Justice Department Reports Record $6.8 Billion in False Claims Act Recoveries for 2025

The Department of Justice announced unprecedented False Claims Act enforcement results for fiscal year 2025, recovering $6.8 billion in settlements and judgments—the highest single-year amount since the DOJ began reporting such statistics in 1987.

The record-setting figure easily surpassed the previous high of $6.1 billion established in 2014 and more than doubled recoveries seen in recent years. After reaching $5.7 billion in 2021, recoveries had dipped to $2.2 billion in 2022 before gradually increasing to $2.8 billion in 2023 and $3.1 billion in 2024.

Healthcare fraud dominated the enforcement landscape, accounting for $5.7 billion—approximately 83% of total recoveries. This represents a significantly higher concentration than in previous years (68% in FY 2023 and 58% in FY 2024) and exceeds the industry’s historical average of 70% of all FCA recoveries since 1987.

Two major pharmaceutical industry verdicts contributed substantially to this year’s figures, accounting for approximately $2.5 billion—or 44% of healthcare-related recoveries. One case resulted in $1.6 billion in penalties, while another yielded $948 million. Analysts noted the unusually high per-claim penalties in both cases.

Defense contractor fraud also saw significant attention, with $633 million recovered from Department of Defense contracts—a 550% increase from FY 2024 and just $7 million short of the all-time high established in 2006. This marks only the second time since 2009 that DOD-related recoveries exceeded $300 million.

Other sectors accounted for the remaining $532 million (7.7%) of recoveries, with pandemic-related fraud—particularly involving the Paycheck Protection Program—yielding over $230 million. The Justice Department also reported $52 million in cybersecurity fraud recoveries and highlighted ongoing efforts targeting civil rights violations and customs/tariff avoidance, though specific recovery amounts for these areas were not disclosed.

The total number of new FCA matters reached an all-time high of 1,698, representing a 21% increase over last year’s record of 1,405. Whistleblowers filed 1,297 of these cases—the highest number since record-keeping began and a 32% jump from FY 2024. The government initiated the remaining 401 cases independently.

Whistleblower-originated cases produced more than $5.3 billion in recoveries, representing over 77% of the total. Whistleblowers received more than $330 million in rewards, with $262 million going to those who reported healthcare fraud. Since the 1986 amendments to the False Claims Act, healthcare whistleblowers have received more than $7.6 billion in payments.

The DOJ’s healthcare enforcement focused on three key areas: managed care, prescription drugs, and medically unnecessary services. In the managed care arena, two major settlements with Medicare Advantage providers—$98 million and $62 million respectively—involved allegations of submitting false diagnosis codes to increase reimbursement.

Prescription drug enforcement yielded substantial results, including a $948 million judgment against a long-term care pharmacy for dispensing medications without valid prescriptions, a $450 million settlement with a generic drug manufacturer over alleged copay schemes and price fixing, and a $176 million settlement with a biopharmaceutical company regarding payments to high-volume prescribers.

The DOJ also continued scrutinizing unnecessary healthcare services and substandard care, highlighting a $45 million settlement with a wound care provider, a $10.25 million resolution involving improper hospital admissions, and multiple cases addressing substandard nursing home care.

In a significant development, the DOJ established a Civil Rights Fraud Initiative in May 2025, focusing on using the FCA against organizations that “knowingly violate federal civil rights laws.” The initiative targets institutions receiving federal funding that allegedly engage in discriminatory practices, including through diversity, equity, and inclusion programs that the administration considers non-compliant with civil rights laws. This enforcement effort has already led to investigations of hiring and promotion practices at major federal contractors.

Legal challenges to the FCA’s whistleblower provisions continue to advance through the courts. The Eleventh Circuit heard arguments in December 2025 on a case that previously ruled the qui tam provisions unconstitutional, while similar questions have been raised in the Third, Fifth, and Sixth Circuits.

The Trump administration announced on January 8, 2026, the creation of a new Division for National Fraud Enforcement within the DOJ, to be led by an assistant attorney general operating directly from the White House and reporting to the president and vice president. The new division’s initial focus appears to be benefits-related fraud in Minnesota, though its broader implications remain to be seen.

With these developments and record-setting figures, the healthcare industry—already among America’s most heavily regulated sectors—faces heightened scrutiny and enforcement risks as the government continues expanding its use of the False Claims Act.