DOJ Announces Civil CyberFraud Initiative to Use False Claims Act to Enforce Cybersecurity Standards in Government Contracts

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On October 6, the Deputy Attorney General (“DAG”) announced a new Department of Justice (“DOJ”) Civil Cyber-Fraud Initiative – an effort that pulls together attorneys and experts across DOJ focused on fraud enforcement, government procurement, and cybersecurity “to combat new and emerging cyber threats to the security of sensitive information and critical systems”. The Cyber-Fraud Initiative is the direct product of a larger ongoing DOJ review to address grave cyber threats in the wake of unprecedented ransomware attacks and digital supply chain compromises. DOJ outlined both punitive and preventative goals in launching the initiative. For example, it intends to use the False Claims Act (“FCA”) to motivate companies and contractors to comply with cybersecurity standards. Specifically, DOJ will be actively pursuing FCA actions against government contractors that “hide a breach” rather than “bring it forward and [] report it.” Additionally, any company that “knowingly provid[es] deficient cybersecurity products or services [or] knowingly misrepresent[s] their cybersecurity practices or protocols” will be subject to civil action. As the DAG explained, “Where those who are entrusted with government dollars, who are entrusted to work on sensitive government systems, fail to follow required cybersecurity standards, we’re going to go after that behavior and extract very hefty, very hefty fines.”

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