Why This New Task Force Is a Dangerous Departure From Settled Fraud Law and Prosecutorial Boundaries

When the Government Forgets That Fraud Requires Intent: The CJFSI's Reckless Reimagining of Mens Rea

In my 25 years as a federal prosecutor, I witnessed countless task forces come and go, each promising to be the silver bullet against white-collar crime. But the Department of Justice's newly announced Cross-Jurisdictional Fraud Suppression Initiative, or CJFSI, is not merely another bureaucratic reshuffling—it represents a fundamental and dangerous departure from the bedrock principles of federal fraud law. The initiative, as described in the Attorney General's memorandum dated March 15, 2025, explicitly instructs U.S. Attorneys' offices to pursue charges under 18 U.S.C. § 1341 (mail fraud) and 18 U.S.C. § 1343 (wire fraud) based on what it calls a "pattern of regulatory non-compliance" rather than requiring proof of specific intent to defraud. This is not a minor procedural tweak; it is a direct assault on the mens rea requirement that has defined federal fraud jurisprudence since the Supreme Court's decision in United States v. McNally, 483 U.S. 350 (1987). The McNally Court was unequivocal: the mail fraud statute requires proof of a scheme to deprive another of money or property through false pretenses, not merely a scheme to violate a regulation or administrative rule. By lowering this bar, the CJFSI invites prosecutors to treat every regulatory misstep as a potential felony, turning the average business executive into a presumptive criminal for failing to dot every administrative i.

The practical implications of this shift are staggering. Under settled law, a prosecutor must prove that the defendant acted with the specific intent to deceive and cause harm—not merely that they were negligent or even reckless in their regulatory compliance. The CJFSI's guidance, however, encourages agents to focus on "the cumulative effect of multiple regulatory violations" as evidence of fraudulent intent, a concept that has no basis in the text of the mail fraud statute or in any Supreme Court precedent. I recall a case from my prosecutorial days where we charged a healthcare executive under 18 U.S.C. § 1347 (healthcare fraud) only after we had clear evidence of a deliberate scheme to submit false claims—not because he failed to file a form on time three times in a row. The CJFSI's approach would allow a prosecutor to aggregate a series of unrelated administrative oversights—a late filing here, a missing signature there—and present them to a jury as proof of a "fraudulent scheme." This is not merely aggressive prosecution; it is a fundamental rewriting of the criminal code by executive fiat, bypassing Congress entirely and violating the separation of powers doctrine that the Supreme Court has consistently defended in cases like United States v. Taylor, 142 S. Ct. 2015 (2022).

The defense bar must understand that this initiative is not about catching sophisticated fraudsters who hide assets in offshore accounts. It is about creating a new class of federal criminals: the busy, the overworked, and the bureaucratically imperfect. In my current practice, I am already seeing CJFSI-inspired indictments that charge wire fraud under 18 U.S.C. § 1343 for what amounts to nothing more than a failure to update a Securities and Exchange Commission filing within the required 10-day window, combined with a prior warning letter from the Federal Trade Commission about marketing language. The government's theory, as articulated in these early cases, is that the "pattern" of non-compliance demonstrates a "conscious disregard" for the regulatory scheme—a standard that sounds suspiciously like the civil recklessness standard from the False Claims Act (31 U.S.C. § 3729) rather than the criminal intent standard required by the Constitution. This is precisely the kind of prosecutorial overreach that the Framers sought to prevent when they enshrined the requirement for proof beyond a reasonable doubt in the Fifth Amendment's Due Process Clause.

The McNally-Travis Doctrine Under Siege: How the CJFSI Erases the Line Between Crime and Carelessness

One of the most cherished protections in federal fraud litigation is the McNally-Travis doctrine, which I have relied upon countless times in my career to defeat overreaching indictments. This doctrine, derived from the Supreme Court's holdings in McNally and Travis v. United States, 364 U.S. 631 (1961), establishes that the mail and wire fraud statutes do not create a general federal police power to punish any act of dishonesty or unethical conduct. Instead, they require a specific deprivation of a tangible property right or, under 18 U.S.C. § 1346, a deprivation of the intangible right of honest services, but only through a scheme involving bribery or kickbacks. The CJFSI's operational memorandum, however, explicitly instructs prosecutors to "look beyond the narrow confines of property-based fraud" and to consider "any conduct that undermines the integrity of a regulatory process" as a potential predicate for a fraud charge. This is a breathtaking expansion of federal criminal jurisdiction that effectively overrules the Supreme Court's decision in Cleveland v. United States, 531 U.S. 12 (2000), where the Court held that state regulatory licenses are not "property" for purposes of the mail fraud statute. The CJFSI's approach would allow prosecutors to charge a company for failing to maintain a valid state business license, as long as they can point to a "pattern" of regulatory non-compliance in other areas.

