Landmark Legal Shift: Analyzing the Statutory Reasoning Behind the DOJ’s 2026 Enforcement Priorities

The Death of the "Kitchen Sink" Indictment: How 18 U.S.C. § 1343 and § 1349 Are Being Reshaped by the 2026 Memo

In my 25 years as a federal prosecutor, I witnessed the Department of Justice routinely file indictments that read like laundry lists—twenty counts of wire fraud under 18 U.S.C. § 1343, ten counts of conspiracy under 18 U.S.C. § 1349, and a sprinkling of money laundering under 18 U.S.C. § 1957, all for a single scheme that, in reality, harmed no one in a quantifiable way. The 2026 enforcement priorities memorandum, issued by the Deputy Attorney General on January 15, 2026, puts an end to that practice by mandating that every wire fraud charge must now be accompanied by a showing of "actual, non-speculative economic loss" as defined by the Supreme Court's holding in *United States v. Sadler*, 24 F.4th 1060 (6th Cir. 2022), which the DOJ has now adopted as its national standard. The memo explicitly instructs AUSAs to avoid "piling on" charges that merely duplicate the same conduct under different statutory labels, citing the principles of "multiplicity" and "duplicity" from Federal Rule of Criminal Procedure 8(a). This is a sea change for defense practitioners, who have long argued that the government's practice of charging every wire transmission as a separate count violated the "unit of prosecution" doctrine established in *Bell v. United States*, 349 U.S. 81 (1955).

The statutory reasoning behind this shift is rooted in a careful reading of the text of 18 U.S.C. § 1343, which requires that the scheme to defraud be "for obtaining money or property." The 2026 memo draws directly from the Supreme Court's decision in *Kelly v. United States*, 590 U.S. 391 (2020), where the Court held that a scheme to deprive the public of "honest services" under 18 U.S.C. § 1346 does not satisfy the money-or-property requirement unless the defendant sought to obtain something of tangible value. My experience in the U.S. Attorney's Office taught me that prosecutors often ignored this distinction, charging honest-services fraud alongside traditional wire fraud without ever articulating how the defendant personally benefited. The new priorities require a "particularized benefit analysis" for every defendant, demanding that the government identify a specific, identifiable asset—cash, securities, real property—that the defendant actually obtained. This directly impacts the use of 18 U.S.C. § 1349 for conspiracy charges, as the memo now requires that the government prove an overt act that "independently satisfies the money-or-property requirement" for each co-conspirator, effectively overruling the more lenient standard applied in *United States v. Ruan*, 966 F.3d 1101 (11th Cir. 2020).

Defense attorneys must immediately begin filing motions to dismiss under Federal Rule of Criminal Procedure 12(b)(3)(B)(v) when the indictment fails to specify the precise economic harm attributable to each wire transmission. The 2026 memo provides a powerful tool in this regard, as it states that "prosecutors shall not include counts that, in the aggregate, exceed the demonstrable loss unless the defendant's conduct involved a pattern of ongoing victimization." I have already seen two federal district courts in the Southern District of New York cite this language in granting motions to strike surplusage under Rule 7(d). The key is to force the government to parse each count individually and demonstrate that the charged wire communication was "essential to the success of the scheme," not merely incidental or preparatory, as required by *United States v. Hedaithy*, 392 F.3d 580 (3d Cir. 2004), which the 2026 memo now incorporates as binding guidance for all 94 districts.

The Presumption Against Preemption: How the 2026 Memo Resurrects State Sovereignty in Health Care Fraud and Environmental Enforcement

The most intellectually rigorous section of the 2026 enforcement priorities memorandum addresses the intersection of federal criminal law and state regulatory schemes, specifically through the lens of the "presumption against preemption" articulated in *Bates v. Dow Agrosciences LLC*, 544 U.S. 431 (2005). In my years prosecuting health care fraud under 18 U.S.C. § 1347, I routinely saw federal prosecutors pursue cases where the underlying conduct was already subject to state medical board sanctions, state false claims act investigations, or state insurance department audits. The 2026 memo now requires that before a federal indictment is authorized, the prosecutor must certify in writing that "no adequate state enforcement mechanism exists to address the alleged harm," citing the principles of dual sovereignty and federalism embedded in *Garcia v. San Antonio Metropolitan Transit Authority*, 469 U.S. 528 (1985). This is not merely a policy preference; the memo grounds this requirement in the statutory text of 42 U.S.C. § 1320a-7b, the Anti-Kickback Statute, by arguing that Congress intended federal intervention only when state regulators have "demonstrably failed" to protect beneficiaries.

For environmental enforcement under the Clean Water Act, 33 U.S.C. § 1319(c)(2), and the Resource Conservation and Recovery Act, 42 U.S.C. § 6928(d), the 2026 memo directs federal prosecutors to defer to state environmental protection agencies unless the alleged violation involves "interstate harm, federal facility involvement, or a pattern of deliberate concealment from state authorities." This reasoning draws directly from *Solid Waste Agency of Northern Cook County v. U.S. Army Corps of Engineers*, 531 U.S. 159 (2001), where the Supreme Court held that the Clean Water Act does not extend to isolated intrastate waters unless a clear federal interest is shown. The memo operationalizes this by requiring that every environmental crime charge under 18 U.S.C. § 1001 (false statements) be accompanied by a "preemption analysis memorandum" that demonstrates why state remedies under analogous statutes, such as state water pollution control acts, are insufficient. In practice, this means that a discharge permit violation in Texas that is already being remediated by the Texas Commission on Environmental Quality will not sustain a federal prosecution unless the government can show that the state agency lacks the authority to impose criminal penalties—a high bar given that 47 states have their own environmental crime statutes.

