False Claims Act Year in Review

In the fiscal year ending September 30, 2025 (FY2025), the Department of Justice obtained settlements and judgments under the False Claims Act totaling $6.8 billion — breaking the previous annual record of $6.1 billion set in 2014. Of that amount, $5.3 billion was traceable to qui tam-filed settlements and judgments, while $1.5 billion resulted from matters initiated by the federal government. Qui tam whistleblowers were awarded over $330 million in relator-shared awards. Settlements and judgments under the FCA since 1986 now total more than $85 billion.

However, the size of the total recoveries in FY2025, without looking at the underlying conduct, arguably overstates the breadth of FCA enforcement activity for the year. Of this year's $6.8 billion in recoveries, more than $5.7 billion relate to healthcare, including alleged fraud related to federally funded healthcare programs like Medicaid, Medicare, and TRICARE and alleged fraud in managed care, prescription drugs, and unnecessary services and substandard care. Of that amount, almost $1 billion is attributable to Omnicare, where a jury trial found liability and the court awarded treble damages, and $1.6 billion is attributable to Janssen, where a jury found the Johnson & Johnson subsidiary engaged in unlawful marketing of its HIV medications. The Janssen trial marked the largest FCA healthcare payout in history.

The remaining $1.1 billion in non-healthcare-related recoveries represents awards or settlements in procurement, loans and grant fraud, and tariff and customs avoidance.[1] Resolutions amounting to over $850 million were announced during the first two quarters of FY 2025, suggesting that the data, standing alone, may be of only limited value in assessing how the new administration’s level of aggressiveness in FCA enforcement will play out in 2026.

[1] United States Department of Justice, Office of Public Affairs, "Press Release: False Claims Act Settlements and Judgments Exceed $6.8B in Fiscal Year 2025," https://www.justice.gov/opa/pr/false-claims-act-settlements-and-judgments-exceed-68b-fiscal-year-2025; United States Department of Justice, “Fact Sheet," https://www.justice.gov/opa/media/1424126/dl.

If the FY2025 enforcement statistics fail to definitively measure how aggressively this Administration will enforce the FCA in 2026, the Administration's enforcement guidance and initiative launches have certainly sent a message that we will see in 2026 and beyond an approach of "FCA enforcement on steroids." Last year, DOJ announced several major FCA-related initiatives. These initiatives make clear that DOJ under the Trump Administration will continue to use the FCA as a primary tool to combat fraud on the Government, while, at the same time, reinforcing the Administration's policy preferences.

A. DOJ-HHS FCA Working Group

On July 2, 2025, the DOJ–HHS False Claims Act Working Group (Working Group) was formally re‑launched as a cross‑agency initiative designed to enhance coordination between DOJ and the Department of Health and Human Services HHS) in pursuing healthcare-related FCA enforcement. The Working Group brings together senior leadership from HHS's Office of General Counsel, HHS‑OIG, CMS's Center for Program Integrity, DOJ's Civil Division, and representatives from US Attorneys' Offices to centralize FCA review, align enforcement priorities, and accelerate investigative timelines. Its purpose is to strengthen information‑sharing and case referrals, use joint data analytics, and establish a structured process for evaluating potential FCA violations, including whether to impose payment suspensions or to seek dismissal of weak qui tam suits.

The Working Group has publicly identified six healthcare priority areas: (1) Medicare Advantage plans; (2) drug/biologics/device pricing; (3) barriers to patient access; (4) kickbacks; (5) materially defective medical devices; and (6) manipulation of electronic health records. These priority areas reflect DOJ's focus on high‑risk sectors involving complex reimbursement models and large federal expenditures, and echo many of the healthcare priorities identified in this Administration's revamped Corporate Enforcement Policy issued on March 10, 2026. The group is also expected to leverage DOJ's new Health Care Fraud Data Fusion Center, which combines DOJ and HHS data resources and advanced analytics, including AI, to proactively detect fraudulent billing schemes and identify emerging risk patterns.

This July 2025 relaunch of a program initially started under the Biden administration signals a proclaimed sharpening federal enforcement against healthcare fraud and abuse and is consistent with the Administration's stated intent to "aggressively" enforce the FCA. The Working Group is expected to encourage more voluntary disclosures, generate more DOJ‑initiated investigations, and recalibrate how declined qui tam actions are handled—potentially increasing government use of dismissal authority under 31 USC. § 3730(c)(2)(A).[1]

Finally, even where DOJ declines intervention in filed FCA cases, the affected agency may pursue the case under the Administrative False Claims Act (AFCA), 31 USC. § 3801–3812. Enacted in November 2025, the AFCA modernizes agency enforcement by, among other things, expanding monetary thresholds where agencies can pursue FCA remedies administratively in cases DOJ declines to pursue.

B. Trade Fraud Task Force

The DOJ and Department of Homeland Security (DHS) Cross‑Agency Trade Fraud Task Force, launched on August 29, 2025, is a coordinated enforcement initiative designed to aggressively pursue importers and other entities that evade tariffs, misclassify goods under the Harmonized Tariff Schedule (HTS), understate value, falsely claim country‑of‑origin, or smuggle prohibited items into the United States. The Task Force brings DOJ's Civil and Criminal Divisions together with DHS components—including Customs and Border Protection and Homeland Security Investigations—to enforce trade laws through duty‑ and penalty‑collection actions under the Tariff Act, civil FCA actions, and criminal prosecutions. In announcing the launch of this Task Force, DOJ emphasized that because tariff evasion harms US manufacturers, destabilizes domestic markets, and threatens national security, the Administration has made trade fraud a top‑tier enforcement priority under its "America First Trade Policy."

DOJ highlighted that the Task Force will use the FCA as a central civil enforcement tool in customs matters—particularly to pursue schemes involving duty evasion, false customs declarations, and other misrepresentations made to avoid paying tariffs where individuals have acted knowingly or recklessly (as opposed to inadvertent mistakes or negligence). The announcement stated that the Task Force will pursue custom violations under the Tariff Act of 1930, under the FCA, and, wherever appropriate, parallel criminal prosecutions, penalties, and seizures under Title 18's trade fraud and conspiracy provisions. The announcement also encouraged whistleblower referrals through both DOJ's Criminal Corporate Whistleblower Program and FCA qui tam filings.[2]

C. The Civil Rights Fraud Initiative

The Administration wasted no time in deploying FCA enforcement efforts toward "illegal" DEI programs operated by government contractors and grantees. Executive Order 14151, "Ending Radical and Wasteful Government DEI Programs and Preferencing," issued on January 20, 2025, directs the federal government to eliminate all diversity, equity, inclusion, and accessibility (DEIA) programs, mandates, positions, grants, and training across federal agencies. It states that DEI initiatives implemented under prior administrations constituted "illegal and immoral discrimination," created government waste, and improperly influenced federal hiring and operations. The order instructs the Office of Management and Budget (OMB), the Office of Personnel Management (OPM), and the Attorney General to oversee the termination of DEI/DEIA programs, revise federal employment practices to remove equity‑related considerations, and ensure hiring and performance evaluations rely only on merit‑based factors such as skills and performance.

