The Department of Justice (DOJ) recently announced a new initiative targeting cybersecurity-related fraud by government contractors and grant recipients…
The Department of Justice (DOJ) recently announced a new initiative targeting cybersecurity-related fraud by government contractors and grant recipients. The Civil Cyber-Fraud Initiative will rely on the DOJ’s existing enforcement authority under the False Claims Act (FCA).
“For too long, companies have chosen silence under the mistaken belief that it is less risky to hide a breach than to bring it forward and to report it. Well that changes today,” Deputy Attorney General Lisa Monaco said in remarks at Aspen Institute’s Cyber Summit. “We are announcing today that we will use our civil enforcement tools to pursue companies, those who are government contractors who receive federal funds, when they fail to follow required cybersecurity standards — because we know that puts all of us at risk. This is a tool that we have to ensure that taxpayer dollars are used appropriately and guard the public fisc and public trust.”
False Claims Act
In broad terms, the FCA imposes liability on any person who knowingly submits a false claim to the government or knowingly makes a false record or statement to get a false claim paid by the government. The FCA also imposes liability when false claims or statements are used to avoid having to pay money to the federal government. The law also contains qui tam provisions, which allow private persons to file suit for violations of the FCA on behalf of the government and to share in any recovery.
Although the FCA has been around since 1863, the government has stepped up enforcement and penalties in recent years. The DOJ’s latest initiative springs from a comprehensive review designed to develop actionable recommendations to enhance and expand the Justice Department’s efforts against cyber threats. According to the agency, it plans to rely on the FCA to pursue cybersecurity-related fraud by government contractors and grant recipients. “We will extract very hefty fines,” Monaco said. “We will protect whistleblowers who bring those violations and those failures forward.”
New Cybersecurity Enforcement
The new initiative will be led by the Civil Division’s Commercial Litigation Branch, Fraud Section, whose goal will be to hold entities accountable when they put federal agency information or systems at risk “by knowingly providing deficient cybersecurity products or services, knowingly misrepresenting their cybersecurity practices or protocols, or knowingly violating obligations to monitor and report cybersecurity incidents and breaches.”
According to the DOJ, the benefits of the initiative will include:
Building broad resiliency against cybersecurity intrusions across the government, the public sector and key industry partners.
Holding contractors and grantees to their commitments to protect government information and infrastructure.
Supporting government experts’ efforts to timely identify, create and publicize patches for vulnerabilities in commonly-used information technology products and services.
Ensuring that companies that follow the rules and invest in meeting cybersecurity requirements are not at a competitive disadvantage.
Reimbursing the government and the taxpayers for the losses incurred when companies fail to satisfy their cybersecurity obligations.
Improving overall cybersecurity practices that will benefit the government, private users and the American public.
Key Takeaway
The DOJ is the latest federal agency to use its existing authority to crack down on companies that fail to adopt adequate cybersecurity standards. To avoid costly liability, we encourage businesses that contract with the federal government to thoroughly review their cybersecurity protocols and breach notification procedures.
If you have questions, please contact us
If you have any questions or if you would like to discuss the matter further, please contact me, Thomas Herndon, Jr., or the Scarinci Hollenbeck attorney with whom you work, at 201-896-4100.
Local Zoning and Land Use Rules Every New Jersey Rental Property Owner Should Understand
Owning a residential rental property in New Jersey involves more than finding tenants and collecting rent. Property owners must comply with a combination of state laws, municipal ordinances, building and housing codes, and zoning and land use regulations. These requirements can affect everything from the number of dwelling units permitted at a property to whether […]
Real Estate Litigation Explained: Top 5 Disputes and How to Avoid Them
The five most common real estate disputes are breach of contract claims, landlord-tenant conflicts, zoning and land use disagreements, construction claims, and boundary disputes. Understanding why each arises, and taking preventive steps early, can help property owners, tenants, developers, and investors avoid costly litigation. Key Takeaways: Real estate transactions are complex endeavors involving numerous parties […]
When a Child Turns 18: The Gap in Your Family’s Estate Plan
Once a child turns 18, parents lose the automatic legal authority to make medical and financial decisions on their behalf, even if the child still lives at home or remains on the family’s insurance. Three documents close that gap: a durable power of attorney, a health care proxy or directive, and a HIPAA authorization. For […]
Business Mediation: An Overview and Practical Tips
Business mediation is a confidential, voluntary process in which a neutral third party helps companies negotiate a resolution to a commercial dispute without going to trial. Because working with a mediator is very different from litigating in the courtroom, it is important to understand how commercial mediation works, when it makes sense for your dispute, […]
Top 5 Causes Leading to Construction Defect Litigation
The five most common causes of construction defect litigation are design defects, substandard materials, workmanship defects, code violations, and subsurface defects. Because these flaws can compromise a building’s integrity, functionality, or safety, they frequently lead to disputes involving multiple parties and high financial stakes. Key takeaways: What is Construction Defect Litigation? Construction litigation is complex, […]
How to Protect Your New Jersey Business When Going through a Divorce
The most effective ways to protect your business in a divorce are put in place before one begins: a prenuptial or postnuptial agreement, clean separation of business and personal finances, and divorce contingencies built into your operating or buy-sell agreements. If divorce is already underway, the priorities shift to establishing how the business is classified […]
No Aspect of the advertisement has been approved by the Supreme Court. Results may vary depending on your particular facts and legal circumstances.
Sign up to get the latest from our attorneys!
Explore What Matters Most to You.
Consider subscribing to our Firm Insights mailing list by clicking the button below so you can keep up to date with the firm`s latest articles covering various legal topics.
Stay informed and inspired with the latest updates, insights, and events from Scarinci Hollenbeck. Our resource library provides valuable content across a range of categories to keep you connected and ahead of the curve.
Let`s get in touch!
Sign up to get the latest from the Scarinci Hollenbeck, LLC attorneys!
