US Department of Justice Announces US$6.8 Billion in Fiscal Year 2025 False Claims Act Recoveries

This alert provides a summary and takeaways from the US Department of Justice’s (DOJ) recent announcement of False Claims Act (FCA) recoveries for Fiscal Year (FY) 2025. FY 2025 saw record-breaking FCA recoveries—exceeding US$6.8 billion, and a record-breaking number of qui tam lawsuits, indicating that FCA enforcement remains a key tool for the government in combatting fraud. Entities that face potential False Claims Act liability, including health care providers and government contractors, should look to this Alert for insights on key enforcement priorities for DOJ as we move into 2026.

On 16 January 2026, DOJ published its report (Report) announcing civil recoveries under the FCA for FY 2025. The recoveries for FY 2025 exceeded US$6.8 billion, marking the highest recovery amount in a single year in the history of the FCA and more than doubling the FY 2024 recoveries of US$2.9 billion. As with recoveries more generally, there was also a notable uptick in health care-related recoveries. Approximately US$5.7 billion of the US$6.8 billion in total recoveries in FY 2025 (84%) involved the health care industry; whereas, FY 2024 health care recoveries were US$1.7 billion of the US$2.9 billion in total recoveries (56%). The US government has now collected over US$85 billion in recoveries under the FCA since the statute was amended in 1986 to allow for treble damages and increased incentives for whistleblowers. 

Notably, the 1,297 qui tam lawsuits filed in FY 2025 marked a record-high, eclipsing the prior high of 980 qui tam lawsuits that had been filed in FY 2024. As with FY 2024, qui tam cases comprised the largest portion of recoveries from FY 2025, with over 78% (US$5.3 billion) stemming from whistleblower actions. Of the record-setting 1,297 qui tam suits that were filed in FY 2025, 458 were health care focused. 

DOJ also highlighted its “key enforcement areas” for FY 2025: health care fraud; fraud in procurement, loan, and grant programs; and avoidance of tariffs and customs duties. DOJ also provided representative examples from these and other areas such as military procurement fraud, pandemic fraud, and cybersecurity fraud. As noted above, health care fraud was the principal source of FCA recoveries, which included recoveries relating to Medicare Advantage fraud, prescription drug-related fraud, and billing for unnecessary services and substandard care.

Health Care Fraud

With Medicare Advantage, also known as Medicare Part C, having become the largest component of the Medicare program, the government continued its focus on Medicare Advantage fraud. In FY 2025, the government secured a substantial recovery from a Medicare Advantage organization that allegedly engaged in retrospective medical record review and added improper diagnoses for plan enrollees to increase Medicare payments. DOJ also highlighted that it is continuing to litigate a number of cases against Medicare Advantage organizations. 

DOJ obtained substantial recoveries from providers who allegedly improperly billed for medically unnecessary services and substandard care. For example, DOJ highlighted a US$45 million settlement with a wound care provider and its founder, who had allegedly engaged in a nationwide scheme to falsely bill Medicare for surgical debridements that were medically unnecessary.

Additionally, some of the largest health care recoveries in FY 2025 resulted from alleged fraud related to prescription drugs. This included a jury verdict for US$949 million against a national long-term care pharmacy that had been alleged to have fraudulently dispensed drugs without valid prescriptions to elderly and disabled people in assisted living facilities and other residential long-term care facilities. 

DOJ also noted two large jury verdicts for claims asserted by qui tam relators against a drug manufacturer and a pharmacy benefit manager (PBM). With regard to the drug manufacturer, qui tam relators had alleged that the manufacturer violated the FCA and its state corollaries through a kickback scheme and off-label promotion of two HIV drugs. In that case, the jury awarded over US$1.6 billion in damages. With regard to the PBM, a qui tam relator alleged the PBM caused certain health insurers to misrepresent to the federal government the amount the insurers paid for prescription drugs on behalf of Medicare beneficiaries, given that the PBM had contracted with pharmacies to pay a fixed average price for prescription drugs but caused higher prices to be reported. In that case, the jury awarded roughly US$289 million.

Other Enforcement Priorities

In addition to health care-specific recoveries, the government recovered significant funds stemming from military procurement fraud, pandemic fraud, cyber fraud, and tariff and customs avoidance. The military procurement fraud recoveries included the second-largest procurement fraud recovery in history—a US$428 million settlement against a contractor to resolve allegations that the contractor knowingly provided false cost and pricing data in negotiating defense contracts and double-billed on certain contracts.

The government also resolved more than 200 cases, totaling over US$230 million, in connection with pandemic-related fraud. As with FY 2024, the pandemic fraud largely stemmed from the submission of inaccurate information in PPP loan applications, though the DOJ also highlighted a US$8.2 million recovery that resolved allegations of false claims for COVID-19 services rendered to patients with active health insurance, which services were billed to a federal health care program designed for uninsured patients. To date, DOJ has collected over US$820 million in recoveries relating to pandemic-related fraud.

In October 2021, DOJ announced its Civil Cyber-Fraud Initiative with the goal of pursuing companies who receive federal funds while failing to follow required cybersecurity standards. In FY 2025, the government recovered over US$52 million in recoveries across nine cybersecurity fraud settlements. DOJ noted that civil cybersecurity fraud settlements have more than tripled in each of the past two years, signaling cybersecurity as a growing enforcement priority for DOJ.

FY 2025 also saw increased enforcement with regard to tariff and customs avoidance. For example, DOJ recovered US$12.4 million in recoveries from a Texas-based supplier of countertop and cabinetry products and the supplier’s president to resolve allegations that the supplier misrepresented the types of goods imported from the People’s Republic of China in order to avoid antidumping and other duties. Of note, tariff and customs-related recoveries could have been even higher in FY 2025; however, the largest customs fraud resolution in the history of the FCA—a US$54.4 million settlement with a distributor of ceramic compounds—was entered in December 2025, putting that recovery in FY 2026.

DOJ Investigations

DOJ’s Report also noted that the government opened 401 investigations in FY 2025, including with regard to matters DOJ had previously announced as policy objectives of the Trump administration. These policy objectives include: combatting discriminatory practices and policies related to diversity, equity, and inclusion; ending antisemitism; gender-affirming care; ending sanctuary jurisdictions; and prioritizing denaturalization of individuals who “illegally procured” naturalization or who procured naturalization by “concealment of a material fact or by willful misrepresentation.”

Whistleblower Suits

Given the record-setting number of qui tam cases filed in FY 2025, it will be important to continue to monitor developments regarding the constitutionality of the qui tam provisions. On 30 September 2024, a judge in the US District Court for the Middle District of Florida held that the qui tam provisions of the FCA violate the Appointments Clause of Article II of the US Constitution. This first-of-its-kind decision has sparked a wave of filings by the defense bar. With the Eleventh Circuit having heard oral argument in December 2025 on appeal of the Middle District of Florida’s decision, we anticipate a decision from the Eleventh Circuit in the coming months; and there are sure to be many other developments on this issue in FY 2026.

The FY 2025 settlements and judgments provide an insight into the government’s enforcement priorities and potential future enforcement areas. The firm's forthcoming article The False Claims Act and Health Care: 2025 Recoveries and 2026 Outlook will provide an in-depth analysis of the 2025 recoveries as well as some key enforcement areas to look out for in 2026.

The firm’s Federal, State, and Local False Claims Act practice group practitioners will continue to closely monitor developments regarding DOJ’s civil fraud enforcement, and we are able to assist entities that are dealing with FCA actions.