EO 14151 also required every federal agency to identify and terminate DEI, DEIA, and environmental‑justice‑related positions, programs, and contracts within 60 days, and to report all such activities—including any rebranded efforts—to OMB. Agencies must also list all contractors and grantees involved in DEI‑related work since 2021. EO 14151 aims to remove DEI influence from federal operations and redirect government functions toward what it describes as equal treatment without group‑based preference. The order is part of a larger policy shift that rejects prior federal equity initiatives and establishes a merit‑based framework for federal employment and program administration.

Executive Order 14173, "Ending Illegal Discrimination and Restoring Merit-Based Opportunity," issued on January 21, 2025, directs all federal agencies to eliminate what it describes as "illegal" race‑ or sex‑based preferences tied to DEI/DEIA programs. It states that many public and private institutions have adopted discriminatory DEI practices that undermine federal civil‑rights laws and the principles of merit, individual achievement, and equal treatment. The order requires agencies to terminate any mandates, policies, programs, training, or enforcement actions that use DEI or DEIA considerations, and to enforce civil‑rights laws strictly without applying race‑ or sex‑based criteria.

Additionally, EO 14173 revokes several earlier executive orders—including Executive Orders 12898, 13583, 13672, and others—that promoted affirmative action or DEI initiatives within the federal government and among government contractors. It instructs federal agencies to ensure that hiring, promotion, and contracting decisions rely solely on merit, and requires federal contractors and grantees to certify that they do not operate "illegal" DEI programs, and this certification is material to receiving government funds. The order also instructs OMB and the Attorney General to coordinate the removal of DEI requirements across the government and to develop measures aimed at discouraging DEI-based preferences in the private sector.

The clear intent behind both these Executive Orders, particularly the identification of federal contractors engaging in DEI programs and the "anti-DEI" certifications, is to make it easier to prosecute contractors and grantees for engaging in "illegal" DEI programs.

In May 2025, in the wake of these orders and the Bondi Memo, Deputy Attorney General Todd Blanche announced the Civil Rights Fraud Initiative. This Initiative empowered DOJ's Civil Fraud and Civil Rights Divisions to jointly pursue FCA claims against federal-funding recipients, including government contractors and institutions of higher education, that operate unlawful DEI programs. The stated aim of the Initiative is to target "racist preferences, mandates, policies, programs, and activities." The implementation of this Initiative is discussed further in Section IV.F, infra.

On July 29, 2025, former Attorney General Bondi issued another memorandum titled, "Guidance for Recipients of Federal Funding Regarding Unlawful Discrimination," which warned that certain DEI programs may violate federal civil rights laws and emphasizes that falsely certifying compliance with those laws to obtain or retain federal funds could expose recipients to enforcement actions, including liability under the FCA. This memorandum also identified "non-binding best practices" to help entities avoid the risk of civil rights violations, including (1) the prohibition against using protected characteristics as criteria for "employment, program participation, resource allocation, or other similar activities, opportunities, or benefits," (2) non-use of "facially neutral criteria" as proxies for protected characteristics, and (3) the scrutiny of third-party programs funded by federal fund recipients.

[1] United States Department of Justice, Office of Public Affairs, "Press Release, DOJ-HHS False Claims Act Working Group," Jul. 2, 2025, https://www.justice.gov/opa/pr/doj-hhs-false-claims-act-working-group.

[2] United States Department of Justice, Office of Public Affairs, "Press Release, Departments of Justice and Homeland Security Partnering on Cross-Agency Trade Task Force," https://www.justice.gov/opa/pr/departments-justice-and-homeland-security-partnering-cross-agency-trade-fraud-task-force.

In matters that were either initiated under the Biden Administration and brought to resolution under this Administration, or initiated by this Administration, FCA enforcement swept across many sectors in 2025 with healthcare once again leading the list. Beyond healthcare, 2025 also saw significant action in the government contracts, cybersecurity, trade enforcement, and other sectors.

A. Healthcare

Consistent with past years, most DOJ FCA enforcement actions resolved in 2025 were related to alleged frauds under federal healthcare programs. These actions were brought under a variety of different forms of alleged fraudulent schemes, ranging from Anti-Kickback Statute (AKS) and Stark Law violations and overbilling to upcoding and prescribing medically unnecessary procedures or drugs.

A sampling of significant enforcement actions from 2025 demonstrates the breadth of current healthcare enforcement under the FCA. We discuss a number of these resolutions involving recoveries in excess of $10 million here.

1.  Illegal Marketing Practices

Pfizer. A subsidiary of Pfizer Inc., Biohaven Pharmaceutical Holding Company Ltd., was alleged to have paid kickbacks to healthcare professionals to induce them to prescribe a migraine medication in violation of the FCA and AKS from March 2020 through September 2022. This included payments for speaker programs attended by prescribers as well as their family, friends, and colleagues from the same practice. Pfizer agreed to pay nearly $60 million to resolve the claims, with $8.4 million to go to the qui tam relator, a former Biohaven sales representative.[1]

Apex Medical. Arizona resident Alexandra Gehrke faced allegations that she orchestrated a large-scale wound-care scheme from 2022 through 2024 where untrained sales representatives at her companies ordered medically unnecessary and excessive bioengineered skin substitutes for wound care, including for many patients in hospice care, that were then billed to Medicare and other health insurers. Gehrke was alleged to have received nearly $280 million in kickbacks from the wholesale graft distributor in exchange for the purchases. Gehrke, as well as her company Apex Medical LLC, agreed to pay $280 million to resolve the FCA allegations. Gehrke was also sentenced to 15.5 years in prison in a parallel criminal case.[2]

Gilead Sciences. Gilead Sciences, Inc., a large pharmaceutical manufacturer that develops, manufactures, and sells drugs for the treatment of HIV/AIDS, allegedly offered and paid kickbacks to healthcare practitioners speaking at or attending Gilead speaker events, including in the form of honoraria payments, meals, and travel expenses, to induce them to prescribe Gilead's drugs, violating the AKS and causing false claims to be submitted for Gilead's HIV drugs. Gilead agreed to pay $202 million to settle the FCA allegations, with almost $177 million going to the United States and the remainder going to various impacted states.[3]

Kevin Murdock/Premier Medical. Kevin Murdock, former CEO and owner of now-defunct laboratory Premier Medical Inc., faced claims for fraud, waste, and abuse against various state Medicaid programs. Murdock was alleged to have paid illegal kickbacks for referrals for expensive cancer genetic testing targeting Medicaid patients that would result in favorable reimbursement from the state Medicaid programs. Murdock agreed to a consent judgment of around $27.5 million, acknowledging likelihood that he would be found liable in a civil action. The claims against Murdock and his co-defendants were settled for over $114 million in judgments.[4]

Semler. Semler Scientific Inc. and its former distributor, Bard Peripheral Vascular, faced allegations that they knowingly and falsely claimed that tests conducted using certain Semler products were reimbursable by Medicare, even after receiving concerns from third parties about reimbursement, causing healthcare providers to submit false claims to Medicare. Semler agreed to pay nearly $30 million and to enter a five-year Corporate Integrity Agreement, and Bard agreed to pay $7.2 million, to resolve the FCA allegations.[5]

Community Health System. Community Health System (CHS) and its affiliate, Physician Network Advantage Inc. (PNA), were alleged to have paid "extravagant benefits" to physicians in the Fresno area to induce them to refer patients to CHS facilities for medical services and to have subsidized certain technology and equipment used by physicians in return for referrals, in violation of the AKS and causing false claims to be submitted in violation of the FCA.[6] DOJ also contended that the financial relationship violated the Stark Law against referrals from physicians with a financial relationship with a hospital. CHS and PNA agreed to pay $31.5 million to resolve the allegations, with approximately $5 million going to the qui tam relator.

