Federal Program Fraud Prevention and Accountability Act of 2025

This Act combats fraud in federal programs by strengthening existing oversight without expanding federal power beyond Article I, Section 8. It requires each federal agency administering a program with annual outlays over $100 million to establish an internal fraud prevention unit, funded by reallocating 0.5% of the agency's administrative budget. These units shall coordinate with the Government Accountability Office (GAO) to identify and report fraud indicators, but may not share personally identifiable information without a warrant or specific statutory exception under the Privacy Act of 1974. Penalties for fraud against federal programs are increased: for fraud exceeding $10,000, the maximum fine is raised to $500,000 or twice the gain, whichever is greater, and imprisonment up to 10 years. For fraud under $10,000, fines are capped at $50,000 or the loss amount, whichever is less, to avoid Eighth Amendment concerns. All penalties apply only to direct federal programs, not to state-administered block grants, respecting the Tenth Amendment. A new Office of Program Integrity within the Department of Justice is created to prosecute fraud cases referred by agency units, with a budget of $50 million per year from existing DOJ appropriations. The office must report annually to Congress on cases filed, recoveries, and constitutional compliance. This Act sunsets after 5 years, unless reauthorized by Congress with a review of its effectiveness and constitutional impact. Enforcement is through existing federal courts, with the Attorney General authorized to bring civil actions for injunctive relief or damages. No new data-sharing agreements are authorized without explicit congressional approval, preserving Fourth Amendment protections.