Entries by Kristin Graham Koehler

23 06 '26

DOJ Reaches $507,144 Settlement with Defense Contractor, Signals Increased FCA Scrutiny of Cybersecurity Self-Assessments

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On June 18, 2026, DOJ announced a settlement with LOGZONE Inc., a defense contractor, to pay $507,144 to resolve allegations that it violated the False Claims Act through its failure to satisfy cybersecurity requirements in its contracts with the Department of the Navy (“the Navy”). This settlement involves yet another coordinated enforcement effort through the recently created Task Force to Eliminate Fraud, previously reported on here and here. DOJ reached this settlement with assistance from the Department of the Navy, the Department of the Army, and the Defense Contract Management Agency (“DCMA”). This settlement underscores cybersecurity compliance as a focus of FCA enforcement.

16 06 '26

Challenging Executive Order on DEI, States Say It Gets FCA Materiality Wrong

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On June 10, 2026, nineteen states and the District of Columbia filed suit challenging President Trump’s Executive Order No. 14398, which seeks to eliminate diversity, equity, and inclusion (DEI) initiatives among federal contractors and expressly links DEI-related conduct to potential False Claims Act (FCA) liability. The lawsuit, brought under the Administrative Procedure Act, targets the Order’s anti-DEI contracting provisions and the federal government’s efforts to implement them.

The states argue that the Executive Order’s attempt to designate compliance with its anti-DEI requirements as “material” to government payment decisions conflicts with the Supreme Court’s FCA materiality standard articulated in Universal Health Services v. Escobar. The complaint also challenges the Order on broader administrative law grounds, arguing that key terms are impermissibly vague and that agencies have failed to justify the Order’s underlying policy assumptions.

Read the full post for a closer look at the states’ materiality arguments and the potential implications for federal contractors facing increased FCA scrutiny of DEI-related practices.

10 06 '26

DOJ’s Civil Rights Fraud Initiative Raises False Claims Act Risks for Healthcare and Life Sciences Companies

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In a Reuters article, Sidley partners Jaime Jones, Kristin Graham Koehler and Boyd Greene examine how the U.S. Department of Justice’s Civil Rights Fraud Initiative could create new False Claims Act (FCA) exposure for healthcare and life sciences companies that receive federal funding or contract with the federal government. The initiative seeks to use the FCA to pursue organizations that allegedly violate federal civil rights laws while certifying compliance with contractual, grant or funding requirements.

28 05 '26

DOJ Announces Accelerated Review of FCA Qui Tams Alleging Fraud Against State-Administered Benefits Programs

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It is not business as usual at DOJ.  In the latest announcement related to the Department’s efforts to fight alleged fraud, on May 27, 2026, Assistant Attorney General Brett Shumate issued a memorandum directing DOJ’s Civil Division and U.S. Attorneys’ Offices to accelerate the review of qui tams alleging fraud against federally funded state-administered benefits programs, including programs involving housing, food assistance, medical care, and cash assistance.   The memorandum, titled “Accelerating Review and Enhancing Enforcement in Benefits Fraud Matters,” implements President Trump’s March 2026 Executive Order establishing the “Task Force to Eliminate Fraud,” which we reported on here, and which directed the Department to take appropriate action to promote “meritorious” qui tams and to complete investigations sooner, including within the 60-day statutory period.

18 05 '26

Tariff Enforcement at the Forefront: Importer Agrees to Pay $549.5 million in Largest-Ever Trade-Related False Claims Act Settlement

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On May 12, 2026, the Department of Justice (“DOJ”) announced a $549.5 million settlement with Perfectus Aluminum Acquisitions LLC and four affiliated companies to resolve allegations that they violated the False Claims Act (“FCA”) by evading customs duties. This settlement is the largest trade-related settlement under the FCA.

The action was initiated by qui tam cases brought by individuals who worked for U.S.-based competitors and the Aluminum Extrusion Counsel and ultimately coordinated through the DOJ’s Trade Fraud Task Force, which involved cooperation between DOJ and the Department of Homeland Security. This case highlights the increasing use of the FCA to hold importers liable for the underpayment of customs duties, the Administration’s commitment to enforcing U.S. customs laws, and the potential for competitors and former employees to harness the FCA to motivate federal investigations into allegations of trade fraud.

This post examines the settlement and discusses its implications for importers, manufacturers, and other companies facing customs and trade enforcement risk.

01 05 '26

New Guidance on U.S. Procurement Raises Risk to Federal Contractors From Potentially Discriminatory Practices

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 The Trump Administration is advancing a coordinated effort to tie federal funding and contracting eligibility more closely to its interpretation of antidiscrimination law. Recent Federal Acquisition Regulation (FAR) guidance directs agencies to incorporate a new contract clause prohibiting practices the Administration deems discriminatory, while proposed revisions to System for Award Management (SAM) certifications would require recipients of federal grants and other financial assistance to affirm compliance with similar standards. These developments build on earlier Department of Justice guidance outlining the types of conduct the Administration views as unlawful and are reinforced by a recent False Claims Act (FCA) settlement signaling a willingness to pursue enforcement in this area. Together, the FAR changes and proposed SAM revisions point to a more integrated enforcement framework—one that expands certification and disclosure obligations, links compliance more directly to FCA materiality, and increases oversight and reporting expectations. For federal contractors and grant recipients, the result is a heightened risk environment requiring careful reassessment of policies, internal controls, and subcontractor compliance in anticipation of greater scrutiny from both contracting agencies and enforcement authorities.