearly” when authorizing agency decisions of “vast economic and political significance,” and require an agency to point to “clear congressional authorization” for powers it may claim.

No current statute grants the president authority to create a new DOJ division or corresponding AAG position. The temporary reorganization authorities that Congress granted to the president in periodic fashion from the 1930s to 1980s have long expired. And the last two DOJ divisions created, respectively the National Security Division created in 2006 and the Civil Rights Division created in 1957, were established by explicit congressional authorization.

To be sure, agency heads have traditionally exercised discretion to organize their departments—reorganizing functions, creating offices within existing divisions, and assigning responsibilities among components. Recent Supreme Court decisions have reinforced executive authority over agencies. For example, in Trump v. United States (2024), the Court declared the president holds the “entirety of the executive power” and vast authority over the Justice Department. How far that authority actually extends in different contexts remains unsettled. This administration has tested those boundaries, pursuing structural changes to major agencies—including efforts to dismantle or dramatically restructure the Department of Education, Consumer Financial Protection Bureau, National Institute for Occupational Safety and Health, USAID, and others—and several legal challenges are currently in active litigation.

Here, however, several factors favor requiring congressional authorization. The proposed division would apparently have extensive enforcement authority with potentially major impact across sectors of the economy. The new AAG would oversee multi-district and multi-agency fraud investigations and direct U.S. Attorneys’ Offices on fraud-related issues, functions that affect significant economic sectors including healthcare, government contracting, financial services, and private business. The scale of the new division’s authority is reflected in part by the extraordinary White House announcements and stated policy objectives. Moreover, historical precedent shows that Congress’s role is clear when it involves authorization needed for new divisions.

3) Can a president or attorney general repurpose an existing AAG position for this purpose?

Answer: Likely yes, but with significant restraints. The administration could stay within the statutory cap on AAG positions by repurposing a vacant AAG slot. But the legal basis of any such repurposing depends on several factors: the nature of the original authority that created the AAG position, limits on the Department’s appropriations authority to fund and staff a new division, and, as noted above, whether the scope and scale of the new position requires congressional authorization.

As noted in DOJ’s reported letter to Congress, the administration intends to repurpose the now-vacant Tax AAG position for the new National Fraud Enforcement Division, drawing on existing appropriations and personnel.

After the Tax Division officially dissolved on Nov. 30, 2025—its functions split between the Civil and Criminal Divisions—one of the 11 Senate-confirmed slots authorized by 28 U.S.C. § 506 is now available. Filling an existing AAG slot for fraud enforcement would not technically exceed this statutory cap. However, the statutory framework imposes constraints on which positions can be repurposed, how any new division could operate, and how it could be funded.

The degree of executive flexibility depends on how each position was created. The 11 Senate-confirmed AAGs plus the one career AAG fall into four categories:

1. AAGs Created by Congress

At least five AAG positions were explicitly created by Congress and, as a matter of statute, cannot be eliminated or repurposed without congressional action (despite DOJ’s reported letter suggesting otherwise). These five are: the AAG for National Security (28 U.S.C. § 507A), the AAG for Civil Rights (Civil Rights Act of 1957), the AAG for Justice Programs (Justice Assistance Act of 1984), the AAG for Antitrust (Act of March 3, 1903), and the AAG for Administration. (The latter, created by 28 U.S.C. § 507, is a career position, not Senate-confirmed, and does not count toward the cap on 11 Senate-confirmed AAGs.)

The Office of Legal Counsel was also created directly by Congress in the Independent Offices Appropriation Act of 1933. Section 16 of that Act abolished one Assistant Attorney General position and established a new “Assistant Solicitor General” with presidential appointment, Senate confirmation, and the same grade and compensation as an AAG. The Conference Report stated explicitly: “Abolishing one of the existing positions of Assistant Attorney General and creating a new position of Assistant Solicitor General.” The position was renamed as an AAG through Reorganization Plan No. 2 of 1950, a presidential reorganization plan submitted pursuant to authority delegated by Congress in the Reorganization Act of 1949.

2. AAG Positions Ratified Through Statutory References

The Criminal and Civil Divisions have long been led by AAGs without express statutory creation of their positions since the creation of the Department. The legislative history of the criminal and civil divisions has evolved since the 1800s, and both divisions have no principal piece of legislation or organic act initially establishing and defining its responsibilities. But Congress has repeatedly legislated on the assumption that these divisions and their leadership exist, e.g. 18 U.S.C. § 2516 (authorizing Criminal Division officials to approve wiretap applications) or 18 U.S.C. § App 9A (authorizing only the Criminal Division AAG or NSD AAG to conduct classified briefings to senior officials) and 28 U.S.C. § 501 (referencing the Civil Division’s Consumer Protection Branch), among others. These references do not amount to explicit creation, but they reflect congressional intent that these divisions and their leadership continue performing designated statutory functions.

