On September 18, 2025, the Department of Justice (“DOJ”) announced a civil False Claims Act (“FCA”) settlement against a New Jersey shipbuilder to resolve allegations that it improperly employed unauthorized workers to work on Navy ships. The settlement, which exceeded $4 million, is the second this year involving government contractors alleged to have employed unauthorized workers in violation of FAR 52.222-54, Employment Eligibility Verification. With immigration enforcement squarely at the center of the current administration’s domestic agenda, government contractors should be mindful of this enforcement theory and take appropriate steps to ensure compliance and protect themselves from a costly FCA claim. Continue Reading E-Verify and the False Claims Act: An Emerging Tool in Immigration Enforcement
False Claims Act
Bid Rigging Risk for Government Contractors
Consistent with the Trump Administration’s focus on procurement fraud, a recent settlement and guilty pleas secured by the DOJ demonstrate that bid rigging is in the Administration’s crosshairs. Government contractors should be aware of the legal risks associated with bid rigging when engaging in the bidding process. Continue Reading Bid Rigging Risk for Government Contractors
July 2025 Cybersecurity Developments Under the Trump Administration
This is the sixth blog in a series of Covington blogs on cybersecurity policies, executive orders (“EOs”), and other actions of the Trump Administration. The fifth blog is available here and our initial blog is available here. This blog describes key cybersecurity developments that took place in July 2025. …
Continue Reading July 2025 Cybersecurity Developments Under the Trump AdministrationLatest Cybersecurity False Claims Act Settlement with Diagnostics Provider Focuses on Sensitive Health Systems
In a recently announced settlement agreement with the U.S. Department of Justice (“DOJ”), Illumina, Inc. (“Illumina”) agreed to pay $9.8 million to resolve claims arising from alleged cybersecurity vulnerabilities in genomic sequencing systems that the company sold to federal agencies. The case is the latest in a series of False…
Continue Reading Latest Cybersecurity False Claims Act Settlement with Diagnostics Provider Focuses on Sensitive Health SystemsRecent Cybersecurity FCA Settlement Demonstrates Heightened FCA Risk to Government Contractors
On July 14, 2025, the U.S. Department of Justice (DoJ) and General Services Administration (GSA) announced a $14.75 million settlement of Civil False Claims Act allegations against IT company Hill ASC Inc. (Hill). This settlement is consistent with the current Administration’s focus on “fraud, waste, and abuse” in government procurement…
Continue Reading Recent Cybersecurity FCA Settlement Demonstrates Heightened FCA Risk to Government ContractorsJustice Department Establishes Civil Rights Fraud Initiative, Using False Claims Act to Target DEI
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.Continue Reading Justice Department Establishes Civil Rights Fraud Initiative, Using False Claims Act to Target DEI
Congress Attempts to Revitalize the Program Fraud Civil Remedies Act
Since 1986, the little brother to the civil False Claims Act, known as the Program Fraud Civil Remedies Act of 1986 (“PFCRA”), has seen very little use. Section 5203 of the Fiscal Year 2025 National Defense Authorization Act (“NDAA”) seeks to breathe new life into the law by renaming it…
Continue Reading Congress Attempts to Revitalize the Program Fraud Civil Remedies ActPenn State Agrees to Pay $1.25M in Settlement for Cybersecurity Non-Compliance False Claims Act Allegations
On Tuesday, October 22, 2024, Pennsylvania State University (“Penn State”) reached a settlement with the Department of Justice (“DoJ”), agreeing to pay the US Government (“USG”) $1.25M for alleged cybersecurity compliance violations under the False Claims Act (“FCA”). This settlement follows a qui tam action filed by a whistleblower and former employee of Penn State’s Applied Research Laboratory. The settlement agreement provides some additional insight into the priorities of DoJ’s Civil Cyber Fraud Initiative (“CFI”) and the types of cybersecurity issues of interest to the Department. It also highlights the extent to which DoJ is focusing on the full range of cybersecurity compliance obligations that exist in a company’s contract in enforcement actions.Continue Reading Penn State Agrees to Pay $1.25M in Settlement for Cybersecurity Non-Compliance False Claims Act Allegations
Tick-tock, the Court Starts the Clock: Deconflicting the FCA and Rule 4(m) of the FRCP
In keeping with the trend of increased attention on the False Claims Act’s (“FCA”) qui tam provisions, the Second Circuit recently weighed in on a seeming conflict between the statute and the relator’s obligations under the Federal Rules of Civil Procedure (“FCRP”). Under Rule 4(m) of the FRCP, the court generally must dismiss a complaint if the plaintiff fails to serve the defendant with a complaint and summons within 90 days of filing. Fed. R. Civ. P. 4(m). But a relator bringing suit under the qui tam provisions of the FCA may not serve a defendant until the complaint is unsealed and “until the court so orders.” 31 U.S.C. § 3730(b)(2). In cases brought under the qui tam provisions of the FCA, this creates the potential for questions regarding when the Rule 4(m) service-of-process clock begins to tick.
These questions seldom arise because courts ordinarily unseal a relator’s complaint and simultaneously order the relator to serve the defendant. In which case, the express order to serve the defendant plainly triggers the service-of-process clock under Rule 4(m). But what if the court unseals the relator’s complaint and then delays (or never issues) the order to serve the defendant? This was the question before the Second Circuit last month in U.S. ex rel. Weiner v. Siemens AG, No. 22-2656, 2023 WL 8227913, at 3 (2d Cir. Nov. 28, 2023).Continue Reading Tick-tock, the Court Starts the Clock: Deconflicting the FCA and Rule 4(m) of the FRCP
Third-Party Funding and the Constitutionality of Qui Tam Suits After Polansky
The Supreme Court’s decision in United States ex rel. Polansky v. Executive Health Resources, Inc., 143 S. Ct. 1720 (2023), has increased attention on arguments that the False Claims Act’s qui tam provisions may be unconstitutional. Although the majority’s opinion in the case did not address the issue, the…
Continue Reading Third-Party Funding and the Constitutionality of Qui Tam Suits After Polansky