DOJ Launches Civil Rights Fraud Initiative by Leveraging the False Claims Act: What Federal Fund Recipients Should Know

On May 19, 2025, Deputy Attorney General Todd Blanche announced the Department of Justice’s launch of a sweeping Civil Rights Fraud Initiative designed to hold federal contractors, grant recipients, and other federally funded entities accountable under the False Claims Act (FCA) for misrepresenting compliance with civil rights laws.

This initiative—led jointly by DOJ’s Civil Rights Division and Civil Division’s Fraud Section—represents a significant shift in civil rights enforcement strategy, applying the FCA’s powerful remedies to civil rights violations that previously may have resulted only in administrative or reputational consequences. According to the DOJ, entities that “claim to comply with federal civil rights laws but in practice discriminate or violate those laws” will now face investigation and potential civil prosecution under the FCA.

Expanding the FCA into Civil Rights Enforcement

Traditionally, the False Claims Act has been used to combat fraud involving misuse of federal funds—typically in billing, procurement, or grant administration. The Civil Rights Fraud Initiative pushes this boundary, using false certifications of civil rights compliance as the hook for FCA liability.
According to DAG Blanche, the initiative targets entities that “exploit civil rights certifications to secure federal funds while tolerating discrimination, antisemitism, or unlawful exclusionary practices.” In particular, DOJ will focus on institutions that:

• Certify compliance with Titles VI, VII, IX, or other civil rights statutes but engage in conduct that undermines those very laws.
• Tolerate or fail to address antisemitic conduct, especially within schools or universities receiving Department of Education funds.
• Maintain DEI programs that confer benefits based on race, national origin, or ethnicity, in potential violation of the Equal Protection Clause or civil rights statutes.
• Restrict or deny access to sex-segregated programs, facilities, or sports based on gender identity in ways DOJ views as discriminatory.
• Retaliate against individuals who report discrimination, which can also form the basis of FCA claims when retaliation is tied to federally funded operations.

These theories of liability reflect DOJ’s expansive view of “false or fraudulent claims” under the FCA, which can include express false certifications or implied certifications where entities fail to disclose material noncompliance with conditions of payment under a federal program.

Enforcement Infrastructure and Multi-Agency Coordination

To support this initiative, DOJ has formed a specialized team composed of civil rights lawyers and experienced fraud prosecutors. This group will coordinate across:

• All 93 US Attorneys’ Offices
• The Department of Education, HHS, HUD, and Department of Labor
• State attorneys general and local enforcement agencies
• Private whistleblowers (relators) under the FCA’s qui tam provisions

DOJ emphasized that whistleblower actions will be central to enforcement, noting that individuals who report misconduct may be eligible to receive 15–30% of any recovery. This will likely drive a significant increase in private lawsuits filed by employees, students, or others with knowledge of internal practices. Given the posture the DOJ has assumed on DEI enforcement, it is also expected that DOJ will initiate cases on its own accord without whistleblowers.

Legal and Compliance Risks: What to Watch For

The Civil Rights Fraud Initiative creates significant new exposure for federal contractors, subrecipients, and grant-funded institutions. Legal risks stem not only from current policies, but also from how organizations document compliance, handle complaints, and represent themselves to federal agencies.

Risk areas include:

• DEI programs that define eligibility, awards, or advancement based on race or ethnicity, particularly when such programs are tied to federal funding or implemented without a narrowly tailored legal basis.
• Failure to investigate or act on antisemitic behavior, including failure to comply with Department of Education guidelines requiring protection of Jewish students under Title VI.
• Incomplete or inconsistent documentation of compliance with civil rights certifications required in federal contracts, cooperative agreements, or grant applications.
• Personnel decisions or program access rules tied to sex or gender identity, particularly in education, health care, or housing programs.
• Broad nondiscrimination policies that lack clear procedures for enforcement or that are inconsistently applied across business units or campuses.

Critically, entities can be liable under the FCA even if the underlying conduct is not criminal or overtly fraudulent. If DOJ or a court determines that civil rights noncompliance was material to the government’s decision to award or continue funding, and that the recipient knew or should have known about the noncompliance, FCA penalties may follow.

Proactive Steps to Mitigate Risk

Organizations that receive any form of federal funds—including defense contractors, educational institutions, nonprofit organizations, and health care providers—should take immediate steps to mitigate risk:

1. Conduct a privileged compliance audit of civil rights-related policies and certifications, particularly those made in connection with federal awards or contracts.
2. Assess DEI programs to ensure they do not provide race- or gender-based preferences without a defensible legal framework. Consider refocusing efforts on socioeconomic or neutral criteria.
3. Review all standard civil rights certifications made to federal agencies and ensure they reflect actual practice and procedures on the ground.
4. Strengthen internal complaint-handling mechanisms, including training for HR professionals, Title IX/VI coordinators, and in-house counsel on investigative protocols and documentation.
5. Update recordkeeping and documentation practices to demonstrate that all hiring, promotion, funding, and access decisions are merit-based and legally compliant.
6. Prepare for whistleblower risk, including review of internal reporting channels and protections against retaliation.

Looking Ahead

DOJ’s Civil Rights Fraud Initiative is likely to be a major driver of FCA litigation in the coming years. Similar to DOJ’s pandemic-related fraud initiatives, we expect to see:

• Investigative subpoenas (CIDs) and document demands;
• DOJ-led suits in high-profile areas like education, health care, and defense;
• Private relator suits, including those filed by current and former employees, students, contractors, and advocacy groups.

The scope of risk is broad, and entities cannot assume they are insulated from liability simply because they believe they are “doing the right thing” or promoting inclusive values. The FCA standard is focused on legal compliance with funding conditions, not intent. Now is the time to engage legal, compliance, and leadership teams to ensure your institution is prepared.

_{White & Case means the international legal practice comprising White & Case LLP, a New York State registered limited liability partnership, White & Case LLP, a limited liability partnership incorporated under English law and all other affiliated partnerships, companies and entities.}

_{This article is prepared for the general information of interested persons. It is not, and does not attempt to be, comprehensive in nature. Due to the general nature of its content, it should not be regarded as legal advice.}

_{© 2025 White & Case LLP}