3. AAG Position Created Under Expired Reorganization Authority

The Tax Division was created in 1934 by Executive Order 6166, issued pursuant to temporary reorganization authority Congress granted President Roosevelt under the Economy Act of 1933. That authority has long expired. With the Division now dissolved, its former AAG slot is available but any new division created to occupy it would lack the express congressional authorization that originally supported the Tax Division’s creation and would need to establish its own through appropriations, statutory references, or both.

4. AAGs Created by Attorney General Order

Three AAG-led components appear to have originated through Attorney General order rather than direct congressional enactment: (1) Environment and Natural Resources Division, created in 1909 as the Public Lands Division by Attorney General George Wickersham; (2) Office of Legal Policy, created by Attorney General William French Smith in 1981; and (3) Office of Legislative Affairs, created by AG Order 504-73 in 1973. Each of these components is headed by an AAG position that, when filled, requires presidential appointment and Senate confirmation, though vacancies may be filled by acting officials.

These positions may offer the most flexibility for reassignment but even here, the AG’s flexibility does not clearly extend to creating major new enforcement structures or bypassing the statutory chain of command established in 28 U.S.C. §§ 509, 510, 515, and 519, as we discuss further below.

Appropriations Constraints

Appropriations constraints further limit executive flexibility. There is no current congressional appropriation that specifically funds a new national fraud enforcement division. Congress has funded DOJ by allocating amounts to specific Divisions and Components in the Department. The executive branch does not have unilateral authority to reallocate significant appropriations beyond limited reprogramming thresholds without statutory authorization and notification to Congress.

DOJ’s letter to Congress acknowledges this constraint, saying that the Division will reportedly be staffed and funded through the reallocation of existing Department personnel and resources, rather than through any new appropriation or authorization. That approach may satisfy notification requirements but does not resolve the underlying question of whether the Department can repurpose funds appropriated for other Divisions and Components without explicit congressional authorization. In fact, the language that allows DOJ to transfer funding anticipates only funding transfers to existing Divisions and Components, not entirely new ones that Congress did not have a chance to evaluate through the appropriations process.

4) Can a DOJ division be “run out of the White House” as Vance described?

Answer: It depends on what that means in practice. Federal statutes vest enforcement authority in the Attorney General, not the White House. But the precise reporting structure of the proposed new Division remains unclear, and recent Supreme Court case law favors the President’s control as a constitutional matter.

Vance stated that the new AAG would “be run out of the White House” and report directly to himself and the president. Notably, however, neither the White House fact sheet nor the reported DOJ letter includes this language. Those documents describe the position in terms facially consistent with DOJ’s existing structure: leading fraud enforcement efforts, overseeing multi-district investigations, and providing direction to U.S. Attorneys’ Offices on fraud-related issues. Both the fact sheet and the letter state that the AAG would “advise the Attorney General and Deputy Attorney General” on significant fraud investigations and prosecutions.

The discrepancy matters because federal statutes establish that DOJ’s enforcement functions run through the Attorney General. Under 28 U.S.C. § 509, all functions of DOJ officers and components “are vested in the Attorney General.” Section 510 permits the AG to delegate those functions, but only to “officer[s], employee[s], or agenc[ies] of the Department of Justice,” not to White House officials, and certainly not to the Vice President. In addition, Section 519 provides that the AG “shall supervise all litigation” to which the United States is a party.

The Appointments Clause reinforces this limit. With the exception of offices created directly by the Constitution, federal officers must be appointed to positions “established by Law.” Under 28 U.S.C. §§ 503, 506, Congress has established the offices of AAGs by statute and has specified both their number and their role to assist the AG, not the president or vice president. Recasting those positions as White House officers would conflict directly with that statutory design.

To be sure, if “run out of the White House” simply means the AAG reports to the AG, who in turn coordinates closely with the President and Vice President on fraud enforcement priorities, that arrangement would be unremarkable. The President supervises the executive branch, and the AG serves at his pleasure. The question is whether the new AAG would bypass the AG to take direction from the White House or whether the AG remains in the statutory chain of command.

