TRENDS IN FALSE CLAIMS ACT LITIGATION IN THE TRUMP ADMINISTRATION
The False Claims Act (FCA) has long been a valuable tool in the recovery of government money. But that recovery has been concentrated in two industries: healthcare and government contractors. Under President Trump, the US Department of Justice (DOJ) has announced an intent to use the FCA more broadly and especially to target areas of political interest to the administration. Two examples of the expanded focus of the FCA are customs fraud and civil rights fraud.
Primer on the FCA
The FCA is a Civil War-era law designed to help the government recover funds fraudulently taken from the public fisc. The power of the FCA is that it allows private citizens to blow the whistle on fraudulent activity by filing a civil lawsuit on behalf of the government. The government can choose whether to join that lawsuit or not, but either way, the government gets a financial recovery if the lawsuit is successful. The private citizen who initiated the lawsuit also stands to gain financially: they may receive one-third of any successful financial recovery. The FCA also brings with it treble damages, civil penalties per claim and attorneys’ fees.
FCA lawsuits have yielded more than $78bn in recoveries since 1986. Recently, the annual recovery has been between $2.5bn and $3bn. So, private citizens are certainly incentivised to pursue FCA litigation.
Customs fraud
The DOJ is increasingly using the FCA to pursue alleged customs fraud involving underpayment or evasion of duties. These actions generally rely on the FCA’s “reverse false claims” provision, which imposes FCA liability for concealing, avoiding or decreasing obligations to pay the government or creating false records that are material to an obligation to pay the government.
Jul-Sep 2025 Issue
Dykema Gossett PLLC