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False Claims Act

False Claims Act mechanics, treble damages cases, certification-based liability theories.

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judicial
Enterprise Technology Solutions pays $2.25M over SBA set-aside fraud claims
The $2.25 million civil settlement resolves the False Claims Act allegations, but the release is silent on debarment and any criminal exposure for the named individuals.
Enterprise Technology Solutions and Zahid and Shamela Sheikh agreed to pay $2.25 million to resolve False Claims Act allegations that the company falsely claimed eligibility for two SBA programs and used the misrepresentation to win set-aside contracts. U.S. Attorney Jeanine Ferris Pirro announced the civil settlement. Contractors certifying size and status on bids should read it as another sign that set-aside eligibility is an active enforcement front; the release doesn't say whether ETS faces debarment.
SAT
trade-press
CMMC self-attestation during Phase Two freeze carries FCA risk
Annual compliance affirmations without documented evidence of continuous monitoring could face False Claims Act scrutiny if a breach later exposes control gaps, and the July suspension of third-party assessments extends the window.
DoD's July 13 suspension of Phase Two CMMC mandatory third-party assessments has extended the period in which contractors rely on self-attestation. While the department conducts its 60-day review, Phase One self-assessment requirements remain in force. For contractors handling CUI at Level 2, that means senior officials continue signing annual compliance affirmations under DFARS 252.204-7021. The less-visible risk: if a cyber incident later triggers an investigation and documented evidence of continuous control monitoring isn't there, those affirmations can face FCA scrutiny. The Civil Cyber-Fraud Initiative has already yielded settlements where contractors allegedly misrepresented their implementation of NIST SP 800-171 controls.
SAT
trade-press
DOJ arrests Oxygen Forensics CEO for concealing Russian ownership
Wire fraud charges target a scheme that netted over $2 million in DHS and DOD contracts after 2022 sanctions made the true ownership structure radioactive.
DOJ arrested Oxygen Forensics CEO Lee Reiber in Idaho and Russian co-owner Oleg Davydov in London on wire fraud conspiracy charges. The criminal complaint alleges the phone-forensics company concealed that five Russian nationals controlled it while selling to the Secret Service, Homeland Security Investigations, the DHS inspector general, and DOD. After the U.S. expanded Russia sanctions in 2022, Reiber was installed as CEO and the Russian owners were removed from public filings, but internal emails show the shareholders continued calling "fateful decisions." Government procurement officials told investigators they wouldn't have awarded or renewed contracts had they known the company was Russian-owned. Access Now's Natalia Krapiva called the timing "both a national security and a human rights scandal."
SEP 24
independent
Ninth Circuit Rejects HUD, DOT Authority to Define FCA Materiality
The 2-1 ruling is the first appellate decision to reject an agency effort to define FCA materiality through grant certifications, narrowing a key enforcement mechanism for the Civil Rights Fraud Initiative.
On August 25, the Ninth Circuit held 2-1 that HUD and DOT lacked statutory authority to require grant recipients to certify antidiscrimination compliance as material to government payment decisions under the False Claims Act. The court also struck conditions restricting fund use for "gender ideology," "elective abortions," or "illegal immigration." Federal grantees and contractors facing agency-imposed materiality certifications are the primary affected class. The appellate panel reasoned that Congress already defined "material" in the FCA and the Executive cannot impose its own definition, a holding that appears broadly applicable beyond the antidiscrimination context at issue.
SEP 18
trade-press
Ex-CISA Employee Billed 33-Hour Days Across Secret Contractor Jobs
The guilty plea exposes a remote-work oversight failure that raises an uncomfortable question: how many other federal cyber employees held multiple jobs during the hiring boom without detection?
A former CISA employee pleaded guilty to a federal false claims charge for secretly holding multiple federal contractor jobs while employed full-time at the agency, at one point billing 33-hour days across four simultaneous positions. Richeline Anisso Fung must repay nearly $250,000 for the scheme, which ran from 2021 to 2024 and went undetected by both CISA and the contractors who employed her. The case exposes a remote-work oversight gap that flourished during the federal cyber hiring boom, the kind of fact pattern that makes primes and contractors ask who on their own payroll might be doing the same thing.