NUWAY Alliance. NUWAY Alliance Inc., which provided intensive outpatient treatment for substance use disorder in the Minnesota area, was alleged to have, between January 2019 and February 2025, compensated Medicaid patients for seeking intensive outpatient treatment reimbursable by Medicaid in violation of the AKS and resulting in false claims in violation of the FCA, and to have submitted false claims to Medicaid for services they did not provide.[7] NUWAY agreed to pay $18.5 million to resolve the allegations, without any determination of liability or wrongdoing.

2. Unnecessary/Defective Products and Services

Walgreens. Walgreens and several of its subsidiaries faced allegations that Walgreens pharmacists knowingly filled millions of unlawful opioid prescriptions, including prescriptions for excessive quantities of opioids, prescriptions filled significantly early, and prescriptions for known dangerous combinations of drugs, despite clear red flags indicating a likelihood that the prescriptions were invalid. Some claims allege that Walgreens pressured pharmacists to fill prescriptions and ignored evidence of unlawful prescriptions. Walgreens ultimately agreed to pay $300 million to settle the claims, with an additional $50 million owed if it is sold, merged, or transferred prior to fiscal year 2032. 17.25% of the government's recovery will go to pay the qui tam relators, who were formerly Walgreens employees.[8]

CVS/Omnicare. CVS Health Corporation (CVS Health) and its subsidiary—Omnicare, the largest long-term pharmacy in the United States—faced allegations that Omnicare fraudulently dispensed drugs without valid prescriptions to elderly and disabled persons in residential long-term care facilities. In April, a unanimous jury found CVS Health and Omnicare liable under the FCA for over $135 million in damages. The judge awarded treble damages, bringing the award to over $400 million plus statutory penalties to be determined by the court.[9] Later, the court limited the penalties to $542 million, for a total award of nearly $950 million.[10]

CVS Pharmacy, Inc. CVS Pharmacy Inc. (CVS Pharmacy) faced allegations that it violated the federal and California FCAs by failing to confirm and document required diagnoses for certain drugs and, in some cases, dispensing drugs for nonapproved diagnoses, and billing Medi-Cal for those prescriptions. CVS Pharmacy agreed to pay over $18 million to resolve the allegations, with $3.3 million going to a former CVS pharmacist who brought claims under the qui tam provisions of the federal FCA.

VRA Enterprises. VRA Enterprises, LLC, doing business as Precision Rx, is a Tampa, Florida pharmacy that faced allegations that it, between August 2022 and May 2023, knowingly submitted or caused the submission of claims to Medicare for over-the-counter COVID-19 tests that it did not provide to beneficiaries or that it did not ship until April 2023, despite thousands of complaints that beneficiaries did not receive COVID-19 tests on time. VRA agreed to pay over $17 million to resolve the allegations.[11]

Aesculap Implant Systems. Aesculap Implant Systems LLC faced allegations that it, from 2010 to 2023, sold a line of prosthetic implants used in knee surgeries knowing that the implants would fail prematurely and at a higher rate than acceptable, often shortly after surgery, without disclosing the known problem or recording, tracking, or reporting such failures. Aesculap was also alleged to have paid a surgeon who experienced problems with the implant to induce him to use and recommend the implants. Aesculap agreed to pay $38.5 million to resolve the allegations under the FCA, $4.475 million of which would go to qui tam relators who served as one of Aesculap's third-party distributors.[12]

Vohra Wound Physicians. In April 2025, the Department of Justice filed a complaint alleging that Vohra Wound Physicians Management LLC (Vohra) engaged in a nationwide scheme to falsely bill for medically unnecessary wound care services, including by misusing proprietary software, hiring physicians who lacked expertise and providing them with improper training, and pressuring physicians to meet revenue targets.[13] In November, Vohra agreed to pay $45 million and to enter into a five-year Corporate Integrity Agreement to settle the claims.[14]

3. Improper Billing

American Psychiatric Centers, Inc. American Psychiatric Centers Inc., doing business as Comprehensive Psychiatric Services (CPS), faced allegations that, from 2015 through December 2022, it improperly submitted "add-on codes" for psychotherapy services performed in conjunction with an evaluation and management visit without providing required documentation of such add-on services. CPS agreed to pay $2.75 million to resolve the FCA allegations, with $134,430.68 going to the State of California and the remainder to the United States.

Taylor v. Health Care Assocs. of Texas. Healthcare providers Healthcare Associates of Texas, LLC (HCAT) and Healthcare Associates of Irving, LLC (HCAI) faced allegations from a qui tam relator that they had submitted claims to Medicare that were billed under the names of providers not involved in the actual care, and without required documentation, in part because some of the providers were not properly credentialed. At trial, the jury found HCAT and HCAI had caused over $2.75 million in damages and were liable for treble damages, as well as a statutory penalty of nearly $450 million. Later, the district court granted the relator's motion for entry of judgment but found the statutory penalty constitutionally excessive. United States ex rel. Taylor v. Healthcare Associates of Texas, LLC, No. 3:2019-CV-02486-N (Feb. 26, 2025), Dkt. No. 643.

Saint Vincents Catholic Medical Centers. Saint Vincents Catholic Medical Centers of New York (St. Vincent), one of six health plans participating in a program run by a component of the Department of Defense, faced claims brought by a qui tam whistleblower that, since 2012, it knowingly retained erroneously inflated payments received for healthcare services provided to retired military members and their families and continued to submit invoices at the knowingly inflated rates. St. Vincent agreed to pay $29 million to resolve the qui tam claims, with $5.655 million going to the qui tam relators. However, the government is continuing to pursue other claims against St. Vincent.[15]

Seoul Medical Group. California-based healthcare provider Seoul Medical Group Inc. (SMG) and its subsidiary Advanced Medical Management Inc. (AMM) were alleged to have, from 2015 to 2021, submitted diagnosis codes to Medicare for severe spinal conditions for patients who did not suffer from those conditions and, when questioned about some of the diagnoses, to have created radiology reports that appeared to support the questioned diagnoses, resulting in an increase in payment from Medicare Advantage. SMG and AMM agreed to pay over $58 million to resolve the allegations, including some from a qui tam relator who was formerly Vice President and Chief Financial Officer of AMM.[16]

4. Medical Research Grants

Dana-Farber. The Dana-Farber Cancer Institute faced claims that it made materially false statements and certifications related to National Institutes of Health (NIH) research grants between 2014 and 2024. As part of a settlement announced December 16, 2025, Dana-Farber admitted that researchers had made 14 publications with misrepresented and/or duplicated images and data, and that funds were spent in impermissible ways. These misrepresentations made Dana-Farber's certifications that it was complying with NIH grant terms and conditions false and misleading. Although Dana-Farber cooperated with the government, it still had to pay $15 million to resolve the matter, of which $2,625,000 went to the relator.[17]