The practical effect of this doctrinal assault is that every federal regulation becomes a potential criminal trap. Consider the case of a mid-sized manufacturing company that has received three OSHA citations over five years for non-serious violations, has paid the fines, and has corrected the issues. Under the CJFSI, a prosecutor could aggregate these citations with a single late filing of an EPA emissions report and charge the company's compliance officer with wire fraud under 18 U.S.C. § 1343, arguing that the "pattern" of non-compliance shows an intent to defraud the government of its right to accurate information. This is not hyperbole; I am currently defending a client in the Eastern District of New York who faces precisely such charges. The government's theory is that my client's failure to disclose a prior regulatory enforcement action on a federal contract application, combined with two minor accounting errors in quarterly reports, constitutes a scheme to defraud the United States. The Supreme Court has repeatedly warned against this kind of prosecutorial creativity. In United States v. Waymer, 142 S. Ct. 1139 (2022), the Court emphasized that "the government cannot transform a civil regulatory violation into a federal crime simply by labeling it a fraud." The CJFSI ignores this admonition entirely.

As a defense attorney, I am particularly troubled by the CJFSI's reliance on what I call "guilt by aggregation"—the idea that a series of unrelated, minor infractions can be combined to create the impression of criminal intent. This violates the fundamental principle of criminal law that each element of an offense must be proven beyond a reasonable doubt, not inferred from a statistical pattern of conduct. The Federal Rules of Evidence, particularly Rule 404(b), generally prohibit the introduction of prior bad acts to prove a defendant's propensity to commit a crime. Yet the CJFSI's guidance encourages prosecutors to introduce evidence of prior regulatory violations under the guise of showing "knowledge, intent, or absence of mistake"—the very exceptions that courts have carefully cabined to prevent prejudice. I have already seen motions in limine filed in CJFSI cases that seek to exclude this evidence under Rule 403, arguing that its probative value is substantially outweighed by the danger of unfair prejudice. The courts are divided on this issue, and until the Supreme Court weighs in, defendants in CJFSI cases face an uphill battle against a government that has effectively rewritten the rules of evidence through prosecutorial policy.

The RICO Trojan Horse: Why Borrowing Enterprise Liability Without the Safeguards Is a Constitutional Catastrophe

The CJFSI's most insidious innovation is its adoption of an "enterprise liability" framework that borrows language from the Racketeer Influenced and Corrupt Organizations Act (18 U.S.C. § 1962) but deliberately strips away the procedural protections that Congress built into that statute. Under RICO, the government must prove a "pattern of racketeering activity" consisting of at least two predicate acts within a ten-year period, and those predicate acts must be specifically enumerated in the statute—including offenses like bribery, extortion, and securities fraud. The CJFSI, by contrast, allows prosecutors to define the "enterprise" as any business entity or government agency, and the "pattern" as any three regulatory violations within a five-year period, regardless of whether those violations would constitute a RICO predicate. This is not a mere administrative convenience; it is a fundamental violation of the principle of legality, which requires that criminal statutes give fair notice of the conduct they prohibit. A business executive reading the RICO statute can understand what conduct is forbidden. Under the CJFSI, that same executive must guess which regulatory violations, when aggregated, will trigger federal criminal prosecution.

The constitutional dimensions of this approach are staggering. The Fifth Amendment's Due Process Clause requires that criminal laws be sufficiently definite to provide notice and prevent arbitrary enforcement. The Supreme Court has struck down statutes for vagueness under this principle, most notably in United States v. Davis, 139 S. Ct. 2319 (2019), where the Court invalidated the residual clause of the Armed Career Criminal Act for failing to provide fair notice. The CJFSI's "pattern of regulatory non-compliance" standard is even more vague than the residual clause in Davis, because it does not specify which regulations count, how many violations constitute a "pattern," or what relationship, if any, must exist between the violations and the alleged fraudulent scheme. A prosecutor in one district might charge a company for three late tax filings, while a prosecutor in another district might require six. This lack of uniformity not only violates due process but also undermines the principle of equal protection under the law, as guaranteed by the Fourteenth Amendment. In my experience, this kind of prosecutorial discretion without clear statutory boundaries inevitably leads to selective prosecution based on factors like geography, industry, or even the political climate of the jurisdiction.

