Investigations, Enforcement, & Compliance Alerts

On March 14, 2025, in a late Friday decision, a panel of judges from the U.S. Court of Appeals for the Fourth Circuit ruled that, for the time being, the Trump Administration is permitted to enforce Executive Orders (EOs) 14151 (Ending Radical and Wasteful Government DEI Programs and Preferencing) and 14173 (Ending Illegal Discrimination and Restoring Merit-Based Opportunity), which prohibit Diversity, Equity, and Inclusion (DEI) (also referred to as Diversity, Equity, Inclusion, and Accessibility, or DEIA in the EOs) efforts within the federal government and by federal contractors, respectively.

On January 21, 2025, President Trump issued a sweeping executive order titled “Ending Illegal Discrimination and Restoring Merit-Based Opportunity” (EO). The EO targets diversity, equity, inclusion, and accessibility (DEI) programs in the public and the private sectors. The EO signals that organizations receiving federal funds, whether through government contracts or otherwise, may be liable under the False Claims Act (FCA)—one of the government’s most powerful anti-fraud enforcement tools providing for treble damages and steep penalties—if they maintain what the EO refers to as “illegal” DEI programs that violate federal anti-discrimination laws. Significantly, the EO includes provisions that are likely to make it easier to establish FCA violations.

On October 22, 2024, the Department of Justice announced a False Claims Act (FCA) settlement related to a government contractor’s failure to adhere to certain cybersecurity requirements. Specifically, Pennsylvania State University (Penn State) has agreed to pay US$1.25M to resolve allegations that it violated the FCA by failing to comply with cybersecurity requirements in fifteen contracts or subcontracts involving the Department of Defense (DOD) or the National Aeronautics and Space Administration (NASA). The DOJ announcement is available here: https://www.justice.gov/opa/pr/pennsylvania-state-university-agrees-pay-125m-resolve-false-claims-act-allegations-relating.

On February 1, 2022, the U.S. Department of Justice (“DOJ”) released its annual False Claims Act (“FCA”) recovery statistics and announced that it had obtained more than $5.6 billion in settlements and judgments in fiscal year 2021 from civil cases involving fraud and false claims against the government.  This total—which was driven by record-breaking recoveries in the health care industry, a traditional leading area for FCA recoveries—is more than double the amount recovered in the previous fiscal year and marks the second-highest annual total ever, behind only the approximately $6.1 billion recovered in fiscal year 2014.  The significant increase in 2021 recoveries reverses a downward trend in the totals obtained by the DOJ during the previous couple of years.  A careful analysis of the statistics and announcements demonstrates that the FCA continues to be a powerful tool supporting one of the DOJ’s “top priorities”—combatting fraud in an ever-expanding array of industries doing business with the government—and reveals what to expect in FCA enforcement in the coming years, from both the government and whistleblowers.