5. Significant Pending Health Care FCA Actions

Inland Empire Health Plan. On September 17, 2025, DOJ filed an FCA complaint against a California health plan, the Inland Empire Health Plan (IEHP), for making false statements to Medi-Cal, California's Medicaid program, and knowingly retaining overpayments that it received under the Affordable Care Act's Medicaid Expansion Program. Under the program, the funds were only to be spent on Medicaid Expansion programs, but DOJ's Complaint alleges that IEHP retained over $320 million in funds and spent them on other programs and fraudulently funneled payments to attorneys, consultants, and technology providers contractors through healthcare providers.[18]

Illegal Insurance Broker Kickbacks. On May 1, 2025, DOJ announced the unsealing of an FCA complaint against three national health insurers for hundreds of millions of dollars in illegal kickbacks allegedly paid to large insurance broker organizations, who were also named defendants. This case was originally filed by a qui tam whistleblower but is currently being handled by the DOJ Civil Division's Fraud Section and the US Attorney's Office for the District of Massachusetts.[19]

Martin's Point Health Care. In March 2024, DOJ filed a civil FCA complaint against Maine‑based health plan Martin's Point Health Care and five other health plans participating in the Uniformed Services Family Health Plan (USFHP), alleging that the defendants knowingly retained inflated payments from the Department of Defense for military managed care services.[20] The government alleges that, after learning in 2012 that the Government's calculation errors which the Government did not notice had caused overpayments under the USFHP program, Martin's Point and the other plans concealed those errors and continued to seek and accept inflated rates rather than returning the excess funds to the government. The complaint is part of a whistleblower action originally filed in 2016, and while one co‑defendant (Saint Vincent's Catholic Medical Centers of New York) has settled for $29 million as described above in the Improper Billing section, DOJ continues to pursue the remaining claims against Martin's Point and others.[21]

Medicare Advantage Organizations. DOJ continues to litigate matters against major health insurance companies alleging that they added improper diagnoses to increase reimbursement from the Medicare Advantage Program.[22] These efforts include long-running litigation against UnitedHealth Group, which has spanned nearly a decade and targets the nation's largest Medicare Advantage organization.[23] DOJ is also litigating similar claims against Anthem, Inc.,[24] and recently reached a settlement resolving related allegations with Kaiser Permanente.[25]

B. Cybersecurity

The Government has also continued to aggressively use the False Claims Act to enforce cybersecurity requirements incorporated into government contracts. Last year, under the Civil Cyber-Fraud Initiative, launched in 2021, the Government recovered over $52 million, more than triple the amount recovered under the Initiative in the previous two years.[26] This signals a continued enforcement risk for contractors that process, store, handle and transmit controlled unclassified information under their DOD contracts, and are therefore subject to DFARS cybersecurity requirements. Contractors that handle Personal Health Information (PHI) and personal identifying information in connection with federal healthcare programs face similar risks.

In 2025 there were several notable FCA settlements involving allegations that government contractors had failed to comply with their contractual cybersecurity requirements.

Georgia Tech. On September 30, 2025, the Georgia Tech Research Corporation, the research arm of Geogia Tech University, agreed to pay $875,000 to resolve allegations that it failed to meet cybersecurity requirements in Air Force and DARPA research contracts by not maintaining required anti malware protections, lacking a system security plan until at least 2020, and submitting an inflated cybersecurity assessment score in 2020.[27]

Raytheon/RTX/Nightwing. Another settlement based on failure to adhere to cybersecurity requirements in the defense contracting area is a May 1, 2025 settlement involving Raytheon, RTX Corporation, and Nightwing Group, who agreed to pay $8.4 million to resolve allegations that from 2015 to 2021 Raytheon used a non-compliant internal development system lacking required DOD cybersecurity controls while performing work on 29 contracts and subcontracts.[28]

Morsecorp. Similarly, defense contractor MORSECORP Inc. agreed to pay $4.6 million after admitting it had failed to meet key cybersecurity requirements—including not implementing required NIST SP 800 171 controls, lacking required system security plans, and using non-compliant third-party email hosting—between 2018 and 2022 while performing Army and Air Force contracts.[29]

Aero Turbine/Gallant Capital. Likewise, last July California defense contractor Aero Turbine Inc. and private equity firm Gallant Capital Partners agreed to pay $1.75 million after admitting that from 2018 to 2020 they failed to implement cybersecurity controls and unlawfully shared sensitive defense information with an unauthorized third-party vendor in Egypt. The settlement amount likely would have been higher, but Aero and Gallant received cooperation credit for self-disclosing and taking corrective actions.[30] Also of note for the defense industry, late last year, the DOD launched its Cybersecurity Maturity Model Certification Program (CMMCP), which establishes three tiers of cybersecurity requirements for defense contractors and requires annual certification of compliance.[31]

Hill Associates. In one of the largest cybersecurity FCA settlements of 2025, Maryland IT contractor Hill ASC Inc. (Hill Associates) agreed to pay at least $14.75 million to settle allegations that between 2018 and 2023 it billed federal agencies for unqualified IT personnel, submitted claims for unauthorized cybersecurity services, charged unapproved fees, and failed to provide required prompt payment discount information under its GSA Multiple Award Schedule contract.[32]

HNFS/Centene. On February 18, 2025, Health Net Federal Services (HNFS) and its parent Centene Corporation agreed to pay over $11.25 million to settle allegations that from 2015 to 2018 they falsely certified compliance with cybersecurity requirements while administering the TRICARE health program, despite failing to scan for vulnerabilities, address known security flaws, or act on audit warnings.[33]

Illumina. A whistleblower-led suit filed in 2023 led to a settlement in which Illumina Inc. agreed to pay $9.8 million to resolve allegations that it sold federal agencies certain genomic sequencing systems with cybersecurity weaknesses. There, the Government alleged the contractor failed to incorporate product cybersecurity in its software design, development, installation, and monitoring, and falsely represented that it adhered to NIST standards.[34] Specifically, the Government alleged that from February 2016 to September 2023, Illumina's Genomic Sequencing Systems contained cybersecurity vulnerabilities and that Illumina failed to incorporate product security or correct design features that introduced those vulnerabilities.[35]

*          *          *

This year also marked growth in cybersecurity compliance requirements relevant to future FCA enforcement. The DOD finalized the DFARS Cybersecurity Maturity Model Certification (CMMC) rule in September 2025 that will result in CMMC requirements that build on existing DOD cybersecurity requirements being incorporated into DOD contracts. As the final rule is implemented, contractors whose systems will process, store, or transmit Federal Contract Information or Controlled Unclassified Information must have a current CMMC status at the level required by the solicitation, and must maintain that status throughout performance. For FCA purposes, that architecture means that cybersecurity compliance requires a series of concrete, government-facing representations at the time of proposal, award, option exercise, and performance. This creates a pathway for DOJ or relators to argue falsity and materiality where a contractor overstates cybersecurity compliance or submits inaccurate cyber-security-related information.

