DOJ Revises Policy on Use of Guidance and Dismissal Authority in FCA Cases and Announces D.C. USAO Fraud Division

The announcements reflect the administration’s continued focus on FCA enforcement and raise additional compliance considerations for companies doing business with the government.

Key Points:

• The Justice Manual revisions (1) reinforce DOJ’s efforts to limit the use of sub-regulatory guidance in enforcement actions; and (2) update DOJ’s policy regarding its ability to seek dismissal of qui tam lawsuits, emphasizing that attorneys should continue to assess whether dismissal is appropriate on an ongoing basis.
• The D.C. US Attorney’s Office consolidation of enforcement resources into a single, dedicated Fraud and Asset Recovery Division is likely to accelerate investigations and increase the federal government’s capacity to pursue affirmative fraud cases.

In recent weeks, the Department of Justice (DOJ) has issued two announcements with implications for federal civil fraud and False Claims Act (FCA) investigations and litigation.

Justice Manual Updates

On September 18, 2026, DOJ announced revisions to the Justice Manual regarding the effect of agency guidance documents in enforcement actions and DOJ’s authority to seek dismissal of FCA actions brought by whistleblowers. The Justice Manual is the official DOJ reference document containing internal policies, procedures, and guidance for federal prosecutors and personnel; changes to the Justice Manual reflect shifting priorities in DOJ’s enforcement approach.

In particular, DOJ revised the Justice Manual to:

1. Track the standards in the memos issued by then Associate Attorney General Rachel Brand and then Attorney General Pam Bondi¹ and prohibit the use of sub-regulatory guidance in enforcement actions.² DOJ attorneys may not bring civil or criminal enforcement actions based only on alleged non-compliance with sub-regulatory guidance. DOJ explained that this revision “reflects the Department’s commitment to fair notice and the rule of law—individuals and businesses should be held accountable for violating binding legal obligations, not agency guidance that lacks the force and effect of law.”³ DOJ also stated that this revision will ensure that DOJ focuses its enforcement resources on violations of binding obligations.⁴
2. Reinforce DOJ’s ability to seek dismissal of FCA qui tam actions where DOJ declines to intervene, both at the time of declination and as litigation progresses.⁵ Specifically, the revised Justice Manual instructs that DOJ attorneys will assess each qui tam on a case-by-case basis to evaluate whether an affirmative dismissal would serve the federal government’s interest, and DOJ may re-evaluate that assessment throughout the litigation. DOJ also revised one factor that can serve as a basis for dismissal: Whereas the Justice Manual previously provided that DOJ should consider “[c]urbing meritless qui tams that facially lack merit (either because the relator’s legal theory is inherently defective, or the relator’s factual allegations are frivolous),” the updated version broadens this factor to simply “[c]urbing meritless qui tams.” Finally, the revised Justice Manual now requires US Attorneys’ Offices to provide notice to the assigned Fraud Section attorney at least 10 days before filing any motion to dismiss in a non-intervened qui tam case.

New Fraud and Asset Recovery Division

On September 23, 2026, US Attorney for the District of Columbia Jeanine Pirro announced the creation of a new Fraud and Asset Recovery Division within her office. The new division builds on the National Fraud Detection Center (announced on April 7, 2026) and various Executive Orders⁶ addressing fraud. US Attorney Pirro stated that the new division “will reinforce and consolidate our resources to hold fraudsters accountable and recover taxpayer dollars.”⁷ The division represents an expansion of the federal government’s civil fraud enforcement capacity and signals a heightened focus on FCA investigations and litigation.

The US Attorney’s Office will significantly increase and shift resources in its Affirmative Civil Enforcement Unit to form the Fraud and Asset Recovery Division. Dan Schiffer, who joined DOJ in 2014 and has spent over 10 years in the Civil Fraud Section, will run the new division, which will employ its own AUSAs, investigators, auditors, and support staff. The division will also focus on collections and asset recovery. The Financial Litigation Unit, which is responsible for enforcing and collecting both civil and criminal debts, will be under the new division’s purview.

Conclusion

DOJ’s announcements highlight the administration’s continued focus on FCA enforcement, and its willingness to shift resources to message its commitment to efficiently prosecuting fraud against the federal government. DOJ has signaled that it remains committed to aggressive enforcement of the FCA where clear legal violations are at issue, and companies doing business with the federal government should expect increased enforcement activity in the near term. To prepare, companies should consider reviewing and strengthening their compliance programs and internal whistleblower response protocols.

Latham & Watkins will continue to monitor developments in FCA enforcement. For more information, contact our White Collar Defense & Investigations Practice.