Whistleblowers will play a “significant” role in a new federal initiative cracking down on cybersecurity-related fraud, officials from the U.S. Department of Justice recently announced.

On Oct. 6, 2021, Deputy Attorney General Lisa O. Monaco unveiled the DOJ’s new Civil Cyber-Fraud Initiative, in which the department will use the False Claims Act to pursue cybersecurity related fraud committed by government contractors and grant recipients.

The initiative is the result of the DOJ’s ongoing comprehensive cyber review, aimed at developing actionable recommendations to enhance and expand the DOJ’s efforts against cyber threats. 

“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,” Monaco said in remarks announcing the initiative. “Well, that changes today. 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.”

The False Claims Act, which dates to the Civil War, is one of the government’s most effective weapons in fighting fraud on the government. The Act incentivizes whistleblowers, or Relators as they are known, to report a fraud on the government by rewarding them with a percentage of the amount the government successfully recovers as a result of the whistleblower’s False Claims Act case.

In Oct. 13 remarks at the Cybersecurity and Infrastructure Security Agency’s National Cybersecurity Summit, Acting Assistant Attorney General Brian M. Boynton said whistleblowers have been key in identifying new fraud schemes and providing technical expertise to complex investigations. 

“As they have in many other aspects of False Claims Act enforcement, we expect whistleblowers to play a significant role in bringing to light knowing failures and misconduct in the cyber arena,” he said. “False Claims Act enforcement and whistleblower reporting will help spur compliance by contractors and grantees.”   

Boynton said three common cybersecurity failures will be prime candidates for False Claims Act enforcement under the new initiative:

• The knowing failure to comply with cybersecurity standards
• The knowing misrepresentation of security controls and practices
• The knowing failure to timely report suspected breaches

Boynton said the new initiative will help hold contractors and grantees to their commitments to protect government information and infrastructure and lead to the timely identification, creation and publication of patches for vulnerabilities. 

We are here to help those who want to report wrongdoing. For advice about how to handle suspected fraud, contact Keller Grover for a free and confidential consultation.