As DOJ's focus on cybersecurity enforcement continues to surge, companies should pay particular attention to cybersecurity requirements in government contracts. Companies can mitigate FCA cybersecurity risk by auditing cybersecurity representations against relevant FAR and DFARS requirements, having a clear response plan in the event of security incidents or data breaches, and training employees on cybersecurity best practices.

C. Trade Compliance

As discussed supra, in 2025, DOJ announced a partnership with DHS to establish the Trade Fraud Task Force to coordinate enforcement efforts against importers who fraudulently attempt to evade tariffs and other duties. One of the Task Force's enforcement vehicles is to bring FCA claims against those importers. These claims utilize the FCA's "reverse false claims" provision, 31 USC. § 3729(a)(1)(G), that creates an action against those who knowingly avoid payment of an obligation to the government. In its announcement of the Task Force, DOJ stated that it "encourages whistleblowers to utilize the qui tam provisions of the False Claims Act to alert the government to credible allegations of fraud."

Consistent with this focus on customs enforcement, DOJ in 2025 achieved several seven- and eight-figure settlements based on allegations of customs fraud.

Ceratizit. In December 2025, Ceratizit USA LLC entered a $54.4 million settlement to resolve an FCA case alleging that the company evaded customs duties by misclassifying imported goods and failing to pay required antidumping and countervailing duties. From August 2020 through March 2024, the company allegedly misrepresented that mainland Chinese-manufactured products originated in Taiwan. These products were transshipped through Taiwan to the US to evade Section 301 tariffs specifically targeting such Chinese goods. From June 2015 through March 2024, Ceratizit allegedly used incorrect Harmonized Tariff Schedule (HTS) codes to lower the duty rates applied to their imported tungsten carbide products. The company was also accused of importing merchandise without proper country-of-origin markings and failing to pay the required marking duties before domestic distribution. The qui tam whistleblower will receive a $9.25 million recovery.[36]

Allied Stone Inc. In August 2025, a Dallas-based supplier and its president agreed to pay $12.4 million to resolve allegations of evading duties on Chinese quartz surface products. The company allegedly misrepresented these imports as marble or glass to avoid higher tariffs.[37]

Evolutions Flooring Inc. In March 2025, a California importer and its owners settled for $8.1 million regarding the evasion of AD/CVD and Section 301 duties on multilayered wood flooring from China. The settlement followed a whistleblower lawsuit alleging the company falsified the country of origin and manufacturer identities.[38]

Global Plastics LLC & Marco Polo International LLC. These subsidiaries of MGI International LLC agreed in July 2025 to pay $6.8 million for allegedly failing to declare the correct country of origin and value for plastic resin imported from China. Notably, the companies received cooperation credit for voluntarily disclosing the violations.[39]

Grosfillex Inc. In July 2025, a Pennsylvania patio furniture company settled for $4.9 million over allegations it evaded duties on extruded aluminum from China. DOJ alleged the company used "sham kits" to camouflage aluminum parts and knowingly submitted false customs forms.[40]

Endless Sales/Octane Forklift. Finally, probably the most significant 2025 decision supporting the FCA's use as a vehicle for trade enforcement was Island Indus., Inc. v. Sigma Corp.[41] There, the Ninth Circuit affirmed a $26 million judgment against an importer who made false statements on customs forms to avoid duties on Chinese products. The Circuit rejected the defendant's arguments that only the Court of International Trade has jurisdiction to hear FCA claims regarding tariff enforcement and that the Tarriff Act provides the government's only remedy—to the exclusion of the FCA—for collection of duties. Island Industries thus bolsters the Government's ability to enforce trade compliance through the FCA.

D. DEI

In another example of this administration using the FCA to enforce its broader policy priorities, in 2025, the Government began using the FCA as a tool to enforce diversity, equity, and inclusion (DEI) compliance among government contractors and recipients of federal funds. Immediately after the new administration took office, President Trump issued Executive Order 14173, which revoked affirmative action mandates and directed agencies to incorporate contract clauses requiring contractors to certify that they do not operate DEI programs that violate federal anti-discrimination laws and to acknowledge that compliance with this prohibition is material to government payment decisions under the FCA. Although a federal district court briefly enjoined the EO's certification provision, the Fourth Circuit stayed the injunction, [42] and in early 2026, vacated the injunction entirely.[43] As a result, FCA-based DEI enforcement risk for contractors and other recipients of federal funds is very much alive.

As discussed supra, in May 2025, Deputy Attorney General Todd Blanche announced the Civil Rights Fraud Initiative, empowering the Department of Justice's Civil Fraud and Civil Rights Divisions to pursue FCA claims against federal-funding recipients, including government contractors, with unlawful DEI programs. The stated aim of the Initiative is to target "racist preferences, mandates, policies, programs, and activities."[44]

In July 2025, DOJ issued guidance clarifying the Government's position on what it considers DEI that violates nondiscrimination laws.[45] For example, DEI programs using "[f]acially neutral criteria" as proxies for race, sex, or other protected characteristics may violate federal civil rights laws and trigger FCA enforcement. The guidance calls out practices such as identity metrics that mask protected-class decision-making, cautioning contractors and funding recipients that such programs may threaten their contracts and funding. The guidance, by example, indicates a program "must not target 'underserved geographic areas'" if that criterion is meant "to increase participation by a specific racial or sex-based group." Although not binding, this guidance signals the Government's intent to expand FCA reach into DEI program design and execution. To avoid DEI-related FCA liability, companies should review their DEI-related programs to make sure they comport with the Administration's guidance.

By mid-2025, DOJ issued Civil Investigative Demands (CIDs) to several organizations, including companies and institutions of higher education, seeking information related to their DEI policies and practices. Reporting in December 2025 confirmed that major contractors, such as Google and Verizon, received CID requests related to DEI, underscoring the government's serious enforcement posture.[46] DOJ is scrutinizing the accuracy of nondiscrimination certifications, potentially rendering federal payments "false claims" if DEI programs impose unlawful preferences.

In April 2025, former Attorney General Bondi issued a memorandum directing the DOJ Civil Division's Fraud Section to pursue FCA investigations of false claims submitted to federal healthcare programs for "any noncovered services related to radical gender experimentation."[47] The memorandum outlines several instances of purportedly unlawful conduct, including "physicians prescribing puberty blockers to a child for an illegitimate reason (e.g., gender dysphoria) but reporting a legitimate purpose (i.e., early onset puberty) to the Centers for Medicare & Medicaid Services, and hospitals performing surgical procedures to remove or modify a child's sex organs while billing Medicaid for an entirely different procedure."[48] In response, DOJ and multiple state attorney generals have issued CIDs and subpoenas to various healthcare providers involved in providing or facilitating access to gender-affirming care for minors. As discussed infra, courts have universally quashed those subpoenas including against hospitals, physicians, telehealth companies, and pharmaceutical manufacturers.

E. Defense Contractor Fraud

One of the FCA's main goals is preventing fraud in government contracting. Unsurprisingly, then, DOJ has continued to leverage the FCA to root out fraud in government procurement, which is shown by both the quantity and size of settlements in the procurement fraud area. Consistent with prior years, many of these settlements involved the defense and national security industries. A few of these settlements, highlighted below, demonstrate the many ways allegations of procurement fraud can arise.

