The False Claims Act Could Become the New “It” Statute in an Uncertain Enforcement Landscape

Uncertainty was a prominent theme at last week’s ABA White Collar Crime Institute. The Trump administration has issued a series of directives that seem to shift and narrow the scope of (if not entirely abandon) a host of traditional investigative and enforcement priorities. This has left companies and their counsel in the unfortunate position of trying to divine where they face the most risk of regulatory action with little clear guidance. However, the administration’s recent comments and priorities suggest that one federal statute in particular, the False Claims Act (“FCA”), is viewed as fertile ground for increased enforcement activity. In a shifting and murky regulatory landscape, the FCA might be the one statute whose increased enforcement is all but assured.

Shifting Enforcement Priorities

President Trump and his administration have taken several steps in recent months to shift or pause the efforts of the federal government’s regulatory agencies. These actions signal an attempt to roll back various enforcement priorities in the spirit of deregulation and instead get “back to basics” by focusing on fraud schemes that harm investors.¹

On February 10, President Trump issued an executive order that mandated a 180-day pause on all Department of Justice investigations and enforcement actions under the Foreign Corrupt Practices Act (“FCPA”), as well as a review of all existing investigations and actions to determine if they are outside the “proper bounds” of the statute.² The executive order explained the administration’s view that the FCPA “has been systematically, and to a steadily increasing degree, stretched beyond proper bounds and abused in a manner that harms the interests of the United States.”³ It’s no secret that the statute has become a darling of the white-collar bar and imposed a costly compliance regime on American corporations. However, this action presents a sharp departure from a consistent regulatory priority and a hallmark of the federal enforcement docket. 

The Securities and Exchange Commission (“SEC”) has also taken steps that signal a transition away from prior “hot button” enforcement priorities, like cryptocurrencies. On February 20, the SEC announced that the new Cyber and Emerging Technologies Unit will replace the Crypto Assets and Cyber Unit.⁴ The focus of the new unit is on “combatting cyber-related misconduct and to protect retail investors from bad actors in the emerging technologies space.”⁵ The SEC’s Division of Enforcement is widely expected to emphasize retail investor protection as it did in the first Trump administration. Panelists across the ABA White Collar Crime Institute’s sessions noted that enforcement efforts are expected to mostly target fraud schemes that directly harm investors.

In a similar vein, last month the Commodities Futures Trading Commission’s (“CFTC”) Acting Chairman Caroline D. Pham announced a reorganization of its Division of Enforcement to "combat fraud and help victims while ending the practice of regulation by enforcement.”⁶ Pham added that this reorganization will “stop regulation by enforcement and is more efficient,” and that these “much-needed changes will maximize the CFTC’s resources to bring more actions to pursue fraudsters and other bad actors, and not punish good citizens.”⁷ This announcement has been heralded as a “back to basics” approach to regulatory enforcement. 

It is too soon to tell what other changes are in store for the regulatory enforcement landscape over the next four years. And commentators across the country have been offering more questions than answers in their attempts to forecast what companies can expect to see from the regulatory agencies. However, the administration’s clearly expressed priorities should offer some clues. Aside from the “bread and butter” fraud actions that regulators have brought for decades, companies and their executives should be on the lookout for enforcement activity in spaces that align with the Trump administrations priorities, including tariffs. 

The False Claims Act: A Useful Tool for the New Administration

The False Claims Act (“FCA”) is one federal statute whose purpose clearly aligns with the Trump administration’s professed goals of curtailing fraud and rooting out waste and abuse within government and its contractors. Therefore, companies with government contracts and their counsel should monitor their claims and statements carefully since this is one area where we can reasonably forecast increased enforcement activity.

The FCA was enacted in 1863 to punish defense contractors for their fraudulent claims during the Civil War. This statute is the federal government’s primary means of recovering funds that it paid in connection with allegedly fraudulent claims. The FCA imposes civil liability on any person who knowingly presents a false claim for payment to the government or makes a false statement in connection with a claim. The statute also enables whistleblowers (or “relators”) to file what are known as qui tam actions on behalf of the government and receive a share of any money recovered in the litigation. If the government or its relator establishes liability, then it can recover treble damages plus an additional penalty for each violation. Clearly the cost of any FCA violation is steep. 

The Trump administration has made abundantly clear that one of its top priorities is to root out government waste, fraud, and abuse. In addition to the Department of Government of Efficiency’s (“DOGE”) efforts to slash federal budgets and staffing, it is supposed to work with agencies to review their contracts for signs of waste and abuse.⁸ The FCA is the primary weapon in the federal government’s arsenal to combat any fraud it finds in its contracts. Indeed, recent comments by Michael Granston, the Deputy Assistant Attorney General in the DOJ Civil Division’s Commercial Litigation Branch, confirm that the administration views the FCA, which he described as a “powerful tool,” as a means to further its “stated focus on achieving governmental efficiency and rooting out waste, fraud and abuse.”⁹

In addition to the fact that the purpose of the FCA aligns with the Trump administration’s policy priorities, other recent executive actions seem to foretell an increase in FCA actions. For example, the Trump administration’s new trade policies present new risks of FCA violations. The underpayment of customs tariffs has already become a basis for FCA actions. However, increased tariffs and heightened attention to them increases the likelihood that the government will seek recoveries. Indeed, DAAG Granston also noted in his recent remarks that enforcement against illegal foreign trade practices will be a focus of the DOJ in light of President Trump’s tariff reforms. 

Last fiscal year, the DOJ obtained more than $2.9 billion in settlements and judgments from civil cases involving fraud and false claims against the government.¹⁰ However, given the administration’s clear priorities—as shown through the work of DOGE and the new tariffs—this number could be much higher in the next several fiscal years. 

¹See, e.g., https://www.cftc.gov/PressRoom/PressReleases/9036-25 (“Acting Chairman Pham: Time For CFTC to Get Back to Basics”) 
²https://www.whitehouse.gov/presidential-actions/2025/02/pausing-foreign-corrupt-practices-act-enforcement-to-further-american-economic-and-national-security/
³Id. 
4https://www.sec.gov/newsroom/press-releases/2025-42
⁵Id.
⁶https://www.cftc.gov/PressRoom/PressReleases/9044-25
⁷Id.
⁸https://www.whitehouse.gov/fact-sheets/2025/02/fact-sheet-president-donald-j-trump-reins-in-government-waste/
⁹https://www.law360.com/articles/2300751/doj-official-flags-aggressive-fca-approach-under-trump
¹⁰https://www.justice.gov/civil/false-claims-act