DOJ Forms Civil Rights Fraud Initiative: A New Branch of False Claims Act Enforcement

On May 19, 2025, U.S. Deputy Attorney General Todd Blanche announced the formation of a Civil Rights Fraud Initiative “to investigate and, as appropriate, pursue claims against any recipient of federal funds that knowingly violates federal civil rights laws.” The initiative will be co-led by the Department of Justice (DOJ) Civil Division’s Fraud Section and the Civil Rights Division, and it will consist of a team of attorneys from each division to “aggressively pursue this work together.” Blanche also directed each of the 93 U.S. attorney’s offices to identify an assistant U.S. attorney to pursue these efforts.

The DOJ formed the Civil Rights Fraud Initiative to support the Trump administration’s and the DOJ’s focus on eliminating diversity, equity, and inclusion (DEI) and diversity, equity, inclusion, and accessibility (DEIA) programs within federal contractors and other private entities that receive federal funding. To support these goals across the federal government, the initiative will partner with various federal agencies, including the Department of Education, the Department of Health and Human Services, the Department of Housing and Urban Development, and the Department of Labor, as well as state attorneys general and local law enforcement “to share information and coordinate enforcement actions.”

False Claims Act Enforcement

As its primary method of enforcement, the Civil Rights Fraud Initiative will utilize the False Claims Act “against those who defraud the United States by taking its money while knowingly violating civil rights laws.” The False Claims Act is a federal statutory scheme that broadly prohibits the submission of false claims or certifications to the federal government for the payment or receipt of federal funds. Under the statute, any person or company that knowingly makes a false certification to the federal government as a condition for the receipt of federal funds may be liable to the United States for actual and treble damages arising from the false certification. In announcing the initiative, Blanche identified a company’s false certifications of compliance with Titles IV, VI, and IX of the Civil Rights Act of 1964 as potential violations of the False Claims Act.

The False Claims Act also includes an enforcement mechanism for private individual whistleblowers to file actions in federal district court on behalf of the United States. In these so-called qui tam actions, a whistleblower brings claims for False Claims Act violations on behalf of the federal government and may receive a portion of any settlement or damages recovered as an award for bringing the whistleblower claims. To support the goals of the Civil Rights Fraud Initiative, Blanche stated that the DOJ “strongly encourages these lawsuits” by private whistleblowers because the DOJ “alone cannot identify every instance of civil rights fraud.”

False Claims Act Violations of Federal Civil Rights Laws

For companies and individuals under threat of enforcement by the Civil Rights Fraud Initiative, the most important question is, what constitutes a false certification of compliance with federal civil rights laws that could expose them to liability under the False Claims Act.

For that answer, it is necessary to consider the executive order and the DOJ policy memorandum that the Civil Rights Fraud Initiative is being formed to enforce.

In his January 21 executive order 14173, “Ending Illegal Discrimination and Restoring Merit-Based Opportunity,” President Trump directed the federal government to eliminate “race- and sex-based preferences under the guise of so-called ‘diversity, equity, and inclusion’ (DEI) or ‘diversity, equity, inclusion, and accessibility’ (DEIA) that can violate the civil-rights laws of this Nation.” In particular, Trump ordered the DOJ and all federal agencies to “combat illegal private-sector DEI preferences, mandates, policies, programs, and activities” by “ending illegal preferences and discrimination.” The executive order further directed that every federal contractor or grant recipient be required to “agree that its compliance in all respects with all applicable Federal anti-discrimination laws is material to the government’s payment decisions” for purposes of the False Claims Act.

Fifteen days later, Attorney General Pam Bondi issued a policy memorandum titled “Ending Illegal DEI and DEIA Discrimination and Preferences,” in which she further directed the DOJ to “investigate, eliminate, and penalize illegal DEI and DEIA preferences, mandates, policies, programs, and activities in the private sector and in educational institutions that receive federal funds.” However, the attorney general clarified that the DOJ’s enforcement of the executive order “is intended to encompass programs, initiatives, or policies that discriminate, exclude, or divide individuals based on race or sex.” The memorandum explains that the DOJ’s current enforcement policy “does not prohibit educational, cultural, or historical observances — such as Black History Month, International Holocaust Remembrance Day, or similar events — that celebrate diversity, recognize historical contributions, and promote awareness without engaging in exclusion or discrimination.”

The president’s executive order and the DOJ’s memoranda also reference the U.S. Supreme Court’s decision in Students for Fair Admissions Inc. v. President & Fellows of Harvard College, in which the Supreme Court held that race-based admissions systems in higher education discriminate on the basis of race and violate the equal protection clause of the Fourteenth Amendment. The court specifically held that a university’s consideration of an applicant’s race as a factor for admission was unconstitutional but did not preclude a university from considering “an applicant’s discussion of how race affected his or her life, be it through discrimination, inspiration, or otherwise.” With the Civil Rights Fraud Initiative, the DOJ appears to be expanding the Supreme Court’s holding in this case to federal contractors and entities that receive federal funding.

Considering these sources, the Civil Rights Fraud Initiative will likely focus its enforcement on companies that consider race, sex, or another protected category as a factor in affirmative employment decisions, such as hiring or promotion, to promote diversity within the company. The DOJ considers these practices to be in violation of federal civil rights laws. If a company certifies that it is in compliance with those laws and receives federal funds, but bases affirmative employment decisions on protected categories, the DOJ may pursue a False Claims Act claim against the company.[1] As of now, the Civil Rights Fraud Initiative’s False Claims Act enforcement should not target an entity simply for the use of “educational, cultural, or historical observances ... that celebrate diversity, recognize historical contributions, and promote awareness without engaging in exclusion or discrimination.”

Conclusions and Key Takeaways

The administration’s current enforcement priorities appear to be focused on eliminating the use of race- or sex-based factors as considerations for affirmative employment decisions by federal contractors or private entities that receive federal funding. The formation of the Civil Rights Fraud Initiative and its use of the False Claims Act to pursue these claims, as well as the potential for private whistleblowers, presents a new and substantial expansion of the DOJ’s enforcement in this area. Companies contracting with the federal government or receiving federal funding should carefully review language related to compliance with civil rights laws in any certifications made to the government. These companies should also evaluate their processes and policies to ensure compliance with civil rights laws in light of these new enforcement priorities.

Please contact the authors if you have any questions about this article or potential enforcement actions under the False Claims Act.

[1] It is not clear whether discriminatory adverse employment actions, such as termination or demotion based on a protected category, will be pursued by the initiative, as federal civil rights laws and the U.S. Equal Employment Opportunity Commission already provide avenues for private employees to bring these lawsuits against their employers.