{"id":57235,"date":"2021-10-22T16:42:04","date_gmt":"2021-10-22T16:42:04","guid":{"rendered":"https:\/\/www.dinsmore.com\/?post_type=publications&#038;p=57235"},"modified":"2025-11-24T20:56:49","modified_gmt":"2025-11-24T20:56:49","slug":"doj-signals-intent-to-hold-government-contractors-accountable-for-lax-cybersecurity-standards","status":"publish","type":"publications","link":"https:\/\/www.dinsmore.com\/publications\/doj-signals-intent-to-hold-government-contractors-accountable-for-lax-cybersecurity-standards\/","title":{"rendered":"DOJ Signals Intent to Hold Government Contractors Accountable for Lax Cybersecurity Standards"},"content":{"rendered":"\n<figure class=\"wp-block-image\"><img decoding=\"async\" src=\"https:\/\/www.dinsmore.com\/wp-content\/uploads\/2021\/10\/Cybersecurity-Banner.jpg\" alt=\"\"\/><\/figure>\n\n\n\n<p>It is imperative that companies with government contracts, or those receiving federal grant funding, ensure that they have adequate cybersecurity protocols in place. The announcement by the Department of Justice (DOJ) of the Cyber Fraud Initiative strongly signals its intent to be aggressive in holding government contractors with lax cybersecurity standards and controls accountable. Further, the announcement of the initiative will undoubtedly lead to more qui tam lawsuits filed by private actors seeking to share in any monetary recovery for reporting deficient cybersecurity practices or data breaches. Failing to implement robust cybersecurity measures that are in compliance with federal requirements could result in significant monetary penalties and litigation costs for companies. Additionally, knowingly providing false information to the government could lead to criminal prosecution and fines.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<\/p>\n\n\n\n<p>Recently, the Department of Justice (DOJ) announced the creation of two new enforcement programs to combat cyber fraud. On Oct. 6, 2021, the DOJ unveiled a new Civil Cyber Fraud Initiative (the Cyber Fraud Initiative) aimed at using civil enforcement actions under the False Claims Act (FCA) to \u201ccombat new and emerging cyber threats to the security of sensitive information and critical systems.\u201d<a href=\"#_ftn1\" id=\"_ftnref1\">[1]<\/a><\/p>\n\n\n\n<p>The FCA, first enacted during the Civil War to combat fraud by contractors supplying the military, awards damages and levies penalties against parties who make false claims to the government in connection with obtaining federal funds and property through government programs. The Cyber Fraud Initiative will now hold accountable companies that are government contractors and\/or federal grant recipients and that fail to report data breaches or to follow required security standards.<a href=\"#_ftn2\" id=\"_ftnref2\">[2]<\/a><\/p>\n\n\n\n<p>Deputy Attorney General Lisa Monaco warned of \u201cvery hefty fines\u201d for such companies and emphasized the DOJ\u2019s commitment to protecting whistleblowers who bring those violations and failures forward<a href=\"#_ftn3\" id=\"_ftnref3\">[3]<\/a>. She noted, \u201cFor too long, companies have chosen silence under the mistaken belief that it is less risky to hide a breach than to bring it forward and to report it.\u201d<a href=\"#_ftn4\" id=\"_ftnref4\">[4]<\/a>&nbsp;&nbsp;&nbsp;<\/p>\n\n\n\n<p>The FCA also contains a whistleblower provision encouraging private citizens to report suspected misconduct and file suits on behalf of the government (called \u201c<em>qui tam<\/em>\u201d suits) against those who defraud it. The FCA has been described as \u201cone of the most important tools [the government has] to fight healthcare fraud, grant fraud, financial fraud, government-contracting fraud, and many other types of fraud on the taxpayer.