Justice Department Launches Civil Rights Fraud Initiative Using False Claims Act to Target DEI Violations

Federal authorities have launched a major initiative that could reshape how organizations approach diversity programs, marking a significant shift in enforcement strategy.

The Department of Justice has formalized a new Civil Rights Fraud Initiative through a memorandum issued by Deputy Attorney General Todd Blanche on May 19, 2025. This program represents an unprecedented expansion of False Claims Act (FCA) enforcement, signaling the DOJ’s intent to treat violations of civil rights laws as fraud against the federal government.

While the DOJ has previously pursued False Claims Act cases against federal fund recipients who falsely certified compliance with federal standards, including anti-discrimination provisions, this initiative represents a dramatic escalation in both scale and focus.

Under the new framework, the Justice Department will coordinate investigations and bring FCA cases against organizations receiving federal funding that certify compliance with nondiscrimination laws while allegedly engaging in discriminatory practices. The DOJ has specifically identified several target areas, including institutions allowing individuals to use facilities based on gender identity rather than biological sex, diversity programs that assign benefits based on protected characteristics, and educational institutions that fail to address antisemitism.

The initiative implements a nationwide enforcement structure, with each U.S. Attorney’s Office designating a Civil Rights Fraud Coordinator. These coordinators will identify and pursue cases in partnership with the Civil Rights Division and the Civil Division’s Fraud Section. The DOJ will also collaborate with multiple federal agencies and state and local enforcement bodies.

Central to this enforcement strategy is the False Claims Act, a powerful civil fraud statute allowing the government and whistleblowers to pursue entities submitting false certifications to obtain federal funds. If an organization certifies compliance with civil rights laws while knowingly operating programs deemed discriminatory, each payment request could potentially constitute a false claim under the law.

The consequences of FCA violations are severe, including treble damages, substantial penalties, and significant reputational harm. Organizations should note that certifications of compliance with Title VI, Title IX, Section 1557 of the Affordable Care Act, and similar provisions are standard requirements for participation in federally funded programs.

Despite the initiative’s broad scope, the DOJ’s legal theory may face substantial challenges. The government must prove that false certifications directly caused the government to make payments it otherwise would have withheld. In many diversity program contexts, this connection may be difficult to establish.

Additionally, the Supreme Court’s 2023 decision in United States ex rel. Schutte v. SuperValu Inc. established that FCA liability depends on the defendant’s subjective knowledge. Organizations that reasonably believed their policies complied with federal law may be able to contest the required knowledge element, even if the DOJ later disagrees with their interpretation.

The initiative also comes just days after the Supreme Court’s May 22, 2025, decision in Kousisis v. United States, which, while limiting certain prosecutorial powers in fraud cases involving economic harm, may still provide leeway for the novel cases contemplated in this initiative.

Legal experts suggest organizations receiving federal funding should immediately assess their risk exposure by reviewing diversity programming, civil rights compliance structures, and federal agency certifications. Particular attention should be given to any program elements that allocate benefits or impose restrictions based on protected characteristics.

The initiative represents a significant pivot in federal enforcement priorities and creates a new compliance challenge for universities, healthcare systems, nonprofit organizations, and federal contractors that maintain diversity and inclusion programs while receiving federal funding.

As this enforcement landscape evolves, organizations will need to carefully balance their diversity objectives with the heightened scrutiny and potential legal exposure this initiative creates.