The Department of Justice recently announced the launch of a Civil Cyber-Fraud Initiative, which has direct implications for government contractors and serves as a warning that slack cybersecurity practices will be a target of Government enforcement action. It is important for companies to understand their cybersecurity requirements and implement appropriate compliance measures to reduce the risk of DOJ action.
What is the DOJ’s Civil Cyber-Fraud Initiative?
On October 6, 2021, the Department of Justice announced that the Cyber-Fraud Initiative will be led by the Fraud Section of the Civil Division’s Commercial Litigation Branch and primarily utilize the False Claims Act to pursue cybersecurity-related fraud by government contractors and grant recipients. The aim is to hold entities and individuals accountable that put U.S. information or systems at risk by knowingly violating obligations to monitor or report cybersecurity incidents and breaches, misrepresent their cybersecurity practices, or provide deficient cybersecurity products or services.
On the surface, this Initiative doesn’t sound like anything new; the DOJ intends to use an already-existing statute (the FCA) to enforce unchanged contractual obligations for defense contractors by relying on longstanding whistleblower reporting mechanisms. So what’s the intended message?
Here, context is everything. The DOJ Cyber-Fraud Initiative coincides with the Biden Administration’s May 2021 Executive Order aimed at...
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