Why the False Claims Act Just Got a Lot More Teeth

The False Claims Act has been one of the federal government's most powerful legal tools for decades. It has recovered billions of dollars from healthcare providers, defense contractors, nonprofits, and businesses of every size. Last year alone, False Claims Act settlements and judgments hit a record $6.8 billion, the highest single-year total in the law's history.

Then came the executive order.

On March 16, 2026, President Trump signed the order establishing the Task Force to Eliminate Fraud. Buried inside that order is a specific directive to the Department of Justice to:

• promote False Claims Act cases
• fast-track whistleblower complaints
• and push agencies across the federal government to refer fraud for civil and criminal enforcement.

The False Claims Act did not need new legislation to become more powerful. It just needed more people pulling the trigger. That is exactly what this executive order provides.

If your organization receives federal funding, bills a federal healthcare program, or has ever certified compliance with a federal program requirement, you need to understand what just changed and why it matters to you right now.

What the False Claims Act Actually Does

The False Claims Act is a federal civil and criminal statute that imposes liability on any individual or organization that submits a false or fraudulent claim for federal funds. It has been on the books since the Civil War, originally passed to combat fraud by military contractors. Over the past thirty years it has become the government's go-to tool across nearly every sector that touches federal money.

The law covers a wide range of conduct. Here is what typically triggers a False Claims Act case:

• Billing for services never provided: Submitting claims to Medicare, Medicaid, or any federal program for work, services, or goods that were never actually delivered
• Overbilling: Charging the government more than the actual cost or value of services provided
• Upcoding: Billing for a more expensive service or procedure than the one that actually took place
• False certifications: Signing off on compliance with program requirements that were not actually met
• Misrepresenting eligibility: Certifying that a person, organization, or program qualifies for federal funding when it does not
• Inflated grant claims: Reporting inflated costs or fabricated expenses in connection with a federal grant or contract

The penalties are severe. Each individual false claim carries a civil penalty that currently exceeds $27,000. On top of that, the government can recover three times the actual damages it claims it suffered. In cases involving repeated transactions over months or years, those figures stack up fast. A nonprofit that submitted inaccurate reimbursement claims across two years of program operation is not looking at a single penalty. It is looking at potentially hundreds of individual violations, each carrying its own penalty, plus treble damages on top.

That is the civil side. The conduct that triggers False Claims Act liability frequently also violates federal criminal fraud statutes. The DOJ has a long history of running civil and criminal investigations at the same time. A case that begins as a civil False Claims Act matter can become a federal criminal prosecution before it is over.

What the 2025 Numbers Tell Us

Before the executive order existed, False Claims Act enforcement was already at an all-time high.

The DOJ reported that False Claims Act settlements and judgments reached $6.8 billion in fiscal year 2025. That is a 136 percent increase over fiscal year 2024. Whistleblower qui tam filings, which are cases brought by private individuals on the government's behalf, hit a record 1,297 in 2025. The prior record had been set just the year before.

Healthcare fraud accounted for more than $5.7 billion of the total 2025 recoveries. That is more than 83 percent of all False Claims Act money recovered in a single year, driven largely by Medicare and Medicaid enforcement. The DOJ also expanded False Claims Act enforcement into new areas in 2025, including pandemic relief programs, cybersecurity compliance, and trade and customs fraud.

The trajectory was already steep. Then the executive order arrived and pointed more resources, more agencies, and more pressure directly at the law.

What the Executive Order Changed

The executive order establishing the Task Force to Eliminate Fraud does not rewrite the False Claims Act. It does something more immediate. It directs the DOJ to actively promote False Claims Act cases, including those brought by private whistleblowers, and to ensure prompt review of those actions within the 60-day period the statute contemplates. The order even cites the specific False Claims Act provision by statute number, 31 U.S.C. 3730, directly in the text.

That is significant for three reasons.

Reason 1: Whistleblower cases are being fast-tracked. The qui tam provision of the False Claims Act allows private individuals to file suit on the government's behalf and collect a percentage of any recovery, typically between 15 and 30 percent. These cases were already being filed at record rates in 2025. The executive order tells the DOJ to move them faster. Cases that might have sat in review for months are now being prioritized.

Reason 2: Multiple agencies are now coordinating. Before the task force, a Medicare fraud investigation might involve HHS and the DOJ but little else. Now the task force pulls together Treasury, HHS, HUD, DHS, the Small Business Administration, and more, all sharing data and referring cases to each other. A pattern that one agency flags gets seen by all of them. That dramatically increases the chance that conduct which might have gone unnoticed under one agency's review gets picked up somewhere else.

Reason 3: New York is explicitly named as a target state. The executive order specifically identifies New York as one of the states where vulnerabilities in federal program administration exist. That is not background noise. It is a direct signal that federal investigators are looking at how New York-based organizations have administered federal programs, and that cases originating here will receive attention.

Who Is Most at Risk Right Now

The enforcement focus is not random. Based on what has already played out in Minnesota, California, and across DOJ's 2025 enforcement activity, certain categories of organizations face the highest immediate exposure.

