The Department has various civil tools to pursue fraud. Civil statutory remedies for fraud against the government include the False Claims Act, as amended, 31 U.S.C. § 3729 et seq., the Anti-Kickback Enforcement Act, as amended, 41 U.S.C. §§ 51 to 58, 42 U.S.C. § 5157 (misapplication of disaster relief funds), 12 U.S.C. § 1715z-4a(a) to (e) (violation of HUD Multifamily regulatory Agreement), and section 5 of the Contract Disputes Act, 41 U.S.C. § 604. Common law actions for fraud, money paid under mistake, unjust enrichment, conversion, and/or breach of contract also may be available.

The Fraud Section of the Commercial Litigation Branch has expertise in civil fraud litigation and maintains internal guidance on the government’s use of civil fraud remedies. The USAOs’ authority with respect to issuing civil investigative demands and compromising or closing qui tam cases is set forth in 28 C.F.R. Part 0, Subpart Y and Appendix.

The False Claims Act allows private parties to file complaints on behalf of the United States. These are referred to as “qui tam” or “whistleblower” suits. The Act requires that the qui tam complaint be served on the Attorney General and the United States Attorney for the district in which the complaint has been filed. Immediately after a qui tam complaint is received, attorneys from the USAO and the Fraud Section should confer to ensure that both offices have received the complaint and to decide how the case will be handled. Attorneys from the USAO and the Fraud Section also should confer immediately about any appeal in a False Claims Act case, even where the United States has not intervened in the case.

In any False Claims Act matter, the USAO or Fraud Section attorneys will confer with the relevant agency during the investigative, litigation, and settlement phases of the matter. The Department’s attorneys will solicit the agency’s views on the False Claims Act matter, including, for example, on the falsity and materiality aspects of any alleged violations of the relevant agency requirements, in order to assist the Department in determining whether the elements of the False Claims Act can be established. In a qui tam action, if the agency does not support the whistleblower’s pursuit of the matter, the agency may recommend that the Department seek dismissal of the case. See Department of Justice Manual, § 4-4.111. While the decision whether to seek dismissal remains the exclusive authority of the Department, the Department will consult with the agency in making such a decision. These principles apply to all False Claims Act matters.[1]

The Department also has the authority to pursue civil remedies for fraud in the importation process, under 19 U.S.C. § 1592. That provision allows the United States to seek civil remedies in the Court of International Trade against anyone who fraudulently enters or attempts to enter merchandise into the commerce of the United States. The National Courts Section of the Commercial Litigation Branch has expertise in and responsibility for remedying fraud under this statute, and should be consulted with respect to any fraud matter that may involve international trade to determine whether this civil remedy is available.

Civil remedies against fraud should be vigorously enforced. Expeditious enforcement of civil remedies should be undertaken to make the government whole, if possible, and to provide a strong deterrent to fraudulent conduct in similar circumstances. Such enforcement is important to the promotion of the highest ethical standards among those who have dealings with the government or who are employed by it. Flagrant frauds, justifying the initiation of suits for multiple damages and penalties generally, should not be compromised for less than multiple damages. Criminal and civil fraud investigations by the FBI and other investigative agencies should be carried out concurrently, including investigations as to the extent of the government's damage. Criminal, civil, regulatory and administrative proceedings involving fraud should be coordinated to the fullest extent possible in accordance with JM 1-12.000, with care taken to utilize grand jury materials only as permitted by law.

[1] In the context of False Claims Act enforcement pertaining to Federal Housing Administration single-family mortgage insurance programs, the Department of Justice and the Department of Housing and Urban Development have a Memorandum of Understanding dated [October 21, 2019] (“MOU”) that reflects the coordination principles above, but also contains significant administrative provisions specific to FHA programs.

[updated December 2019]