That said, if the Supreme Court embraces the view that the president is the “law-enforcement-officer-in-chief” with the AG as a subordinate that the president fully controls, then the statutory framework in sections 509 and 510, which vest authority in the AG, may not survive scrutiny. Put differently, if the AG is completely subservient to the president, there may be no legal barrier to the president directing the AAG through the White House rather than Main Justice. At that point, the objections would be matters of policy and norm, not law.

Separately, the structure announced by Vance would represent a sharp departure from more than four decades of post-Watergate norms designed to insulate criminal prosecutions from White House control. Since 1978, administrations of both parties have adhered to policies strictly limiting White House involvement in specific DOJ investigations and prosecutions. Those policies were first established by AG Griffin Bell in the aftermath of Watergate and rested on the premise that the Department of Justice must function as a “neutral zone, free from political pressure” or what Bell described as an agency “in which neither favor nor pressure nor politics is permitted to influence the administration of the law.” The announced structure dismantles this practice by embedding prosecutorial authority directly within the White House.

5) Other Risks

The proposed structure—and Vance’s description of it—creates litigation risks.

The appearance of prosecutorial discretion being directed from the White House lends substantial support to defendants’ claims of selective or vindictive prosecution and undermines the administration’s ability to receive a “presumption of regularity” (e.g., benefit of the doubt) in other matters before the courts. Those risks may be most concerning for otherwise lawful and legitimate investigations and prosecutions.

Vance has already described the initiative in terms that suggest direct White House involvement in targeting particular conduct, locations, or actors, coupled with political supervision. Housing the function in the White House rather than within DOJ’s existing enforcement architecture would provide evidence that such an approach has been operationalized. In effect, the organizational choice itself creates a record that defense counsel could reference as evidence of political direction over prosecutorial decisions.

Selective-prosecution claims are notoriously difficult to prove. But they are strengthened when defendants can point to explicit political involvement in charging or enforcement decisions. In traditional internal DOJ structures, lines of supervision and screening are designed to avoid even the appearance of political interference, precisely because such appearances can jeopardize cases and undermine credibility before the courts. These risks are not merely theoretical. Courts have made clear that public statements and conduct by the executive officials may constitute probative evidence of improper motive and can become central exhibits in such litigation.

Even if the administration ultimately asserts that the new AAG formally reports to the AG and derives prosecutorial authority through DOJ’s statutory chain of command, Vance’s public descriptions of the role will inevitably invite judicial scrutiny. Defendants are likely to argue that the White House exercised de facto control regardless of formal reporting lines, triggering discovery disputes, evidentiary hearings, and potentially dismissal motions.

The White House-centered structure does not merely raise abstract separation-of-powers concerns; it materially increases the risk that prosecutions will be delayed, compromised, or invalidated in court. By choosing a structure that foregrounds political involvement, the administration weakens the government’s own litigation posture—creating vulnerabilities that would be far less pronounced under the DOJ’s traditional enforcement framework.

A risk of duplicative work.

A threshold question is why a new division is necessary when DOJ already has substantial fraud enforcement infrastructure. Tyson Duva, the newly-installed head of the Criminal Division, reportedly told his Division that “the Fraud Section will remain entirely intact under the current Criminal Division structure and its mission will remain the same” but will have a “collaborative partnership” with the new AAG of Fraud. DOJ’s letter to Congress also says that the new Division will work “[c]losely with … Department components to identify, disrupt, dismantle organized and sophisticated fraud schemes across jurisdictions.”

For context, within the DOJ, the Criminal Division Fraud Section traditionally serves as the Department’s primary hub for complex, nationwide fraud prosecutions and is led by a senior career prosecutor who effectively functions as the government’s chief fraud enforcer. As of the end of 2024, the Fraud Section included more than 140 attorneys and regularly coordinated multi-district and international investigations. It also specifically had a “National Rapid Response Strike Force,” which handles large and complex health care fraud cases. In addition to the Criminal Division, DOJ’s Civil Division plays a central role in fraud enforcement, including the long-standing False Claims Act enforcement mechanisms that already provide nationwide reach and coordination. Just this past year, the Criminal Division Fraud Unit announced over $14.6 billion in charges in June 2025 and the Civil Division announced record False Claims Act Recoveries, most of which were due to healthcare fraud claims.

U.S. Attorneys’ Offices further supplement this work through district-level fraud, healthcare fraud, and public corruption units tailored to local enforcement needs. These offices routinely collaborate with Main Justice components on complex matters and already possess deep familiarity with regional actors and events. For example, one of the main cases cited as justification for the new Division, the Minneapolis “Feed Our Children” case, was initially brought in 2022 by the U.S. Attorney’s Office for the District of Minnesota and has had significant success.