L3 Technologies. In May 2025, L3 Technologies agreed to pay $62 million to settle allegations that it failed to disclose accurate, current, and complete cost or pricing data in violation of the Truth in Negotiations Act related to the labor, material, and other costs for manufacturing communications equipment sold to DOD under a number of contracts between 2006 and 2014.[49] These contracts were for a variety of products required to operate drones and retrieve data for military operations and intelligence with the Air Force, Army, Navy, and other government agencies, including subcontracts with other prime vendors who manufacture drones. This alleged conduct affected claims for over 80 contracts and subcontracts.[50]

Tetra Tech EC. In January 2025, Tetra Tech EC agreed to pay $97 million to settle allegations of environmental fraud during cleanup operations at San Francisco's Hunters Point Naval Shipyard. Of this, $57 million relates to False Claims Act allegations. Whistleblowers brought suit, accusing Tetra Tech of misrepresenting soil samples and falsifying data in remediation efforts. This suit highlights that falsifying data that endangers the public can result in FCA violations and marks one of the largest FCA environmental payouts in recent years.

Lockheed Martin. Similarly, Lockheed Martin reached a settlement with the Government and agreed to pay $29.7 million to resolve allegations that it submitted defective pricing for F-35 military aircraft contracts in violation of the Truth in Negotiations Act.[51] Here, a whistleblower employed in several Lockheed Martin divisions in cost and pricing estimation filed a qui tam action in 2017.[52] The Government alleged that Lockheed Martin submitted inflated pricing proposals to obtain multiple DOD Low Rate Initial Production (LRIP) contracts, pocketing the difference in pricing. Specifically, the government contended that Lockheed Martin falsely certified during the award negotiations that it had submitted accurate pricing data. The government alleged that, had Lockheed Martin provided undisclosed suppliers' cost and pricing data in its possession, it would have awarded the LRIP contracts at lower prices.

DRI Relays. In another defense-related settlement, DRI Relays agreed to pay $15.7 million to resolve allegations that it violated the False Claims Act by supplying military parts that did not meet military specifications.[53] The Government alleged that, between 2015 and 2021, DRI improperly invoiced for military grade electrical relays and sockets, while knowing those parts had not met the testing requirements to be deemed military grade. Id. Interestingly, it was not a whistleblower but DRI's parent company, TE Connectivity, that brought these deficiencies to the Government's attention; under its disclosure obligations under FAR 52.203-13, to "timely disclose, in writing, to the agency Office of the Inspector General whenever, in connection with the award, performance, or closeout of this contract or any subcontract thereunder, the Contractor has credible evidence the Contractor has committed a violation of the civil False Claims Act[.]" (cleaned up)).

DynCorp. Finally, in another large settlement, DynCorp settled with the Government for $21 million to resolve allegations that it knowingly submitted inflated costs passed along from its subcontractor to the State Department for lodging and guard, translator, driver, and supervisor services under a contract to train Iraqi police forces, known as CIVPOL.[54] The Government originally filed a lawsuit in July 2016, contending DynCorp knowingly passed along these inflated costs for lodging and local national labor from February 2004 until February 2008.[55]

*          *          *

Needless to say, defense contractors should remain diligent in adhering to their obligations to their government customers, as this Administration will almost certainly make use of FCA enforcement to pursue even garden variety contractor fraud, particularly as the Administration and the Congress' assistance appropriates billions of additional dollars to defense for FY 2026.

F. Labor/Immigration

Consistent with the Trump Administration's broader focus on immigration enforcement, 2025 saw two FCA settlements stemming from contractors' failures to comply with E-Verify requirements incorporated into federal contracts through the Federal Acquisition Regulation (FAR). FAR 52.222-54, which is incorporated in contracts above $150,000 (for other than commercial off the shelf items) that will be performed in the United States for a period of at least 120 days, requires that federal contractors enroll in the E-Verify program within 30 days of being awarded a contract, and "verify" that all employees assigned to the contract and all "new employees" (regardless of whether they are assigned to the contract) are authorized to work in the United States. Contractors (including subcontractors) who fail to timely verify employees as contractually required by FAR 52.222-54 risk triggering FCA liability when they submit claims for payment for work performed by unverified personnel.

At the start of the year, Bollinger Shipyard LLC entered a $1.025 million settlement to resolve allegations that it used multiple subcontractors that employed personnel who were not authorized to work in the United States and billed the Coast Guard for that labor, illustrating the Government's commitment to cracking down on employment verification failures.[56]

In September, Bayonne Drydock and Repair Corporation agreed to pay approximately $4.04 million to resolve False Claims Act allegations that around 50 unauthorized workers performed work on Navy contracts. Notably, the contractor's risk manager also pleaded guilty in a separate criminal action to having knowingly hired2 unauthorized aliens.[57] This two-pronged enforcement approach is not uncommon and shows that the risks of immigration non-compliance go beyond the monetary sanctions imposed by the FCA.

To mitigate these heightened risks, contractors should be sure to understand their E-Verify obligations and evaluate their compliance. This includes conducting periodic I‑9/E‑Verify audits and enforcing requirements with lower-tier contractors.

G. CARES Act

In 2025, there were a large number of FCA settlements related to eligibility certifications in applications for loans issued and forgiven under various aspects of the CARES Act, including alleged misrepresentations regarding employee count, size and ownership, and corporate status. These cases are likely to continue to be brought in 2026, as Congress passed legislation in 2022 to extend the fraud statute of limitations for certain COVID-19 economic injury disaster loan (EIDL) programs to 10 years,[58] and to establish a 10-year statute of limitations for Paycheck Protection Program (PPP) loan fraud.[59]

Engineered Structures. Idaho construction company Engineered Structures, Inc. (ESI) faced civil fraud allegations that it received an $8.6 million PPP loan that it was not eligible to receive, in part because it failed to include temporary workers from staffing agencies in its headcount. The claims against ESI stem from a whistleblower complaint. ESI agreed to pay $5.75 million to settle the allegations without determining civil liability.[60]

YAPP USA Automated Systems. YAPP USA Automated Systems Inc., a Michigan-based corporation that is also the subsidiary of a Chinese state-owned entity, faced allegations that it received a first-draw PPP loan for which it was not eligible, due to the fact that it and its affiliates together employed more individuals than the cap, and because it was owned by a government entity. YAPP USA cooperated with DOJ's investigation by identifying individuals involved or responsible in the alleged conduct and disclosing relevant facts and documents, which resulted in a cooperation credit. Ultimately, YAPP USA agreed to pay over $14 million to settle the claims.[61]

Vix Technology. Vix Technology, an Australian company that focuses on fare-collection systems, faced allegations that it improperly received a PPP loan that it was not eligible for, due to employing more individuals globally than the cap for the loan. Without admitting to wrongdoing, Vix agreed to pay over $2.1 million to resolve the claims, with a percentage going to the qui tam relator, Blockquote, a San Francisco-based internet research and news reporting company.[62]

Carson Tahoe Health System. Carson Tahoe Health System, which owns Carson Tahoe Physician Clinics and Carson Tahoe Continuing Care Hospital, faced allegations that they were not eligible for a total of over $5 million PPP loan disbursements received in 2020, and of $2 million in 2021, due to exceeding PPP loan size limitations. The allegations were originally brought in a qui tam lawsuit. Carson Tahoe agreed to pay almost $8.9 million to settle the allegations.[63]