\u201d<a href=\"#_ftn5\" id=\"_ftnref5\">[5]<\/a> Private citizens who file successful qui tam suits are eligible to receive a portion of the government\u2019s recovery.&nbsp;<\/p>\n\n\n\n<p>According to the DOJ, \u201cthe Cyber Fraud Initiative seeks to \u201chold accountable entities or individuals that put U.S. information or systems at risk by knowingly providing deficient cybersecurity products or services, knowingly misrepresenting their cybersecurity practices or protocols, or knowingly violating obligations to monitor and report cybersecurity incidents and breaches.\u201d<a href=\"#_ftn6\" id=\"_ftnref6\">[6]<\/a> In an effort to encourage companies to proactively report breaches, Deputy Attorney General Monaco expressed the DOJ\u2019s commitment to partnering and helping self-reporting companies.<a href=\"#_ftn7\" id=\"_ftnref7\">[7]<\/a> \u201cVictims can help avoid liability through working with law enforcement, and those companies that stand with us, and work with us, will see that we stand with them in the aftermath of an incident,\u201d she said.<a href=\"#_ftn8\" id=\"_ftnref8\">[8]<\/a> She further remarked, \u201cIf companies don\u2019t come forward in this threat environment . . . I think legitimate questions will be, and should be asked of companies, \u2018Why didn\u2019t you come forward and help prevent the next victim?\u201d<a href=\"#_ftn9\" id=\"_ftnref9\">[9]<\/a>&nbsp;&nbsp;&nbsp;&nbsp;<\/p>\n\n\n\n<p>On the same day, the DOJ announced the creation of a National Cryptocurrency Enforcement Team (the Crypto Team), designed to \u201ctackle complex investigations and prosecutions of criminal misuses of cryptocurrency,\u201d including acts of money laundering.<a href=\"#_ftn10\" id=\"_ftnref10\">[10]<\/a> The Crypto Team \u201cwill also assist in tracing and recovery of assets lost to fraud and extortion, including cryptocurrency payments to ransomware groups.\u201d<a href=\"#_ftn11\" id=\"_ftnref11\">[11]<\/a> Both the Cyber Fraud Initiative and the Crypto Team stem from the DOJ\u2019s review of its existing cyber capabilities with the goal of \u201cenhanc[ing] and expand[ing] the Justice Department\u2019s efforts against cyber threats.\u201d<a href=\"#_ftn12\" id=\"_ftnref12\">[12]<\/a>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<\/p>\n\n\n\n<p>The creation of the Cyber Fraud Initiative is consistent with the government\u2019s recent approach in using the FCA aggressively as a means to protect the country against cyber threats.&nbsp; Traditionally, \u201cthe [FCA] is used by government to tackle civil lawsuits over false claims made in relation to federal funds and property connected with government programs.\u201d<a href=\"#_ftn13\" id=\"_ftnref13\">[13]<\/a> In recent years, under both the Obama and Trump administrations, the government has successfully used the FCA in bringing cases against various professional industries and corporations, including military contractors, medical professionals, health care providers, and others for billing-related fraud and for submitting false claims.&nbsp;<\/p>\n\n\n\n<p>Notably, in a speech at the Federal Bar Association\u2019s Qui Tam Conference in February 2021, Acting Assistant Attorney General Brian M. Boyton outlined the Biden administration\u2019s intention to expand the use of the FCA into other areas, including COVID-19-related fraud, fraud targeting seniors, fraud surrounding electronic health records, telehealth, and opioids.