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June 25, 2025
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On May 19, 2025, U.S. Deputy Attorney General Todd Blanche issued a memorandum launching the “Civil Rights Fraud Initiative” (the “CRFI”).  The CRFI outlines how individuals can pursue claims against federally funded organizations that knowingly violate federal civil rights laws through the use of the False Claims Act (“FCA”).

I. Overview of the False Claims Act (FCA)

The FCA allows the government – and private individuals acting on its behalf – to bring civil lawsuits against those who defraud the federal government.  These lawsuits are called “Qui Tam” claims and allow private individuals (acting as whistleblowers) to file lawsuits on behalf of the government.  Successful individuals can potentially collect up to 30% of the recovered damages.  Damages under these types of claims can be costly – as those found liable may be subject to civil penalties, including treble (triple) damages.

The FCA may be implicated when an organization (1) accepts federal funds; (2) falsely certifies compliance with federal civil rights laws; and (3) knowingly engages in conduct that violates such laws.

II. Trump’s Executive Orders and the FCA Overlap

Federal contractors and federal grant recipients are required to (1) agree that they comply with applicable federal anti-discrimination laws and (2) certify that they do not operate any programs promoting DEI.  That certification could serve as the basis for an FCA claim.

III. Civil Rights Fraud Initiative (CRFI)

The CRFI team will be co-led by the Civil Division’s Fraud Section and the Civil Rights Division, as well as other federal entities. Private individuals, such as employees, are encouraged to aggressively pursue FCA “qui tam” claims through whistleblowing. This means that employees could begin pursuing FCA claims against employers who are not in compliance with all applicable federal anti-discrimination laws.

IV. Employer Guidance

Employers receiving federal funds should act promptly and conduct due diligence into their policies, programs, training, etc., to ensure they are fully aligned with federal anti-discrimination laws and provide equal access to all employees.  Employers need to carefully consider their policies and practices to ensure they do not discriminate against employees of any protected class.  Employers should also review current and prospective government contracts with counsel to assess any potential liability.

If you have any questions about the CRFI or want to ensure that your organization is in compliance with the developing federal guidance, contact any member of the McNees Labor and Employment Group.