• Medicaid-funded service providers are at the top of the list. Home care agencies, housing stabilization services, behavioral health providers, and autism therapy programs have all faced federal charges in recent months. The core allegation in almost every case is the same: billing for services that were never delivered. Investigators are pulling billing records, cross-referencing them against enrollment data, and identifying providers whose claim volumes do not match their documented capacity.
• Federally funded nonprofits are facing a level of scrutiny that most of them have never experienced. The Feeding Our Future case in Minnesota, in which more than 90 individuals were charged in connection with approximately $250 million in alleged fraud involving a federal child nutrition program, demonstrated exactly how fast a nonprofit fraud case can scale. Organizations that administered pandemic-era nutrition, childcare, or housing programs are under active review in multiple states.
• Healthcare providers billing Medicare are seeing a concentrated push in California, where federal investigators have publicly announced an audit of hospice care programs, billing practices, and informed consent procedures. CMS and DOJ held a joint press conference in January 2026 to announce the scope of their California healthcare fraud investigations, which is not standard procedure and signals how serious the enforcement push is.
• COVID relief recipients who received PPP loans, EIDL grants, or pandemic-era unemployment insurance payments are still generating new federal charges in 2026. The statute of limitations on many of these cases has not expired. Investigators are still working through the data.

Businesses and contractors that certified eligibility for federal programs face exposure whenever those certifications were inaccurate, even if the inaccuracy was not intentional. Reckless disregard for the truth is enough under the False Claims Act. Organizations that signed certifications without verifying the underlying facts are vulnerable.

The Whistleblower Problem

This is the piece that catches most organizations completely off guard.

You do not have to be under a government investigation for a False Claims Act case to begin against you. A former employee who believes your billing practices were inaccurate can file a qui tam lawsuit without your knowledge. A competitor who believes your organization misrepresented its qualifications for a federal grant can bring a case. A vendor, a contractor, a program participant, anyone with firsthand knowledge of how your organization handled federal funds has both the legal standing and a direct financial incentive to report you.

The case is filed under seal, meaning you may not know about it for months while the government investigates and decides whether to intervene. By the time the seal is lifted and you are notified, the government has often already reviewed your records, interviewed witnesses, and formed a view of the case.

The executive order is designed to accelerate exactly this process. Record qui tam filings in 2025 are about to be followed by faster government review and more aggressive intervention decisions in 2026.

What to Do If You Think You Have Exposure

The worst time to evaluate your organization's False Claims Act exposure is after you receive a civil investigative demand or a knock on the door from federal agents. By that point, the government has already built a significant portion of its case.

The right time is now. Any organization that has received federal funding, billed a federal healthcare program, or administered a federally backed program should be asking hard questions about whether its documentation, billing practices, and program certifications can withstand federal scrutiny. Not comfortable scrutiny. Adversarial scrutiny, from investigators who are specifically tasked with finding problems.

If the answer to any of those questions is uncertain, that uncertainty is itself a warning sign.

Our federal criminal defense attorneys in New York represent businesses, nonprofits, and healthcare providers facing False Claims Act investigations and federal fraud charges at every stage of the process. We represent the people and organizations on the other side of these cases, and we know how the government builds them. Early intervention matters more in False Claims Act cases than in almost any other area of federal enforcement. The decisions made before charges are filed often determine whether charges are filed at all.

When You Need a False Claims Act Defense Attorney in New York

Some situations call for immediate legal counsel. Others require it before a situation even develops fully. Here is a straightforward guide to when contacting a federal criminal defense attorney in New York is not optional.

• You received a civil investigative demand. This is the False Claims Act equivalent of a grand jury subpoena. It is a formal legal demand for documents, written responses, or testimony. Receiving one means the government already believes it has reason to investigate your organization. Do not respond without a federal criminal defense attorney present.
• Federal agents contacted you or someone at your organization. An FBI agent, an HHS Office of Inspector General investigator, or any other federal agent asking to speak with you or your staff is not a routine inquiry. Every word said in that conversation is documented. Say nothing until you have counsel.
• A former employee left under difficult circumstances. Disgruntled former employees are among the most common sources of qui tam whistleblower complaints. If someone left your organization with knowledge of your billing practices, grant certifications, or program documentation, and the departure was contentious, the risk of a qui tam filing is real and immediate.
• Your organization administered a federal program during or after the pandemic. PPP loans, EIDL grants, Medicaid-funded services, federal childcare funding, and nutrition programs are all under active review. If your organization participated in any of these programs, the question is not whether investigators might look at your records. It is whether your records are ready to be looked at.
• You are in a high-scrutiny industry. Healthcare providers, home care agencies, hospice operators, housing services providers, and behavioral health organizations are facing the most concentrated False Claims Act enforcement activity in the law's history. If you operate in one of these sectors and bill any federal program, you have exposure worth evaluating now.
• You are not sure whether you have a problem. That uncertainty is reason enough. A federal criminal defense attorney in New York can review your organization's situation confidentially and give you an honest assessment of where your risk actually stands. The cost of that conversation is nothing compared to the cost of finding out you had a problem after the government already knew about it.

Contact Varghese & Associates

If you believe your organization may have False Claims Act exposure, or if you have already received a civil investigative demand, a federal subpoena, or any contact from federal investigators, call Varghese & Associates now. Our federal criminal defense attorneys in New York are ready to review your situation and stand between you and the full weight of federal enforcement before this becomes a crisis you cannot contain.

Sources

The False Claims Act, 31 U.S.C. 3729 et seq. — justice.gov

Executive Order: Establishing the Task Force to Eliminate Fraud (March 16, 2026) — whitehouse.gov

White House Fact Sheet: Establishing the Task Force to Eliminate Fraud (March 16, 2026) — whitehouse.gov

White House Fact Sheet: New Department of Justice Division for National Fraud Enforcement (January 8, 2026) — whitehouse.gov