DOJ Reports Record $6.8 Billion in False Claims Act Recoveries for Fiscal Year 2025

The U.S. Department of Justice has achieved unprecedented success in its fraud enforcement efforts, recovering a record $6.8 billion in False Claims Act settlements and judgments during fiscal year 2025. This marks the highest recovery in a single year since the legislation’s enactment.

Whistleblowers played a crucial role in these enforcement actions, filing an all-time high of 1,297 qui tam lawsuits that triggered 401 new federal investigations. Healthcare fraud dominated the recovery landscape, accounting for $5.7 billion of the total amount—funds that will be restored to federal healthcare programs including Medicare, Medicaid, and TRICARE.

Beyond healthcare, the Justice Department has expanded its focus to government procurement fraud, contractor cybersecurity violations, and pandemic program abuse. The department has also strengthened its approach to combating tariff and customs duty evasion by establishing a cross-agency Trade Fraud Task Force.

In a move signaling further commitment to fraud prevention, the Trump Administration announced on January 8 plans to create a National Fraud Enforcement Division within the DOJ. This new division will target fraud affecting government programs, federally funded benefits, businesses, nonprofits, and private citizens.

The division will be led by an Assistant Attorney General who will coordinate multi-district investigations, establish enforcement priorities, and advise senior DOJ leadership on significant fraud cases. The AAG will also support U.S. Attorneys’ Offices and propose legislative and regulatory reforms to address systemic vulnerabilities in fraud prevention.

Meanwhile, a major pharmaceutical distributor has found itself in legal trouble over opioid distribution. Atlantic Biologicals Corporation entered a two-year deferred prosecution agreement on January 13 after admitting that its National Apothecary Solutions unit knowingly distributed millions of opioid pills to Houston-area pill mills between 2017 and 2023.

According to court documents, NAS sold over 14 million doses of opioids and related substances, generating more than $2.5 million in gross proceeds from sales that occurred outside legitimate medical practice. The unit will cease operations this month.

The company allegedly implemented superficial compliance measures while deliberately ignoring red flags such as unusual ordering patterns, above-market pricing, suspicious pharmacy operations, and inadequate due diligence. Under the agreement, Atlantic Biologicals must cooperate with investigators, implement stronger compliance measures, and pay a $450,000 criminal penalty.

In another significant healthcare fraud case, federal prosecutors have charged Mark Loftis, owner of Back Pain Home Supplies LLC (doing business as EZ Medical Supply), with orchestrating a $30 million scheme to defraud Medicare, TRICARE, and CHAMPVA through fraudulent claims for orthotic braces and durable medical equipment.

The indictment alleges that Loftis paid illegal kickbacks to marketers for patient referrals and to telemedicine companies for doctors’ orders issued without proper patient evaluations. Of the $30 million in allegedly fraudulent claims submitted, healthcare programs paid approximately $8 million.

Prosecutors further allege that Loftis misappropriated over $133,000 in COVID-19 Provider Relief Funds by falsely certifying compliance with program requirements, then diverting the money to support his fraud scheme and personal expenses. If convicted, he faces up to 20 years in prison on the most serious charges.

In one of the largest healthcare settlements of the year, Kaiser Permanente affiliates have agreed to pay $556 million to resolve False Claims Act allegations related to Medicare Advantage fraud. The government alleged that from 2009 to 2018, Kaiser systematically pressured physicians to retroactively add diagnoses to patient medical records to increase payments from Medicare.

According to investigators, Kaiser developed systems to search patient histories for potentially billable diagnoses and urged providers to add these diagnoses via addenda to medical records—sometimes more than a year after patient visits occurred. The company allegedly established aggressive targets tied to financial incentives while ignoring internal warnings about the practices.

Two whistleblowers—former Kaiser employees Ronda Osinek and Dr. James Taylor—will receive $95 million of the settlement amount for bringing the allegations to light under the qui tam provisions of the False Claims Act.

In an unrelated case highlighting fraud’s reach beyond healthcare, federal prosecutors have charged 20 college basketball players in connection with an elaborate sports bribery scheme. The alleged conspiracy involved fixing games in both the Chinese Basketball Association and NCAA men’s basketball.

According to the indictment filed in the Eastern District of Pennsylvania, from September 2022 through February 2025, fixers bribed players to underperform in order to influence game outcomes and betting results. The scheme reportedly began with CBA games before expanding to NCAA competition, eventually involving 39 players across 17 Division I teams and affecting 29 collegiate games.

The fixers allegedly targeted NCAA players for whom bribes of $10,000-$30,000 per game would significantly exceed legitimate name, image, and likeness opportunities. The scheme generated millions in betting proceeds and hundreds of thousands in bribes for participants, prosecutors claim.