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DOJ Announces Record-Breaking Year Of Settlements And Judgments Under The False Claims Act
01/27/2026At the same time that many members of Congress suggested that the Department of Justice (“DOJ”) has retreated from white collar enforcement,[1] DOJ announced that False Claims Act settlements and judgments reached a single-year record of $6.8 billion for the fiscal year ending September 2025.[2] DOJ’s focus on combatting health care fraud remains evident, with false claims settlements and judgments related to health care contributing $5.7 of the $6.8 billion. DOJ’s announcement also highlighted significant resolutions related to military procurement fraud, cybersecurity fraud, and pandemic-related fraud, and the DOJ also highlighted its commitment to combat tariffs and customs fraud.
Health Care Fraud
Over the course of 2025, the DOJ reported prioritizing three types of health care fraud: managed care, prescription drugs, and unnecessary services or substandard care.
Managed Care: Managed care, provided through Medicaid, is a health care delivery system that delivers Medicaid health benefits and additional services through state Medicaid agencies and managed care organizations. The DOJ pursued cases alleging false claims in managed care throughout 2025, with a particular focus on the Medicare Advantage (Medicare Part C) program, a managed care alternative offered by private companies and approved by Medicare. The DOJ entered into several multi-million-dollar Medicare Advantage settlements involving the submission of false and invalid diagnosis codes.
Prescription Drugs: The DOJ also announced its continued pursuit of actions against entities engaging in misconduct related to drug pricing, dispensing, and illegal kickbacks, including matters tied to the opioid crisis. The DOJ reported several significant settlements and judgments related to prescription drugs, worth hundreds of millions of dollars, for violations of the False Claims Act, the Anti-Kickback Statute, and fraudulently dispensing drugs without valid prescriptions. The DOJ also pursued several actions against pharmacies for filling prescriptions for controlled substances that lacked a legitimate medical purpose, were not valid, or were not issued in the usual course of professional practice. In addition to government-driven actions, the DOJ highlighted that individuals filing qui tam lawsuits— known as “relators”—were successful in pursuing these actions on behalf of the government even as the Eleventh Circuit Court of Appeals recently heard oral arguments, in December 2025, in an action questioning the constitutionality of actions brought by relators rather than DOJ.[3]
Unnecessary Services and Substandard Care: The DOJ also highlighted pursuit of matters in which health care providers submitted bills for medically unnecessary services and for substandard care. In one instance, a hospital allegedly agreed to pay $10.25 million to settle allegations that it billed Medicare and Medicaid for medically unnecessary inpatient admissions when observation status or outpatient care was more appropriate. In another action highlighted by DOJ, a nonprofit operating nursing homes in three states agreed to pay $3.61 million to resolve allegations that it billed Medicare and Medicaid for grossly substandard skilled nursing services.
DOJ’s Pursuit of Procurement Fraud
In addition to fraud in health care, the DOJ reportedly continued its pursuit of government procurement fraud, including military and other government contracting, as well as violations of the cybersecurity requirements included in federal contracts. With respect to military procurement, the DOJ said it secured the second-largest procurement fraud resolution in history, reaching a $428 million settlement with a weapons manufacturer that allegedly provided false cost and pricing data when negotiating government contracts.
The DOJ also recovered more than $52 million through nine cybersecurity fraud settlements in 2025. In these cases, DOJ alleged defendants failed to comply with essential terms in federal contracts and to ensure the security of government information.
Future Enforcement
In looking ahead, the DOJ emphasized its commitment to cooperating with whistleblowers and individuals filing qui tam actions, who reportedly received more than $5.3 billion in 2025 from qui tam actions filed both in 2025 and prior years. The DOJ also noted it will continue to pursue various procurement fraud schemes, including those related to the sale of foreign-made goods.
Footnotes
1. Letter from Senator Warren (D-Mass.), et al., to Inspectors General for the U.S. Dep’t of Just., U.S. Dep’t of State, U.S. Dep’t of Homeland Sec., U.S. Postal Service, and Treasury Inspector General for Tax Admin. (Jan. 22, 2026), https://www.warren.senate.gov/imo/media/doc/letter_to_inspectors_general_on_diversions_of_white-collar_investigators_to_ice.pdf.
2. False Claims Act Settlements and Judgments Exceed $6.8B in Fiscal Year 2025, U.S. Dep’t of Just. (Jan. 16, 2025), https://www.justice.gov/opa/pr/false-claims-act-settlements-and-judgments-exceed-68b-fiscal-year-2025.
3. See Pharma company challenges the U.S. False Claims Act: What’s at stake for whistleblowers and government enforcement? A& Shearman (Jul. 30, 2025), https://www.aoshearman.com/en/insights/ao-shearman-on-investigations/pharma-company-challenges-the-us-false-claims-act.