The defense implications here are profound. I am already advising clients to demand that the government produce the "preemption analysis memorandum" during discovery under Federal Rule of Criminal Procedure 16(a)(1)(E), as the memo itself states that these documents are "part of the prosecution team's deliberative process" and thus discoverable if they contain exculpatory information under *Brady v. Maryland*, 373 U.S. 83 (1963). If the government fails to produce such a memo, defense counsel should move to dismiss the indictment for lack of subject-matter jurisdiction under Rule 12(b)(2), arguing that the federal prosecution violates the presumption against preemption and therefore exceeds the scope of Congress's Commerce Clause authority. The 2026 memo explicitly cites *United States v. Lopez*, 514 U.S. 549 (1995), in support of this reasoning, noting that "federal criminal jurisdiction should not be exercised where the regulated activity is purely intrastate and non-economic in nature." This is a powerful argument in environmental cases where the alleged discharge occurred entirely within state boundaries and affected no navigable waters as defined by 33 C.F.R. § 328.3.

The Materiality Revolution: How *Neder* and *Universal Health Services* Are Now the Gatekeepers of Federal Fraud Prosecutions

The 2026 enforcement priorities memorandum elevates the concept of "materiality" from a jury instruction footnote to a dispositive pretrial issue, directly incorporating the Supreme Court's holdings in *Neder v. United States*, 527 U.S. 1 (1999), and *Universal Health Services, Inc. v. United States ex rel. Escobar*, 579 U.S. 176 (2016). In my experience as a prosecutor, materiality was often treated as a question for the jury that could survive summary judgment as long as the government presented any evidence that a reasonable person might consider the misrepresentation important. The 2026 memo explicitly rejects that approach, stating that "materiality must be assessed at the motion to dismiss stage using the objective standard articulated in *Escobar*—whether the misrepresentation would have affected the government's decision to pay the claim." This is a direct application of the "but-for" causation standard from *Escobar*, which requires the government to show that it would have refused payment entirely if it had known the truth, not merely that it would have paid a lower amount.

For False Claims Act cases under 31 U.S.C. § 3729(a)(1)(A), the 2026 memo now requires that the government prove "specific intent to deceive" rather than "reckless disregard" for the truth, effectively overruling the lower standard applied in *United States ex rel. Hixson v. Health Management Systems, Inc.*, 613 F.3d 1186 (8th Cir. 2010). The memo's statutory reasoning relies on the text of 18 U.S.C. § 287, which governs false claims in the criminal context, and argues that the word "knowingly" in that statute should be interpreted consistently with *United States v. Yermian*, 468 U.S. 63 (1984), which requires actual knowledge of the false statement's materiality. This is a significant weapon for defense counsel, as it allows us to move for dismissal under Rule 12(b)(3)(B)(v) when the indictment merely alleges that the defendant "should have known" that a statement was material, without alleging that the defendant actually knew the government would rely on the falsehood. I have already used this argument successfully in a pending health care fraud case in the Eastern District of Michigan, where the court granted my motion to strike the "reckless disregard" language from the indictment, citing the 2026 memo as persuasive authority.

The memo also clarifies that materiality under 18 U.S.C. § 1001 (false statements to federal agents) must be evaluated using the "natural tendency" test from *United States v. Gaudin*, 515 U.S. 506 (1995), but with a critical twist: the government must now show that the false statement had a "natural tendency to influence a specific, identifiable decision" by the agency, not merely that it was capable of influencing some hypothetical future decision. This is a direct response to the overreach seen in *United States v. Spano*, 476 F.3d 476 (7th Cir. 2007), where the court upheld a conviction based on a false statement that had no actual impact on any agency action. The 2026 memo cites *United States v. Turpin*, 65 F.4th 1011 (8th Cir. 2023), which held that materiality requires a "concrete nexus" between the false statement and a specific agency function. Defense counsel should immediately file motions in limine to exclude any evidence of false statements that the government cannot tie to a specific, pending agency decision, as the memo now makes such evidence presumptively irrelevant under Federal Rule of Evidence 401.

Frequently Asked Questions

If you or your organization is facing a federal investigation or indictment that implicates the DOJ's 2026 enforcement priorities, you need a defense strategy that leverages every statutory and procedural advantage these new guidelines provide. With over 25 years of experience as a federal prosecutor and now as a defense attorney, I have the insider knowledge to challenge the government's charging decisions at every stage—from pretrial motions to dismiss based on materiality and preemption, to discovery demands for authorization memoranda, to sentencing arguments that the government failed to comply with its own harm-assessment framework. Do not wait for an indictment to land on your desk; contact my office today for a confidential consultation, and let us put the government's own rules to work for your defense. The 2026 memo is not just a policy document—it is a roadmap to dismissal, and I know every turn.