New Bill Taps Fraud Settlements to Boost Crime Victims Fund, But It’s Only Temporary

If you’ve ever wondered how the government pays for things like victim counseling, emergency shelter, or compensation for crime victims, the money often comes from the Crime Victims Fund (CVF). This fund is supposed to be financed by fines and penalties paid by convicted federal offenders, not taxpayer dollars. The problem is, the CVF has been running low.

The Crime Victims Fund Stabilization Act of 2025 is designed to shore up the fund by changing where it can get its cash. Essentially, it opens two new doors for money to flow in, and both involve tapping funds generated outside of standard criminal convictions. This is policy designed to keep the lights on for vital services, but it comes with a few interesting caveats that affect everyone from whistleblowers to the U.S. Treasury itself.

The New Money Pipeline: Civil Settlements

The first big change is that the CVF can now receive money from legal settlements or dispositions that don't result in a criminal conviction. Think of it this way: historically, if a company or individual paid a fine as part of a plea deal or conviction, that money could go to the CVF. Now, if a prosecutor decides not to pursue a criminal case but still reaches a final settlement or non-prosecution agreement that includes a financial penalty, that money is eligible for the CVF (SEC. 2).

This is a smart move for victim services because it acknowledges the growing trend of high-stakes cases being resolved through civil settlements rather than lengthy criminal trials. It means more money from corporate misconduct could be funneled directly to those who need help after a crime. The tricky part is the language is pretty broad—it doesn't specify which non-conviction dispositions qualify. This vagueness could lead to debates over which settlements get prioritized for the CVF and which go elsewhere, potentially creating inconsistent funding streams.

Temporarily Tapping the Whistleblower Pool

The bill’s second, and perhaps more impactful, change involves the False Claims Act (FCA). The FCA is the law that allows the government (and private citizens, known as qui tam relators or whistleblowers) to recover money lost due to fraud against the government, often in areas like defense contracting or Medicare/Medicaid.

For a temporary period—from the bill’s enactment until September 30, 2030—money recovered under the FCA can now be deposited into the Crime Victims Fund. This is a huge injection of potential cash, as FCA settlements often involve billions of dollars. However, the bill is careful to protect two key groups. First, it explicitly ensures that the money owed to the whistleblowers who reported the fraud is protected and cannot be diverted to the CVF. Second, it protects the portion of the recovery meant to pay back the U.S. Government for the damages it suffered due to the fraud (SEC. 2).

What this means in practice is that the CVF is now competing for funds that might otherwise have gone into the general Treasury fund. While helping crime victims is undeniably a good cause, diverting these massive fraud recoveries—even temporarily—from the general Treasury raises questions about long-term fiscal stability. It’s essentially a five-year funding boost that leaves the long-term stabilization question unanswered, creating a reliance on a source that will dry up in 2030 unless Congress acts again.