False Claims Act Takes Center Stage in 2026 Federal Enforcement Strategy

The False Claims Act (FCA) continues to serve as the federal government’s primary weapon against fraud, with the current administration signaling an unprecedented expansion of its use across multiple sectors. Government officials have repeatedly emphasized their commitment to wielding the FCA aggressively, creating a landscape where companies face heightened scrutiny and potential liability.

“Stopping rampant fraud is a top priority, and the False Claims Act remains one of the government’s most powerful weapons against fraud,” stated Deputy Attorney General Todd Blanche in a recent announcement following another record-breaking year of FCA enforcement actions.

This administrative focus became evident in July 2025, when the Department of Justice (DOJ) and Department of Health and Human Services (HHS) renewed their False Claims Act Working Group. The collaboration identified six priority areas for enforcement, including Medicare Advantage fraud, pharmaceutical pricing issues, and manipulation of electronic health records.

In August 2025, the DOJ partnered with the Department of Homeland Security to form the Trade Fraud Task Force, specifically targeting tariff evasion. This cross-agency collaboration brings together prosecutors and investigators to pursue companies attempting to circumvent customs duties.

The administration has also expanded its Corporate Whistleblower Awards Pilot Program, creating additional incentives for individuals to report potential fraud. These initiatives collectively demonstrate the government’s commitment to encouraging whistleblowers and rewarding those who uncover fraudulent activities.

Customs and Tariff Fraud Enforcement Surges

International trade violations have emerged as a primary focus area for FCA enforcement. In May 2025, the DOJ issued a memorandum prioritizing enforcement against international trade, tariff, and customs fraud under the reverse false claims provision of the FCA, which applies when entities underreport or underpay amounts owed to the government.

The DOJ’s newly created Market, Government, and Consumer Fraud Unit within the Criminal Division’s Fraud Section, combined with the Trade Fraud Task Force, provides significant resources dedicated to uncovering these violations.

Recent settlements highlight this priority. In December 2025, the DOJ announced a $54.4 million settlement with Ceratizit USA LLC for failing to pay customs duties on tungsten carbide products from China – the largest FCA settlement involving customs fraud allegations to date. This case originated from a whistleblower who received nearly $10 million from the settlement.

Other significant settlements included $6.8 million with MGI International LLC subsidiaries for evading duties on plastic resin imports from China, and $4.9 million with Grosfillex Inc. for evading antidumping duties on aluminum products, with a whistleblower receiving almost $1 million from the proceeds.

Despite the Supreme Court’s decision in Learning Resources, Inc. v. Trump invalidating certain tariffs imposed under the International Emergency Economic Powers Act, the administration continues to implement sweeping tariffs under other authorities, creating an expanding risk landscape for importers.

DEI Programs Under Intense Scrutiny

Following President Trump’s January 2025 Executive Order “Ending Illegal Discrimination and Restoring Merit-Based Opportunity,” the administration has targeted diversity, equity, and inclusion (DEI) programs at institutions receiving federal funding.

Multiple federal agencies quickly implemented certification requirements for grant recipients, requiring them to affirm compliance with federal anti-discrimination laws and avoid certain DEI practices. Although these certification requirements initially faced legal challenges and injunctions, the Fourth Circuit recently vacated a preliminary injunction in National Association of Diversity Officers in Higher Education v. Trump, holding that requiring certification of compliance with federal anti-discrimination laws does not violate constitutional rights.

In February 2026, Deputy Assistant Attorney General Brenna Jenny confirmed the DOJ’s intention to use all available tools, including the FCA, to target allegedly discriminatory DEI programs. The government has positioned this approach as targeting discrimination in hiring and promotion decisions rather than attacking DEI programs directly.

Health Care Remains Enforcement Priority

Health care continues to dominate FCA enforcement, accounting for $5.7 billion of the $6.8 billion in FCA settlements and judgments in fiscal year 2025. The Centers for Medicare and Medicaid Services recently announced a major crackdown on health care fraud, including deferring $259.5 million in Medicaid funding to Minnesota and implementing a nationwide moratorium on Medicare enrollment for certain suppliers.

Three main areas received particular attention: managed care fraud, prescription drug schemes, and medically unnecessary care. CMS has expanded its audit of Medicare Advantage plans to address estimated billions in overbilling, while DOJ has intervened in cases alleging kickbacks to steer beneficiaries into specific plans.

Deputy Assistant Attorney General Jenny recently identified several emerging areas for enforcement attention, including defective medical devices, skin substitutes, and network adequacy for managed care plans. She also confirmed DOJ’s continued reliance on data analysis to identify potential FCA targets.

State Attorneys General and Private Equity Scrutiny

States continue to maintain active false claims enforcement dockets, with recent statutory amendments strengthening their tools. Massachusetts, for example, expanded its False Claims Act in 2025 to impose new disclosure obligations on private equity firms, real estate investment trusts, and management services organizations connected to health care portfolio companies.

Under the expanded Massachusetts law, entities with an “ownership or investment interest” exceeding 10% may now face liability for FCA violations committed by their affiliated health care providers. The statute requires disclosure of any known violation within 60 days, creating uncertainty for companies navigating compliance timelines.

Cybersecurity Enforcement Expands

The DOJ has intensified its use of the FCA to pursue government contractors for alleged cybersecurity misrepresentations and failures. In 2025, the DOJ announced nine cybersecurity-related FCA settlements, surpassing the total number of such settlements reached during the entire previous administration.

These cases involved a wide range of issues, including failure to comply with required cybersecurity standards, misrepresentation of controls and practices, inadequate system monitoring, and failure to report incidents in a timely manner. Whistleblowers initiated five of the nine settlements, demonstrating their central role in cybersecurity FCA enforcement.

Significant Court Decisions Shape FCA Landscape

Several key court decisions continue to shape FCA enforcement. The Eleventh Circuit is currently considering United States ex rel. Zafirov v. Florida Medical Associates LLC, which challenges the constitutionality of the FCA’s qui tam provisions under Article II’s Appointments Clause. This case could significantly impact whistleblowers’ ability to bring FCA claims on behalf of the government.

In Wisconsin Bell, Inc. v. United States ex rel. Heath, the Supreme Court expanded the FCA’s reach by holding that even partial government funding can trigger FCA liability. The Court determined that Treasury deposits into a program otherwise funded by private sources satisfied the statute’s “any portion” government funding requirement.

Meanwhile, in United States v. Regeneron Pharmaceuticals, Inc., the First Circuit addressed causation standards in Anti-Kickback Statute cases, holding that a claim “resulting from” an AKS violation is false under the FCA only if the kickback was a but-for cause of the submitted claim. This decision deepens a circuit split with other courts that have adopted more lenient standards.

As the administration continues its aggressive enforcement approach, companies across industries must remain vigilant about compliance, internal controls, and the expanding scope of FCA liability. The intersection of whistleblower incentives, agency priorities, and evolving court interpretations creates a complex risk environment that requires proactive management and thorough legal guidance.