On May 19, 2025, the Department of Justice announced the establishment of a Civil Rights Fraud Initiative, created to enforce the False Claims Act (FCA) “against those who defraud the United States by taking its money while knowingly violating civil rights laws.”
The memorandum issued by Deputy Attorney General Todd Blanche is the latest effort by the administration to enforce its discrimination and diversity, equity, and inclusion (DEI) policies against colleges and universities.
What is the False Claims Act?
The FCA is a widely used civil tool by the government and private individuals to combat fraud against federal programs and contracts. The civil federal statute allows the government to sue entities who, in essence, knowingly submit false information to the government in order to receive funds, such as a grant or loan. Liability under the FCA turns on the subjective knowledge of the defendant at the time of submitting the false claim.
The pursuit of false claims is not limited to the government. Private individuals (known as whistleblowers or relators) are encouraged to file lawsuits under the FCA in what are known as qui tam suits. Qui tam suits are most often brought by an employee of the company or institution committing the fraud; however, they may be brought by anyone. When a qui tam suit is filed, it remains under seal while the government investigates and determines whether to join the lawsuit. In the event of a settlement or court judgment, the whistleblower receives a percentage of any recovery. In fiscal year 2024, there were 979 qui tam suits, the highest in any single year since the enactment of the FCA.
Liability under the FCA results in treble damages (punitive damages three times the amount of compensatory damages) and significant penalties. In fiscal year 2024, FCA settlements and judgments exceeded $2.9 billion.
The FCA has been used against institutions of higher education in the past, but very infrequently. For example, in 2009, the University of Phoenix settled a $67.5 million FCA lawsuit for the misuse of federal student financial aid. In 2019, a South Carolina university paid $2.5 million to settle a FCA lawsuit. Both instances involved university admissions counselors or recruiters receiving incentive payments in exchange for enrolling students, which violates Title IV of the Higher Education Act (HEA).
DOJ Civil Rights Fraud Initiative
Although this DOJ effort appears to be targeting antisemitism, the FCA is a tool that the administration could wield more broadly to push institutions of higher education to adopt certain policies and to eliminate others.
For example, the memorandum provides specific examples of discrimination against students that could serve as the basis for violating the FCA, including encouraging antisemitism and refusing to protect Jewish students. But it also targets policies that allow “men to intrude into women’s bathrooms” and require “women to compete against men in athletic competitions.”
This initiative also comes on the heels of several executive orders, DOJ memos, and a Department of Education (DOE) letter to sixty institutions of higher education warning of potential enforcement actions if “institutions do not fulfill their obligations under Title VI of the Civil Rights Act to protect Jewish students on campus.”
The Civil Rights Fraud Initiative will be co-led by the Civil Division’s Fraud Section and the Civil Rights Division. These divisions will also engage with the Criminal Division, the Department of Education, the Department of Health and Human Services, the Department of Housing and Urban Development, and the Department of Labor. Additionally, each U.S. Attorney’s Office will select an assistant U.S. attorney as the Civil Rights Fraud Initiative primary contact, and partnerships will be established with state and local law enforcement to coordinate efforts.
Considerations for Institutions of Higher Education
The Civil Rights Fraud Initiative is groundbreaking in its attempts to apply the FCA in the higher-education context. In particular:
- Colleges and university communities offer a notably large universe of potential relators. Universities could, therefore, find themselves facing FCA litigation from students or other community members for the first time.
- Colleges and universities may be perceived to have violated the FCA if the government, students, staff, or faculty view a speaker, event, or response to campus conduct as encouraging antisemitism or as a refusal to protect Jewish students. Institutions of higher education may want to review disciplinary procedures, campus speaker policies, and other university mechanisms for organizing student involvement and engagement on campus.
- The new application of the FCA centers on antisemitism and alleged discrimination in the form of DEI policies. This lends itself to a highly subjective, rapidly evolving landscape, wholly unlike the traditional bases for a False Claims Act litigation: objectively proven false representations. This novel theory raises a number of questions as to the enforceability of the FCA when litigating against colleges and universities alleged to have engaged in discrimination.
- Schools should evaluate their DEI programs, policies, and initiatives, including publications and materials, in consultation with counsel. DOJ’s memorandum is just the latest to warn that, in its view, the FCA is implicated when federal-funding recipients engage in DEI programs that “assign benefits or burdens on race, ethnicity, or national origin.”
- While institutions of higher education should be cognizant of the potential for costly FCA litigation, it is far from clear at this stage that the FCA can be applied in the manner urged by the administration. Prior to responding to any DOJ or government inquiries, universities should consult with experienced counsel.
