On May 19, 2025, Deputy Attorney General Todd Blanche issued a memorandum establishing a DOJ Civil Rights Fraud Initiative.  The Initiative will use the False Claims Act (“FCA”) to “investigate and . . . pursue claims against any recipient of federal funds that knowingly violates federal civil rights laws.”  Educational institutions, federal contractors, grantees, and other entities that receive federal funding should take note of the latest FCA Initiative.  Similar FCA initiatives, such as those focused on collusion and cybersecurity fraud, have resulted in significant related FCA enforcement.

The Initiative follows President Trump’s January “Ending Illegal Discrimination and Restoring Merit-Based Opportunity” Executive Order (“EO 14173”)–discussed here–which obligates federal agencies to include provisions in contracts and grants requiring counterparties or recipients to (1) “agree” that compliance with all applicable federal anti-discrimination laws is “material to the government’s payment decisions” for purposes of the FCA, and (2) certify that the counterparty or recipient does not operate “any programs promoting DEI that violate any applicable Federal anti-discrimination laws” (emphasis added).  The Initiative’s citation to “federal civil rights laws” appears to encompass more than the “federal anti-discrimination laws” referenced in EO 14173, however.   

The memorandum sets forth two ways that the False Claims Act may be used “against those who defraud the United States by taking its money while knowingly violating civil rights laws.”  First, the memorandum states that the FCA may be implicated when a federal contractor or recipient of federal funds falsely certified compliance with civil rights laws and violates those laws.  As an example, the memorandum states that “a university that accepts federal funds could violate the False Claims Act when it encourages antisemitism, refuses to protect Jewish students, allows men to intrude into women’s bathrooms, or requires women to compete against men in athletic competitions.”

Second, the memorandum states that there could be liability where contractors or grantees “certify compliance with civil rights laws while knowingly engaging in racist preferences, policies, programs, and activities, including through . . . DEI programs.” 

It further states that despite the Supreme Court decision in Students for Fair Admissions, Inc. v. President & Fellows of Harv. Coll., “many corporations and schools continue to adhere to racist policies and preferences—albeit camouflaged with cosmetic changes that disguise their discriminatory nature.”  However, Students for Fair Admissions only addressed the use of race in university admissions; it did not impact the laws prohibiting discrimination in employment (Title VII of the Civil Rights Act of 1964) or procurement (42 U.S.C. § 1981).

As Attorney General Pam Bondi signaled in an earlier memo, titled “Ending Illegal DEI and DEIA Discrimination and Preferences,” the Initiative will be led by the Civil Fraud Section and the Civil Rights Division.  They will coordinate with the Criminal Division, other federal agencies, and AUSAs to be designated in each of the US Attorney’s Offices.

The memorandum concludes by stating that the DOJ “strongly encourages” qui tam actions and other forms of information reporting, effectively seeking whistleblower reports of potential violations of federal civil rights laws and signaling that enforcement could come through private plaintiff action.

Takeaways

The announcement of the Civil Rights Fraud Initiative is consistent with many other indications that the DOJ under the Trump Administration will continue to enforce the FCA vigorously and use the FCA as a tool for its broader enforcement initiatives.[1]

Federal contractors, grantees, and other federal funding recipients should take steps to mitigate FCA risk, including: (1) having employment counsel review policies and programs to ensure compliance with civil rights and anti-discrimination laws and advise about how best to document that review, (2) evaluating compliance systems to ensure they have mechanisms for identifying and addressing civil rights and discrimination concerns, (3) consulting counsel on compliance certifications and assessments, and (4) developing a plan to respond to potential criminal or civil investigations.

[1] For example, it was widely reported that Deputy Assistant General Michael Granston and Director of the Civil Division Fraud Section Jamie Ann Yavelberg identified tariff and customs fraud as priorities for FCA enforcement in their remarks at a recent Federal Bar Association conference.