What Is Cybersecurity Fraud Under the False Claims Act?
Not every cybersecurity failure is fraud. A genuine misconfiguration, an honest compliance gap, or a good-faith disagreement about a technical control does not create a False Claims Act case.
What does create a case is when a company knowingly misrepresents its cybersecurity posture to the federal government — and receives taxpayer money as a result. The False Claims Act (FCA) makes it unlawful to submit a false or fraudulent claim to the U.S. government. In the cybersecurity context, that fraud most often takes one of three forms:
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Certifying compliance without implementing the required controls — signing contracts that include DFARS, CMMC, or FedRAMP requirements and checking the box without actually meeting the underlying technical standards.
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Falsifying the SPRS Score — submitting an inflated Supplier Performance Risk System self-assessment to DoD to appear compliant and win or retain contracts.
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Concealing cyber incidents — failing to report breaches within the 72-hour window required by DFARS 252.204-7012, or not building the required reporting capability at all.
In October 2021, the Department of Justice launched the Civil Cyber-Fraud Initiative (CCFI), formally deploying the False Claims Act as its primary enforcement mechanism for cybersecurity fraud. The DOJ has since settled cases against Raytheon, Aerojet Rocketdyne, Penn State, and others — and it relies on qui tam whistleblowers as its main investigative channel.
Which frameworks create FCA exposure?
Do You Have a Cybersecurity Whistleblower Case?
Before calling an attorney, consider whether your situation contains the three core elements of an FCA cybersecurity claim: a false or fraudulent representation, made knowingly, that was material to the government's decision to pay.
Seven questions to ask yourself
- Does your employer hold federal contracts or receive federal funding from agencies like DoD, HHS, or DHS?
- Has your employer represented to the government that it meets specific cybersecurity requirements — in a contract, certification, or compliance submission?
- Do you have firsthand knowledge — not just suspicion — that those representations are false?
- Is the non-compliance knowing — did management understand the gap and choose to certify anyway, rather than fix it?
- Is your information original — is it drawn from your own direct experience, not already public or known to the government?
- Can you identify or describe documentation that supports your allegations — emails, audit reports, SPRS records, incident logs?
- Are you likely the first to file? The FCA pays only the first relator — if someone else files first on the same fraud, your recovery may be lost.
You may have the basis for a viable qui tam claim. The most important next step is a confidential consultation with a whistleblower attorney — not gathering more documents, not speaking to colleagues, not contacting the government on your own. Call (833) 310-3147.
How you obtain evidence matters. Accessing systems you are not authorized to use — even to document fraud — can expose you to liability under the Computer Fraud and Abuse Act (CFAA) and jeopardize your case. An attorney will guide you on how to preserve what you already have, legally.
How the Qui Tam Process Works
The False Claims Act qui tam process is unlike any other type of litigation. Understanding it in advance helps you set realistic expectations and make sound decisions at each stage.
Retain a whistleblower attorney — before anything else
Before you gather evidence, speak to colleagues, or contact any government agency — hire a qui tam attorney. The Whistleblower Advocates offers a free, completely confidential consultation with no obligation.
Investigation and complaint drafting
Your attorney works with you to understand the facts and draft a formal complaint detailing the fraud, the false certifications, and the resulting harm to the government.
Filing under seal
The complaint is filed in federal court under seal — confidential from the public and from the defendant. Only the court and the DOJ have access. This protects you and prevents the target from destroying evidence.
Government investigation (1–3 years)
The DOJ and relevant inspector general investigate. In cybersecurity cases, the government may engage technical experts. The seal period is extended as needed — often one to three years. This is normal.
Intervention decision
The DOJ decides whether to take over the case (intervene) or allow you to proceed independently. Most cases settle after a government intervention decision. The Whistleblower Advocates has specific experience litigating declined cases — a critical distinction most firms cannot match.
Settlement or litigation, then relator share payment
Most FCA cybersecurity cases resolve through settlement. Your relator share — 15–30% of the government's recovery — is paid after resolution. The defendant pays your attorneys' fees separately under the FCA.
How Much Can a Cybersecurity Whistleblower Receive?
Under the False Claims Act, a cybersecurity whistleblower who files a successful qui tam lawsuit is entitled to a statutory share of the government's recovery.
The government recovers treble damages — three times the actual loss — plus civil penalties of up to $27,894 per false claim. Each contract payment made while the contractor was falsely certifying compliance can be counted as a separate false claim.
What recent settlements look like in practice
False certification of DFARS and NASA cybersecurity requirements. One of the first CCFI settlements — established the enforcement template. Relator share: $1.35M–$2.25M.
Failed to implement required controls including a System Security Plan on DoD contracts. Whistleblower: a former Director of Engineering. Settled under DFARS 7012 and FAR 52.204-21.
Failed to implement cybersecurity controls in DoD research contracts and did not ensure subcontractor compliance — demonstrating universities face the same FCA exposure as defense primes.
The FCA pays only the first relator to file on a given fraud. If a colleague, former co-worker, or competitor files before you — even days before — you may lose your right to a share entirely. If you have been sitting on this information, the cost of waiting is potentially the entire recovery.
Whistleblower Protections: Retaliation, NDAs, and Clearances
Fear of retaliation is the most common reason people with valid cases do not come forward. Here is what the law actually provides.
FCA anti-retaliation — Section 3730(h)
The FCA's anti-retaliation provision protects employees, contractors, and agents who engage in protected activity — including investigating fraud, filing or helping to file a qui tam lawsuit, or testifying in an FCA proceeding. If your employer fires, demotes, or harasses you because of this activity, you are entitled to reinstatement, double back pay, and attorneys' fees. These remedies are separate from your relator share.
NDAs cannot prevent you from filing
Courts have consistently held that private non-disclosure agreements cannot override federal law. Your employer's NDA does not eliminate your right to file a qui tam lawsuit, cooperate with DOJ investigators, or testify in a government proceeding. Work through counsel rather than acting unilaterally — your attorney will manage the NDA question directly.
Security clearances
Filing a qui tam complaint under seal does not inherently trigger a security clearance review — the case is filed confidentially and the employer is not notified. If your employer learns of your filing and retaliates by challenging your clearance, you have legal remedies. The government's interest in protecting whistleblowers is aligned with protecting your clearance, not threatening it.
Can I file anonymously?
You can file through your attorney without your name appearing publicly. The complaint is sealed, and your identity is not disclosed to the defendant or the public during the investigation period. Many cases, particularly those that settle, allow relators to maintain a significant degree of privacy.