Moreover, the CJFSI's enterprise liability framework creates a dangerous incentive for prosecutors to target entire industries rather than individual wrongdoers. The memorandum explicitly encourages U.S. Attorneys to "identify patterns of non-compliance across similar businesses" and to "pursue coordinated, multi-district actions" against entire sectors. This is precisely the kind of overbroad enforcement that the Supreme Court warned against in United States v. Kozminski, 487 U.S. 931 (1988), where the Court cautioned that criminal statutes must be interpreted narrowly to avoid "sweeping within their ambit conduct that Congress did not intend to criminalize." By targeting entire industries—such as healthcare providers, financial services firms, or technology companies—the CJFSI threatens to chill legitimate business activity and innovation. I have spoken with general counsel at several Fortune 500 companies who are now advising their clients to seek pre-indictment immunity agreements before engaging in any novel business practice, for fear that a regulatory misstep could be aggregated into a federal fraud charge. This is not how a free market economy should function; it is how a surveillance state operates, where every business decision is made under the shadow of potential criminal prosecution.

How the CJFSI Weaponizes Administrative Law to Bypass Congressional Authority and the Separation of Powers

Perhaps the most fundamental constitutional objection to the CJFSI is its attempt to transform administrative regulations into criminal statutes without congressional authorization. The Constitution vests the power to define federal crimes exclusively in Congress, as the Supreme Court reaffirmed in United States v. Morrison, 529 U.S. 598 (2000), where the Court struck down provisions of the Violence Against Women Act for exceeding Congress's enumerated powers. The CJFSI, however, effectively allows executive branch prosecutors to define new crimes by selecting which regulatory violations, when aggregated, will be treated as fraud. This is a classic violation of the nondelegation doctrine, which prohibits Congress from delegating its legislative power to the executive branch without an "intelligible principle" to guide its exercise. The Supreme Court has not struck down a federal statute on nondelegation grounds since Panama Refining Co. v. Ryan, 293 U.S. 388 (1935), but the CJFSI's approach is so far outside the bounds of traditional prosecutorial discretion that it may well invite a challenge on this ground. If the government can create a "fraud" charge out of any three regulatory violations, there is no limit to what conduct can be criminalized—and that is precisely the kind of unbounded executive power that the Framers sought to prevent.

The practical consequences for defendants are devastating. Under the CJFSI, a company that has been subject to a civil consent decree with the Environmental Protection Agency, a warning letter from the Food and Drug Administration, and a minor fine from the Occupational Safety and Health Administration could find itself facing a multi-count indictment for wire fraud. The government's theory would be that these three regulatory actions constitute a "pattern" of conduct that demonstrates an intent to defraud the public or the government. But where is the specific intent to deceive? Where is the scheme to deprive someone of money or property? These elements are simply assumed away by the CJFSI's aggregation logic. I am currently litigating a case in the District of Columbia where the government has charged a medical device manufacturer with wire fraud based on three FDA warning letters over a four-year period, none of which involved patient harm or false claims. The government's expert witness is prepared to testify that the "pattern" of non-compliance shows a "culture of disregard for regulatory authority," which the government argues is equivalent to fraudulent intent. This is not the law; it is a prosecutorial theory that has no basis in any statute or Supreme Court precedent, and it will be vigorously challenged on appeal.

Defense attorneys must be prepared to attack the CJFSI on multiple fronts. First, we must file motions to dismiss based on the void-for-vagueness doctrine, arguing that the "pattern of regulatory non-compliance" standard fails to provide fair notice and invites arbitrary enforcement. Second, we must challenge the government's use of Rule 404(b) evidence, arguing that prior regulatory violations are not admissible to prove intent unless they are substantially similar and relevant to the specific fraudulent scheme alleged. Third, we must demand that the government prove specific intent to defraud under the traditional McNally standard, and we must object to any jury instruction that suggests a "pattern" of non-compliance can substitute for proof of intent. Finally, we must be prepared to take these cases to trial and to appeal any conviction based on the CJFSI's novel legal theories. The Supreme Court has a long history of reining in prosecutorial overreach in fraud cases, from McNally to Cleveland to Waymer, and there is every reason to believe that the Court will reject the CJFSI's dangerous expansion of federal fraud law once it is properly presented with a case. Until then, every defense attorney practicing in federal court must be vigilant, aggressive, and creative in protecting our clients from this unprecedented assault on the rule of law.

If you or your company is under investigation or has been indicted under the CJFSI or any federal fraud theory, you need a defense team that understands the law—not just the statutes, but the constitutional principles that limit prosecutorial power. I have spent