The Department of Justice recently announced the launch of its new Civil Cyber-Fraud Initiative (the “Initiative”) which intends to use the False Claims Act to pursue “cybersecurity-related fraud by government contractors and grant recipients.”
Specifically, the Initiative will target those who:
- knowingly provide deficient cybersecurity products or services,
- knowingly misrepresenting their cybersecurity practices or protocols, or
- knowingly violate obligations to monitor and report cybersecurity incidents and breaches.
This new initiative significantly expands the potential liability of federal contractors and healthcare provider that participate in federal healthcare programs related to data privacy and cybersecurity issues.
False Claims Act
The False Claims Act broadly prohibits anyone from, among other things, knowingly presenting, or “causing to be presented” a false claim for payment if the claim will be paid directly or indirectly by the federal government. The False Claims Act is the government’s main enforcement tool for fighting healthcare fraud, with over $2.2 billion recovered in 2020. Penalties for False Claims Act violations include three times the actual damages sustained by the government, mandatory civil penalties of between $11,181 and $22,363 for each separate false claim, and attorneys’ fees and costs. Further, the False Claims Act allows whistleblowers to bring lawsuits on behalf of the federal government. Also known as a “qui tam” realtor, a...
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