The United States government is the largest contractor in the world. Each year, it spends hundreds of billions of dollars procuring a wide variety of services and products. For example, according to a U.S. Government Accountability Office 2021 snapshot of federal contracting, the Department of Defense contracted for $421.8 billion in products and services in fiscal year 2020. The Center for Medicare and Medicaid Services separately reported $829.5 billion in Medicare spending and $671.2 billion in Medicaid spending in 2020. Hospital care, physician and clinical services and retail prescription drugs were the three largest categories of healthcare spending. A common element to all federal contracting is a reliance on the internet and electronic networks to perform the work contemplated by any of these contracts. In addition, like anyone using the internet in our 21st Century economy, the federal government and its contractors are vulnerable to cyberattack. In fact, current events show the U.S. government and its contractors are increasingly targeted for cyberattacks by foreign governments as the newest front in global conflicts.
In an effort to promote cybersecurity best practices, the U.S. Department of Justice recently announced it will hold accountable government contractors and grant recipients that knowingly put U.S. information or systems at risk by providing deficient cybersecurity products or services, knowingly misrepresent their cybersecurity practices or protocols, or knowingly violate their obligations to monitor and report cybersecurity incidents and breaches.
Civil Cyber-Fraud Initiative At A Glance
On Oct. 6, 2021, the U.S. Department of Justice announced the launch of its Civil Cyber-Fraud Initiative, which seeks to combat new and emerging cyber threats to the security of sensitive information and critical systems. This initiative follows President Joe Biden’s May 2021 Executive Order on Improving the Nation’s Cybersecurity.
The DOJ said it will use the False Claims Act to pursue cybersecurity related fraud involving government contractors and grant recipients. The Act, which was originally signed into law in 1863 to help combat fraud by suppliers to the United States government during the Civil War, is one of the federal government’s most effective weapons for fighting fraud on the government.
It also incentivizes Relators, or whistleblowers, as they are more commonly 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.
The initiative is broad, encompassing both contractors and grant recipients who work to secure government agencies’ data and those who provide services and products to the government.
Kinds of Cyber-Fraud Actions
There are numerous types of potential fraud that can occur under the umbrella of cybersecurity violations. Some known examples include:
- The total absence of compliance with cybersecurity requirements found in the government’s contracts. For example, if a major company has a contract with the government that states it must have certain cybersecurity infrastructure in place, yet it doesn’t meet that requirement, they could be held liable under the False Claims Act.
- Failure to report cybersecurity breaches. For example, a company with an IT group whose team identifies a security flaw, but knowingly fails to fix the vulnerability in a timely manner or to report it to the government, could be held liable.
Keller Grover is Uniquely Positioned to Represent Cyber-Fraud Whistleblowers
Whistleblowers typically are individuals who learn of fraud in the course of their employment. Their cases require their attorneys to prove a fraud occurred while also protecting their client from retaliation.
While many law firms have experience dealing with fraud cases or employment issues separately, few are experienced enough to handle both issues together. The lawyers at Keller Grover have over 30 years of experience litigating both fraud and employment matters, making Keller Grover uniquely qualified to represent whistleblowers.