SEP 3
judicial
Honeywell Aerospace Pays $2.04M to Settle DFARS Cyber FCA Case
The settlement continues DOJ's Civil Cyber-Fraud Initiative string of enforcement actions against defense contractors for cybersecurity noncompliance on federal contracts.
Honeywell Aerospace Inc. agreed to pay $2,042,518 to resolve False Claims Act allegations that it failed to comply with cybersecurity requirements in a Department of Defense contract. The DOJ press release does not specify which DFARS controls were at issue or what contract was involved. Honeywell Aerospace was a business segment of Honeywell International Inc. until June 29, when it became a standalone public company. The settlement follows a pattern of CCFI enforcement actions against defense contractors, including the $8.4M Raytheon/Nightwing settlement and the $4.6M MORSECORP settlement earlier this year.
SEP 1
trade-press
Contractor may have used Grok to falsify VA financial records, CBCA finds
The first federal procurement tribunal finding of AI-falsified discovery documents exposes a detection gap the government has no plan to close.
The Civilian Board of Contract Appeals found that Venergy, a VA construction contractor, may have used Grok AI to alter audited financial statements during discovery, concealing contract data behind electronic white boxes on three years of filings. The board dismissed Venergy's $4.23 million claim against the VA as a sanction, while a VA OIG criminal investigation proceeds in parallel. The case is the first time a procurement tribunal has found generative AI used to manipulate discovery documents, and it lands just as GSA announced $13 billion in suspected procurement fraud, underscoring how far detection capabilities trail the tools available to bad actors.
AUG 26
trade-press
FCA whistleblower recoveries hit record $6.8B as cybersecurity fraud enters spotlight
A record 1,297 qui tam filings and explicit inclusion of cybersecurity fraud in FCA enforcement mean defense contractors' DFARS and CMMC compliance gaps now carry whistleblower exposure, and the first-to-file rule punishes delay.
The Justice Department secured a record $6.8 billion in False Claims Act settlements and judgments in FY2025, driven by 1,297 qui tam whistleblower suits, also an all-time high. Relators collect 15% to 30% of any recovery under the FCA, and the statute's first-to-file rule bars everyone except the first whistleblower to file on a given fraud scheme, regardless of who holds better evidence. Cybersecurity fraud, including knowing misrepresentation of NIST SP 800-171 or CMMC compliance status, is explicitly within FCA scope. The arithmetic for defense contractors is unforgiving: an insider who documents a compliance gap before the company self-discloses stands to capture a significant share of what DOJ recovers.
AUG 25
trade-press
DOJ and SBA target 8(a) pass-throughs that lack genuine control
The government is no longer waiting for obvious fraud: it's demanding 8(a) contractors prove they actually control the work, and SBA hasn't defined the threshold.
DOJ and SBA are coordinating enforcement against 8(a) contractors who function as pass-throughs: entities holding set-aside contracts without performing substantive work or exercising genuine managerial control. Recent settlements, including a $21.3M SDVOSB case, show investigators examining operational reality. They're asking who makes decisions and who does the work, and whether the 8(a) firm controls its own billing. The burden is shifting onto contractors to prove genuine control, and SBA hasn't defined what that requires.
AUG 21
judicial
Sierra Nevada Company to Pay $7.75M in FCA Cyber Settlement
The latest Civil Cyber-Fraud Initiative enforcement shows DOJ doesn't need a breach to extract millions. A false cybersecurity attestation is treated like a padded invoice.
Sierra Nevada Company has agreed to pay $7.75 million to resolve False Claims Act allegations that it submitted false claims regarding its cybersecurity compliance in federal contract submissions, the U.S. Attorney's Office for the Eastern District of Virginia announced. The settlement fits a now-familiar Civil Cyber-Fraud Initiative pattern, joining ATI-Gallant, MORSECORP, and Raytheon/Nightwing, in which DOJ has extracted millions without alleging any data breach or system compromise. The false attestation alone was the claim.