Improving coordination across districts and agencies is a legitimate and worthwhile objective. But the duplication costs raise questions about whether enhanced enforcement is the actual goal.

The structure may be pretextual.

The administration’s stated emphasis on fraud enforcement sits alongside a growing staffing and capacity crisis across DOJ’s existing fraud units. As documented in our Anti-Corruption Tracker, the Department, including the FBI and other law enforcement agencies, has experienced substantial attrition in precisely the offices responsible for fraud enforcement. The Criminal Division’s Fraud Section alone has reportedly lost a significant number of personnel.

The erosion extends beyond staffing. The administration has weakened or eliminated core anti-corruption structures, including the Public Integrity Section and the FBI’s public corruption squad. It has shuttered the Kleptocracy Initiative along with multiple interagency task forces focused on complex financial crime. It has fired multiple Inspectors General, targeted the Corporate Transparency Act, and moved to eliminate the Consumer Financial Protection Bureau. It has dismissed crypto-related enforcement actions and reduced scrutiny of money laundering risks in digital asset markets. It has abandoned significant SEC enforcement cases. And it has diverted investigative and prosecutorial resources toward ideologically-framed “DEI fraud” matters while issuing pardons to individuals convicted of serious white-collar offenses.

Taken together, these actions reflect a sustained effort to eliminate the very programs and personnel that previously pursued fraud enforcement on a professional, evidence-driven, and nonpartisan basis. Those programs routinely brought cases against actors across the political spectrum, recovered billions of dollars in public funds, and secured convictions in complex healthcare and procurement fraud matters.

Against this backdrop, and alongside pre-existing units that currently do this type of work, the administration’s proposed new “anti-fraud” division appears less a response to an enforcement gap than a political stunt, an effort to obscure the systematic dismantling of existing anti-fraud programs, or an effort to weaponize law enforcement for politically driven purposes. Of greatest concern is that the proposed model, centralizing criminal enforcement authority in the executive’s political office, has parallels in other systems where such control has been used to target political opponents and disfavored groups. The model is inconsistent with American constitutional tradition and post-Watergate norms and raises the distinct possibility that this initiative is a vehicle for weaponizing enforcement rather than enhanced fraud prosecution.

If the goal is enhanced fraud enforcement, there are proven alternatives.

Major fraud initiatives including the COVID-19 Fraud Enforcement Task Force, the National Procurement Fraud Task Force (announced in 2019 under the first Trump administration), and the Health Care Fraud Prevention and Enforcement Action Team were all established through inter-agency coordination within DOJ’s existing framework, without requiring new statutory positions or imposing White House supervision.

To be sure, the effectiveness of interagency task forces can depend on whether they are sufficiently supported by senior leadership within the administration who have the authority to coordinate across components and agencies. But any benefit from having high-level leadership support and visibility likely does not justify the risks of bypassing DOJ’s statutory structure entirely.

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The White House proposal may best be understood as a form of performative anti-corruption designed to preempt criticism rather than strengthen enforcement. At a moment when the administration faces sustained allegations of misconduct and conflicts of interest, the creation of a new “fraud division” perhaps offers a rhetorical claim of toughness on corruption even as the underlying enforcement architecture is being systematically weakened.

As noted above and in our ongoing tracker, the administration has dismantled or diminished many of the institutions most directly responsible for identifying and prosecuting fraud. Against that backdrop, the proposed White House-directed fraud initiative represents a potential escalation, not a reform. Rather than relying on established DOJ components governed by law, norms, decades of professionalization, and internal checks, the administration would centralize control over criminal and civil investigations in a position reportedly operating at the direction of the president and vice president. If accurate, that structure would depart from the foundational principle that prosecutorial decisions must be insulated from political influence and conducted impartially.

The risk is not hypothetical. The danger arises if a White House-controlled fraud apparatus directs enforcement attention disproportionately or exclusively toward political opponents, particular jurisdictions, or disfavored groups without transparent standards and without adherence to DOJ policy or norms. Such a model would invert the logic of anti-corruption enforcement: weakening independent institutions while concentrating discretionary power in the political core of the executive.

In that sense, the initiative does not correct the erosion of DOJ’s anti-fraud capacity, it helps complete its disintegration.

FEATURED IMAGE: U.S. Vice President JD Vance answers questions during a press briefing in the Brady Briefing Room at the White House in Washington, DC on January 8, 2026, after announcing the White House’s new AAG position, among other topics. (Photo by Mandel NGAN / AFP via Getty Images)