Herbert G. Chambers. Chambers, an American billionaire who owns a large number of car dealerships, faced allegations that his companies falsely certified that they were eligible for PPP loans that they received, as they had already reached the maximum amount of PPP funds that could be disbursed to a single corporate group ($20 million). When a bank canceled the unfunded PPP loans after learning of the $20 million cap, Chambers' companies applied for PPP loans from a second bank that ultimately funded the loans. Chambers and his companies received cooperation credit and agreed to pay around $11.8 million to settle the allegations.[64]

CoreLife Eatery. CoreLife Eatery, LLC, which operates restaurants throughout the Mid-Atlantic and the eastern Midwest regions, was alleged to have violated the FCA by falsely certifying its eligibility for a Restaurant Revitalization Fund (RRF) grant it received, where it represented that it did not have more than 20 restaurant locations despite running 29 locations. CoreLife agreed to pay over $7.8 million to resolve the allegations, with nearly $1.2 million going to the qui tam relator who initially brought the complaint alleging the FCA violation.

[1] United States Department of Justice, Office of Public Affairs, "Pfizer Agrees to Pay Nearly 60M to Resolve False Claims Allegations Relating to Improper Physician Payments by Subsidiary" (Jan. 24, 2025), https://www.justice.gov/opa/pr/pfizer-agrees-pay-nearly-60m-resolve-false-claims-allegations-relating-improper-physician.

[2] United States Department of Justice, Office of Public Affairs, "Wound Graft Company Owners Sentenced for $1.2B Health Care Fraud and Agree to Pay $309M to Resolve Civil Liability Under the False Claims Act" (Dec. 12, 2025), https://www.justice.gov/opa/pr/wound-graft-company-owners-sentenced-12b-health-care-fraud-and-agree-pay-309m-resolve-civil.

[3] United States Department of Justice, Southern District of New York, "US Attorney Announces $202 Million Settlement With Gilead Sciences For Using Speaker Programs To Pay Kickbacks To Doctors To Induce Them To Prescribe Gilead's Drugs" (Apr. 29, 2025), https://www.justice.gov/usao-sdny/pr/us-attorney-announces-202-million-settlement-gilead-sciences-using-speaker-programs.

[4] United States Department of Justice, District of South Carolina, "United States and the States of Georgia, Colorado, and South Carolina Obtain $114.5M in Judgments in a Sprawling Cancer Genetic Testing Lab Scheme" (July 17, 2025), https://www.justice.gov/usao-sc/pr/united-states-and-states-georgia-colorado-and-south-carolina-obtain-1145m-judgments.

[5] United States Department of Justice, Office of Public Affairs, "Semler Scientific Inc. and Bard Peripheral Vascular Inc. to Pay Nearly $37M to Resolve False Claims Act Allegations Relating to FloChec and QuantaFlo Devices" (Sep. 26, 2025), https://www.justice.gov/opa/pr/semler-scientific-inc-and-bard-peripheral-vascular-inc-pay-nearly-37m-resolve-false-claims.

[6] United States Department of Justice, Office of Public Affairs, "Fresno-Based Community Health System Agree to Pay $31.5 Million to Resolve Allegations of False Claims Act Violations: (May 14, 2025), https://www.justice.gov/usao-edca/pr/fresno-based-community-health-system-agree-pay-315-million-resolve-allegations-false.

[7] United States Department of Justice, Office of Public Affairs, "NUWAY Alliance Agrees to Pay $18,500,000 Settlement in Medicaid Kickbacks Scheme, False Claims Act Violations," (June 26, 2025), https://www.justice.gov/usao-mn/pr/nuway-alliance-agrees-pay-18500000-settlement-medicaid-kickbacks-scheme-false-claims-act.

[8] United States Department of Justice, Office of Public Affairs, "Walgreens Agrees to Pay Up to $350M for Illegally Filling Unlawful Opioid Prescriptions and for Submitting False Claims to the Federal Government" (Apr. 21, 2025), https://www.justice.gov/opa/pr/walgreens-agrees-pay-350m-illegally-filling-unlawful-opioid-prescriptions-and-submitting.

[9] United States Department of Justice, Southern District of New York, "Press Release, Statement Of US Attorney Jay Clayton On The Verdict In US V. Omnicare And CVS Health Corporation" (Apr. 29, 2025), https://www.justice.gov/usao-sdny/pr/statement-us-attorney-jay-clayton-verdict-us-v-omnicare-and-cvs-health-corporation.

[10]

[11] United States Department of Justice, Middle District of Florida, "VRA Enterprises Agrees To Pay Over $17 Million For Allegedly Billing Medicare For Over-The-Counter COVID-19 Tests That Were Not Provided To Beneficiaries, Or That Were Sent To Beneficiaries Months After Being Billed To Medicare" (Nov. 14, 2025), https://www.justice.gov/usao-mdfl/pr/vra-enterprises-agrees-pay-over-17-million-allegedly-billing-medicare-over-counter.

[12] United States Department of Justice, Office of Public Affairs, "Aesculap Implant Systems Agrees to Pay $38.5M to Resolve False Claims Act Allegations Related to Knee Implant Failures and Enters into a Non-Prosecution Agreement Related to the Introduction of Two Adulterated Medical Devices into Interstate Commerce" (Nov. 17, 2025), https://www.justice.gov/opa/pr/aesculap-implant-systems-agrees-pay-385m-resolve-false-claims-act-allegations-related-knee.

[13] United States Department of Justice, Office of Public Affairs, "United States Files False Claims Act Complaint Against Vohra Wound Physicians Management and Its Owner Alleging False Claims for Wound Care Services" (Apr. 4, 2025), https://www.justice.gov/opa/pr/united-states-files-false-claims-act-complaint-against-vohra-wound-physicians-management-and.

[14] United States Department of Justice, Office of Public Affairs, "Vohra Wound Physicians and its Owner Agree to Pay $45M to Settle Fraud Allegations of Overbilling for Wound Care Services" (Nov. 21, 2025), https://www.justice.gov/opa/pr/vohra-wound-physicians-and-its-owner-agree-pay-45m-settle-fraud-allegations-overbilling.

[15] United States Department of Justice, Office of Public Affairs, "Saint Vincents Catholic Medical Centers of New York Agrees to Pay $29M to Resolve Alleged False Claims Act Violations" (Feb. 14, 2025) https://www.justice.gov/opa/pr/saint-vincents-catholic-medical-centers-new-york-agrees-pay-29m-resolve-alleged-false-claims.

[16] United States Department of Justice, Office of Public Affairs, "Medicare Advantage Provider Seoul Medical Group and Related Parties to Pay Over $62M to Settle False Claims Act Suit" (Mar. 26, 2025), https://www.justice.gov/opa/pr/medicare-advantage-provider-seoul-medical-group-and-related-parties-pay-over-62m-settle.