JUL 28
independent
FAR Council squeezes termination settlements to 90 days
The proposal buys faster closeout by making contractors choose between thin support, late filings and False Claims Act exposure.
The FAR Council proposed cutting the deadline for termination settlement proposals from one year to 90 days while leaving the underlying support burden intact. Primes, subcontractors and counsel would have to collect cost data, address inventory, develop profit positions and resolve subcontractor claims on a compressed clock. The efficiency case is obvious. So is the litigation risk if contractors pad estimates or file before the record is ready.
JUL 20
regulator
DOE lifts AFCA false-claim cap to $1 million
A 6.7x penalty jump turns old billing disputes and compliance representations into larger legal inventory for energy contractors.
The Department of Energy issued a final rule updating its Administrative False Claims Act regulations, raising the maximum claim amount from $150,000 to $1 million and extending DOE’s enforcement lookback. Primes, subs and counsel now have materially higher exposure for false claims, reverse false claims and written misrepresentations involving federal funds. The rule does not specify whether the higher cap reaches pre-rule conduct.
JUL 11
judicial
Canadian-owned firms settle SBIR FCA claims for $223,618
This is SBIR eligibility hygiene dressed as fraud enforcement, important for documentation but not a new DOJ targeting theory.
Advanced Global Services, Paradigm Shift Technologies and Gennady Yumshtyk agreed to pay $223,618 to settle False Claims Act allegations tied to Small Business Innovation Research awards funded by the Air Force and Navy. Contractors and counsel should treat SBIR eligibility representations as FCA-sensitive contract records. The settlement is modest and SBIR-specific, so it signals continued DOJ attention rather than a broader Civil Cyber-Fraud Initiative shift.
JUL 10
judicial
LOGZONE pays $507,144 over Navy DFARS cyber failures
DOJ is converting DFARS control gaps into fraud exposure, which is a different problem than a bad assessment score.
LOGZONE Inc., a Huntsville, Alabama defense contractor, agreed to pay $507,144 to resolve False Claims Act liability for knowingly failing to meet DFARS cybersecurity requirements on Navy contracts. Primes, defense-industrial-base suppliers and counsel should read this as more than a contract compliance miss. DOJ’s Civil Cyber-Fraud Initiative is again treating covered defense information controls as payment-integrity conditions, with no public answer yet on whether any data was compromised.
JUN 18
judicial
David Duggin pleads guilty in IC kickback case
The charge is simple procurement corruption, and the release leaves almost everything operationally useful off the page.
Former intelligence community contractor David Duggin, 55, of Orrtanna, Pennsylvania, pleaded guilty in federal court in Maryland to conspiracy charges tied to a kickback scheme. DOJ says he conspired to commit offenses against the United States by soliciting and accepting kickbacks. For contractor counsel, the useful fact is the charge language; the release supplies little detail beyond it.
JUN 12
judicial
Broadway, Cornerstone agree to $21.3M set-aside settlement
The personal payments matter as much as the corporate check: DOJ named the CEO and president in the False Claims Act resolution.
Broadway Electric Inc., Cornerstone Contracting Inc., CEO John Oehler and President Christian Blake agreed to pay $21.3 million to resolve False Claims Act allegations that they improperly obtained federal contracts reserved for service-disabled veteran-owned small businesses and other eligible small businesses. The source does not describe the alleged certification defects, so the usable lesson is narrower: set-aside eligibility allegations can pull companies and senior executives into the same settlement.
JUN 9
judicial
Nevada man pleads guilty in $1.8M Air Force bid-rigging scheme
The plea keeps DOJ’s procurement-collusion strike force pointed at base-level facility buys, where modest contracts still carry felony exposure.
Scott G. Srodes, a former shelving and storage distributor employee, pleaded guilty in the Middle District of Georgia to bid rigging and conspiracy to defraud the government. DOJ says collusive bids covered more than $1.8 million in Air Force healthcare projects at Moody Air Force Base and aircraft maintenance facilities at Nellis, funded through the Defense Logistics Agency’s Facilities Maintenance, Repair, and Operations Program. It is the second guilty plea in the investigation, with individual employees squarely in DOJ’s frame.
JUN 2