<a href=\"#_ftn14\" id=\"_ftnref14\">[14]<\/a> In the speech, Boynton also previewed the government\u2019s use of the FCA to address cybersecurity, noting, \u201cIt is not difficult to image a situation where [FCA] liability may arise\u201d from a government contractor failing \u201cto comply with required security standards.\u201d<a href=\"#_ftn15\" id=\"_ftnref15\">[15]<\/a><\/p>\n\n\n\n<p>For specific questions about implementing strong cybersecurity standards and controls that comply with the law, or questions more generally about the FCA, government investigations, or cybersecurity, please contact the authors or your Dinsmore attorney.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<\/p>\n\n\n\n<hr class=\"wp-block-separator has-alpha-channel-opacity\"\/>\n\n\n\n<p><a href=\"#_ftnref1\" id=\"_ftn1\">[1]<\/a> U.S. DOJ, \u201cDeputy Attorney General Lisa O. Monaco Announces New Civil Cyber-Fraud Initiative,\u201d October 6, 2021, available at <a href=\"https:\/\/www.justice.gov\/opa\/pr\/deputy-attorney-general-lisa-o-monaco-announces-new-civil-cyber-fraud-initiative\">https:\/\/www.justice.gov\/opa\/pr\/deputy-attorney-general-lisa-o-monaco-announces-new-civil-cyber-fraud-initiative<\/a>.&nbsp;<\/p>\n\n\n\n<p><a href=\"#_ftnref2\" id=\"_ftn2\">[2]<\/a> <em>Id<\/em>.<\/p>\n\n\n\n<p><a href=\"#_ftnref3\" id=\"_ftn3\">[3]<\/a> Jason Miller, \u201cDoJ\u2019s new Civil Cyber-Fraud Initiative to hold contractors accountable for cybersecurity,\u201d Federal News Network, October 6, 2021, available at <a href=\"https:\/\/federalnewsnetwork.com\/contractsawards\/2021\/10\/dojs-new-civil-cyber-fraud-initiative-to-hold-contrators-accountable-for-cybersecurity\/\">https:\/\/federalnewsnetwork.com\/contractsawards\/2021\/10\/dojs-new-civil-cyber-fraud-initiative-to-hold-contrators-accountable-for-cybersecurity\/<\/a>.<\/p>\n\n\n\n<p><a href=\"#_ftnref4\" id=\"_ftn4\"><em><strong>[4]<\/strong><\/em><\/a><em> Id.<\/em><\/p>\n\n\n\n<p><a href=\"#_ftnref5\" id=\"_ftn5\">[5]<\/a> U.S. DOJ, \u201cActing Assistant Attorney General Brian M. Boynton Delivers Remarks at the Federal Bar Association Qui Tam Conference,\u201d February 17, 2021, available at <a href=\"https:\/\/www.justice.gov\/opa\/speech\/acting-assistant-attorney-general-brian-m-boynton-delivers-remarks-federal-bar\">https:\/\/www.justice.gov\/opa\/speech\/acting-assistant-attorney-general-brian-m-boynton-delivers-remarks-federal-bar<\/a>.<\/p>\n\n\n\n<p><a href=\"#_ftnref6\" id=\"_ftn6\">[6]<\/a> U.S. DOJ, \u201cDeputy Attorney General Lisa O. Monaco Announces New Civil Cyber-Fraud Initiative,\u201d October 6, 2021, available at <a href=\"http:\/\/www.justice.gov\/opa\/pr\/deputy-attorney-general-lisa-o-monaco-announces-new-civil-cyber-fraud-initiative\">www.justice.gov\/opa\/pr\/deputy-attorney-general-lisa-o-monaco-announces-new-civil-cyber-fraud-initiative<\/a>.&nbsp;&nbsp;<\/p>\n\n\n\n<p><a href=\"#_ftnref7\" id=\"_ftn7\">[7]<\/a> U.S. DOJ, \u201cDAG Monaco Speaks at Criminal Division Cybersecurity Roundtable on \u2018The Evolving Cyber Threat Landscape,\u2019\u201d October 20, 20201, available at https:\/\/www.justice.gov\/opa\/video\/deputy-attorney-general-lisa-o-monaco-delivers-opening-remarks-criminal-division-s.<\/p>\n\n\n\n<p><a href=\"#_ftnref8\" id=\"_ftn8\">[8]<\/a> <em>Id<\/em>.<\/p>\n\n\n\n<p><a href=\"#_ftnref9\" id=\"_ftn9\">[9]<\/a> <em>Id<\/em>.<\/p>\n\n\n\n<p><a href=\"#_ftnref10\" id=\"_ftn10\">[10]<\/a> U.S. DOJ, \u201cDeputy Attorney General Lisa O. Monaco Announces National Cryptocurrency Enforcement Team,\u201d October 6, 2021, available at <a href=\"http:\/\/www.justice.gov\/opa\/pr\/deputy-attorney-general-lisa-o-monaco-announces-national-cryptocurrency-enforcement-team\">www.justice.gov\/opa\/pr\/deputy-attorney-general-lisa-o-monaco-announces-national-cryptocurrency-enforcement-team<\/a>.