False Claims Enforcement Expected Under Second Trump Administration

In a significant shift since the beginning of President Trump’s second term, the Department of Justice has intensified its enforcement of the False Claims Act, targeting fraud across multiple sectors and aligning with the administration’s stated priorities. July alone saw the DOJ announce over ten corporate settlements resolving alleged violations, highlighting the administration’s aggressive approach to combating fraud in federally funded programs.

The False Claims Act, one of the federal government’s primary anti-fraud tools, imposes liability on entities that knowingly submit false claims for payment to the government or improperly avoid obligations to pay the government. Penalties can be severe, including treble damages and additional fines. A distinctive feature of the law is its qui tam provision, allowing private citizens to file lawsuits on behalf of the government and potentially receive 15-30% of recovered funds—creating powerful incentives for whistleblowers.

This enforcement push aligns directly with priorities outlined in a May memorandum from the DOJ’s Criminal Division, which identified ten “high-impact areas” for white-collar enforcement. These include healthcare fraud, trade and customs violations, and threats to national security—all consistent with the Trump Administration’s broader policy agenda.

Since January, the Justice Department has made over 150 announcements regarding False Claims Act resolutions and initiatives. In healthcare, the DOJ partnered with Health and Human Services to form a dedicated False Claims Act Working Group, while the 2025 National Health Care Fraud Takedown—described as the largest in DOJ history—targeted schemes involving $14.6 billion in false claims, resulting in charges against over 300 defendants.

Trade and customs enforcement has seen similar attention. The DOJ recently reorganized its fraud units, adding personnel to focus on prosecuting trade fraud. Recent settlements include a $4.9 million agreement with a patio furniture company for evading duties on Chinese aluminum imports, and a $6.8 million settlement with a global plastic resin distributor for similar violations.

National security concerns have driven several major cases, particularly around cybersecurity compliance. In May, the DOJ reached an $8.4 million settlement with a defense contractor for failing to meet cybersecurity requirements in Department of Defense contracts. Principal Deputy Assistant Attorney General Yaakov Roth emphasized that “it is critical that defense contractors take the required steps to protect sensitive government information from bad actors.”

The administration has also launched a Civil Rights Fraud Initiative, using the False Claims Act to target what it describes as “illegal” Diversity, Equity, and Inclusion practices among federal funds recipients. In July, Attorney General Pam Bondi issued guidance clarifying which DEI policies the DOJ considers unlawful and offering best practices for compliance with federal antidiscrimination laws.

Beyond traditional False Claims Act enforcement, companies now face additional scrutiny through the Administrative False Claims Act (AFCA). Signed into law during President Biden’s final months, this legislation empowers federal agencies to pursue administrative actions for false claims up to $1 million—significantly expanding the government’s enforcement capabilities beyond DOJ-led actions.

The AFCA replaces the rarely used Program Fraud Civil Remedies Act of 1986, providing agencies with enhanced tools and incentives. These include broader liability definitions that encompass “reverse false claims,” higher recovery ceilings, more officials authorized to adjudicate cases, mechanisms for agencies to recover investigation costs, and extended statutes of limitations. At least four federal agencies have already published rules to implement AFCA requirements, suggesting increased activity ahead.

For companies doing business with the government, these developments signal heightened risk. False claims exposure can arise from numerous scenarios, including submission of inaccurate documents, false certifications of compliance, or failure to return overpayments. The combination of aggressive DOJ enforcement, expanded agency authority under the AFCA, and strong whistleblower incentives creates a challenging compliance environment that requires vigilant risk management and cross-functional coordination.

As a senior DOJ official recently noted, whistleblower tips are already increasing across priority enforcement areas—putting additional pressure on government contractors to proactively identify and address potential false claims risks before they become federal investigations.