The United States has announced the formation of a new unit that will crack down on federally-funded universities that have diversity, equity and inclusion policies using a civil anti-fraud law, the Justice Department said in a memo.

The creation of the "Civil Rights Fraud Initiative" marks the latest escalation by the administration of President Donald Trump against colleges and universities that it has claimed are pushing antisemitic, anti-American, Marxist and "radical left" ideologies.

"A university that accepts federal funds could violate the False Claims Act when it encourages antisemitism, refuses to protect Jewish students, allows men to intrude into women's bathrooms or requires women to compete against men in athletic competitions," Deputy Attorney Todd Blanche wrote in the memo.

"Colleges and universities cannot accept federal funds while discriminating against their students."

The False Claims Act is a federal civil law that allows the government to recover funds lost due to fraud. Private citizens can also use it to sue on the government's behalf and can become eligible to receive a portion of the recovered proceeds.

Last week, the New York Times reported that the Trump administration had launched a False Claims Act inquiry into whether Harvard's admission policies comply with a Supreme Court ruling that ended affirmative action.

Harvard is currently suing the government, after the Trump administration cancelled its federal grants in what the university alleges is a bid to "coerce and control" it.

In a statement on the False Claims Act inquiry, a Harvard spokesperson said the school is committed to following the law.

The investigation represents "yet another abusive and retaliatory action – the latest of many – that the administration has initiated against Harvard since the university was forced to defend itself from harmful overreach against higher education," the university said.

In the memo on Monday, Blanche said the new fraud initiative will be co-led by the Civil Division's Fraud Section and the Civil Rights Division.

He added that each division would assign a team of attorneys to "aggressively pursue" this work. He also said that each of the country's 93 US Attorneys' offices will be required to tap a prosecutor to contribute to the effort. (Reuters)