<\/p>\n\n\n\n<p><a href=\"#_ftnref11\" id=\"_ftn11\">[11]<\/a> <em>Id<\/em>.<\/p>\n\n\n\n<p><a href=\"#_ftnref12\" id=\"_ftn12\">[12]<\/a> U.S. DOJ, \u201cDeputy Attorney General Lisa O. Monaco Announces New Civil Cyber-Fraud Initiative,\u201d October 6, 2021, available at <a href=\"http:\/\/www.justice.gov\/opa\/pr\/deputy-attorney-general-lisa-o-monaco-announces-new-civil-cyber-fraud-initiative\">www.justice.gov\/opa\/pr\/deputy-attorney-general-lisa-o-monaco-announces-new-civil-cyber-fraud-initiative<\/a>.&nbsp;<\/p>\n\n\n\n<p><a href=\"#_ftnref13\" id=\"_ftn13\">[13]<\/a> Ax Sharma, \u201cUS gov\u2019t will slap contractors with civil lawsuits for hiding breaches,\u201d Arts Technica, October 7, 2021, available at <a href=\"https:\/\/artstechnica.com\/information-technology\/2021\/10\/us-govt-will-slap-contractors-with-civil-lawsuits-for-hiding-breaches\/\">https:\/\/artstechnica.com\/information-technology\/2021\/10\/us-govt-will-slap-contractors-with-civil-lawsuits-for-hiding-breaches\/<\/a>.<\/p>\n\n\n\n<p><a href=\"#_ftnref14\" id=\"_ftn14\">[14]<\/a> U.S. DOJ, \u201cActing Assistant Attorney General Brian M. Boynton Delivers Remarks at the Federal Bar Association Qui Tam Conference,\u201d February 17, 2021, available at <a href=\"https:\/\/www.justice.gov\/opa\/speech\/acting-assistant-attorney-general-brian-m-boynton-delivers-remarks-federal-bar\">https:\/\/www.justice.gov\/opa\/speech\/acting-assistant-attorney-general-brian-m-boynton-delivers-remarks-federal-bar<\/a>.<\/p>\n\n\n\n<p><a href=\"#_ftnref15\" id=\"_ftn15\">[15]<\/a> <em>Id<\/em>.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>It is imperative that companies with government contracts, or those receiving federal grant funding, ensure that they have adequate cybersecurity protocols in place. The announcement by the Department of Justice (DOJ) of the Cyber Fraud Initiative strongly signals its intent to be aggressive in holding government contractors with lax cybersecurity standards and controls accountable. Further,\u2026<\/p>\n","protected":false},"author":8,"featured_media":0,"menu_order":0,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"tags":[],"publication-type":[8],"class_list":["post-57235","publications","type-publications","status-publish","format-standard","hentry","publication-type-articles"],"acf":[],"yoast_head":"<!-- This site is optimized with the Yoast SEO Premium plugin v26.5 (Yoast SEO v26.9) - https:\/\/yoast.com\/product\/yoast-seo-premium-wordpress\/ -->\n<title>DOJ Signals Intent to Hold Government Contractors Accountable for Lax Cybersecurity Standards - Dinsmore &amp; Shohl<\/title>\n<meta name=\"description\" content=\"DOJ Signals Intent to Hold Government Contractors Accountable for Lax Cybersecurity Standards Read insights and legal analysis from attorneys at Dinsmore &amp; Shohl LLP.\" \/>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.dinsmore.com\/publications\/doj-signals-intent-to-hold-government-contractors-accountable-for-lax-cybersecurity-standards\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"DOJ Signals Intent to Hold Government Contractors Accountable for Lax Cybersecurity Standards\" \/>\n<meta property=\"og:description\" content=\"DOJ Signals Intent to Hold Government Contractors Accountable for Lax Cybersecurity Standards Read insights and legal analysis from attorneys at Dinsmore &amp; 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