Heightened False Claims Act Enforcement Risks Emphasize Compliance Importance

False Claims Act Enforcement Intensifies Under New Administration

The Department of Justice is ramping up enforcement of the False Claims Act (FCA), signaling a more aggressive approach to combating fraud against the government. Despite the typical stability in FCA enforcement between administrations, several indicators point to an expanded role for this powerful civil remedy tool under the Trump administration.

In just the first few months of the new administration, the DOJ has announced over 40 settlements resolving alleged FCA violations across diverse sectors including defense contracting, pharmaceutical manufacturing, health insurance, pandemic relief funds, and customs. The department has also firmly defended the constitutionality of qui tam provisions that allow whistleblowers to file lawsuits on behalf of the government.

The surge in qui tam actions is particularly noteworthy. Fiscal Year 2024 saw a record 979 such lawsuits filed—the highest number in a single year—creating a substantial pipeline of new DOJ investigations that could take years to resolve. Of the $2.9 billion in FCA settlements and judgments recovered in FY 2024, more than $2.4 billion came from qui tam cases, underscoring their importance in the enforcement landscape.

In a significant legal battle currently unfolding in the 11th Circuit, DOJ has intervened to defend the qui tam statute against constitutional challenges. In United States ex rel. Zafirov v. Florida Medical Associates, the government is appealing a district court ruling that struck down the qui tam statute as violating the Appointments Clause. The DOJ argues that whistleblowers acting as relators are not officers of the United States and therefore don’t exercise executive power inconsistently with Article II of the Constitution.

Senior DOJ officials have publicly reinforced their commitment to aggressive FCA enforcement. In February 2025, then-Deputy Assistant Attorney General Michael Granston emphasized that enforcement would align with “the new administration’s stated focus on achieving governmental efficiency and rooting out waste, fraud, and abuse.” He specifically highlighted illegal foreign trade practices as an area of focus, suggesting the FCA could play a significant role in enforcing the administration’s tariff policies.

Two emerging risk areas—cybersecurity and international trade—have generated notable enforcement actions. In the cybersecurity realm, MORSECORP Inc. agreed to pay $4.6 million to settle allegations that it failed to comply with Department of Defense cybersecurity requirements while falsely certifying compliance. Similarly, Raytheon paid $8.4 million to resolve claims it failed to implement mandated cybersecurity regulations despite certifying compliance to the DoD.

In the international trade space, Evolutions Flooring Inc. reached an $8.1 million settlement for allegedly submitting false information to U.S. Customs and Border Protection regarding the country of origin of Chinese-manufactured wood flooring, allowing it to evade antidumping, countervailing, and Section 301 duties. Additionally, DOJ has intervened in a case against Barco Uniforms Inc., alleging the company engaged in a double-invoicing scheme to deliberately undervalue imported products and reduce customs duties.

The administration has also signaled its intent to use the FCA in new areas. A recent Civil Rights Fraud Initiative announced by Deputy Attorney General Todd Blanche aims to pursue claims where illegal discrimination is alleged, particularly encouraging qui tam lawsuits in this area. President Trump further reinforced this direction through an Executive Order targeting diversity, equity, and inclusion programs among government contractors, specifically referencing the FCA.

These developments come amid significant regulatory changes for government contractors, with several Executive Orders aimed at overhauling the federal procurement system and the Federal Acquisition Regulation.

For companies doing business with the government, the message is clear: FCA risks remain significant and may be increasing. Businesses should proactively strengthen their compliance programs and internal controls, particularly in light of changing regulations. Companies involved in imports must be especially vigilant about accurate documentation, as even inadvertent errors could trigger investigations.

Best practices to mitigate FCA risk include comprehensive compliance program reviews, close oversight of third parties, employee training, robust internal reporting mechanisms, and adherence to mandatory disclosure requirements. By taking these proactive measures, companies can reduce their FCA liability exposure and demonstrate commitment to compliance with applicable laws and regulations.