[17] United States Department of Justice, Office of Public Affairs, "Press Release, Dana-Farber Cancer Institute Agrees to Pay $15M to Settle Fraud Allegations Related to Scientific Research Grants," December 16, 2025, https://www.justice.gov/opa/pr/dana-farber-cancer-institute-agrees-pay-15m-settle-fraud-allegations-related-scientific.

[18] United States v. Local Initiative for Healthcare for Inland Empire Health Plan d/d/a Inland Empire Health Plan, No. 5:25-cv-024444 (C.D. Cal.), Complaint, ECF 1.

[19] United States Department of Justice, Office of Public Affairs, "Press Release The United States Files False Claims Act Complaint Against Three National Health Insurance Companies and Three Brokers Alleging Unlawful Kickbacks and Discrimination Against Disabled Americans," May 1, 2025, https://www.justice.gov/opa/pr/united-states-files-false-claims-act-complaint-against-three-national-health-insurance#:~:text=The%20United%20States%20filed%20a,MA%20plans%20for%20the%20beneficiaries.

[20] US Dep't of Justice, Office of Pub. Affairs, Justice Department Sues Six Health Plans and Their Alliance for Concealing Overpayments for Military Managed Care Program (Mar. 13, 2024), https://www.justice.gov/archives/opa/pr/justice-department-sues-six-health-plans-and-their-alliance-concealing-overpayments-military

[21] US Dep't of Justice, Office of Pub. Affairs, Saint Vincents Catholic Medical Centers of New York Agrees to Pay $29M to Resolve Alleged False Claims Act Violations (Feb. 14, 2025), https://www.justice.gov/opa/pr/saint-vincents-catholic-medical-centers-new-york-agrees-pay-29m-resolve-alleged-false-claims?.

[22] US Dep't of Justice, Office of Pub. Affairs, United States Intervenes in False Claims Act lawsuit Against UnitedHealth Group Inc. for Mischarging the Medicare Advantage and Prescription Drug Programs (May 2, 2017), https://www.justice.gov/archives/opa/pr/united-states-intervenes-false-claims-act-lawsuit-against-unitedhealth-group-inc-mischarging.

[23] US Dep't of Justice, Office of Pub. Affairs, United States Intervenes in False Claims Act lawsuit Against UnitedHealth Group Inc. for Mischarging the Medicare Advantage and Prescription Drug Programs (May 2, 2017), https://www.justice.gov/archives/opa/pr/united-states-intervenes-false-claims-act-lawsuit-against-unitedhealth-group-inc-mischarging.

[24] US Dep't of Justice, Office of Pub. Affairs, Manhattan US Attorney Files Civil Fraud Suit Against Anthem, Inc., For Falsely Certifying The Accuracy Of Its Diagnosis Data (Mar. 27, 2020), https://www.justice.gov/usao-sdny/pr/manhattan-us-attorney-files-civil-fraud-suit-against-anthem-inc-falsely-certifying.

[25] US Dep't of Justice, Office of Pub. Affairs, Kaiser Permanente Affiliates Pay $556M to Resolve False Claims Act Allegations (Jan. 14, 2026), https://www.justice.gov/opa/pr/kaiser-permanente-affiliates-pay-556m-resolve-false-claims-act-allegations.

[26] Department of Justice, "Fact Sheet: False Claims Act Settlements and Judgments", https://www.justice.gov/opa/media/1424126/dl.

[27]United States Department of Justice, Office of Public Affairs, "Press Release, Georgia Tech Research Corporation Agrees to Pay $875,000 to Resolve Civil Cyber-Fraud Litigation" (September 30, 2025), https://www.justice.gov/opa/pr/georgia-tech-research-corporation-agrees-pay-875000-resolve-civil-cyber-fraud-litigation.

[28] United States Department of Justice, Office of Public Affairs, "Press Release, Raytheon Companies and Nightwing Group to Pay $8.4M to Resolve False Claims Act Allegations Relating to Non-Compliance with Cybersecurity Requirements in Federal Contracts" (May 1, 2025), https://www.justice.gov/opa/pr/raytheon-companies-and-nightwing-group-pay-84m-resolve-false-claims-act-allegations-relating.

[29] United States Department of Justice, Office of Public Affairs, "Press Release, Defense Contractor MORSECORP Inc. Agrees to Pay $4.6 Million to Settle Cybersecurity Fraud Allegations" (Mar. 26, 2025), https://www.justice.gov/opa/pr/defense-contractor-morsecorp-inc-agrees-pay-46-million-settle-cybersecurity-fraud.

[30] United States Department of Justice, Office of Public Affairs, "Press Release, California Defense Contractor and Private Equity Firm Agree to Pay $1.75M to Resolve False Claims Act Liability Relating to Voluntary Self-Disclosure of Cybersecurity Violations" (Jul. 31, 2025), https://www.justice.gov/opa/pr/california-defense-contractor-and-private-equity-firm-agree-pay-175m-resolve-false-claims.

[31] United States Department of War, Chief Information Officer, Phased Implementation of CMMC Requirements Has Begun!, https://dodcio.defense.gov/CMMC/About/.

[32] United States Department of Justice, Office of Public Affairs, "Press Release, Maryland IT Company Agrees to Pay $14.75M to Resolve Alleged False Claims" (Jul. 14, 2025), https://www.justice.gov/opa/pr/maryland-it-company-agrees-pay-1475m-resolve-alleged-false-claims.

[33] United States Department of Justice, Office of Public Affairs, "Press Release, Health Net Federal Services, LLC and Centene Corporation Agree to Pay Over $11 Million to Resolve False Claims Act Liability for Cybersecurity Violations" (Feb. 18, 2025), https://www.justice.gov/opa/pr/health-net-federal-services-llc-and-centene-corporation-agree-pay-over-11-million-resolve.

[34] Department of Justice, "Illumina Inc. to Pay $9.8M to Resolve False Claims Act Allegations Arising from Cybersecurity Vulnerabilities in Genomic Sequencing Systems" (July 31, 2025), https://www.justice.gov/opa/pr/illumina-inc-pay-98m-resolve-false-claims-act-allegations-arising-cybersecurity.

[35] Department of Justice, Settlement Agreement, https://www.justice.gov/opa/media/1409561/dl.

[36] See United States ex rel. Stover v. Ceratizit USA, et al. No. 2:22-cv-12291 (E.D. Mich.).

[37] United States Department of Justice, Office of Public Affairs, "Press Release: Allied Stone Inc. and Company Official Agree to Pay $12.4M to Settle False Claims Act Allegations Relating to Evaded Customs Duties" (Aug. 19, 2025), https://www.justice.gov/opa/pr/allied-stone-inc-and-company-official-agree-pay-124m-settle-false-claims-act-allegations?utm_medium=email&utm_source=govdelivery.

[38] United States Department of Justice, Office of External Affairs, "Press Release: Evolutions Flooring Inc. and Its Owners to Pay $8.1 Million to Settle False Claims Act Allegations Relating to Evaded Customs Duties," https://www.justice.gov/opa/pr/evolutions-flooring-inc-and-its-owners-pay-81-million-settle-false-claims-act-allegations?utm_medium=email&utm_source=govdelivery.

[39] United States Department of Justice, Office of External Affairs, "Press Release, Evolutions Flooring Inc. and Its Owners to Pay $8.1 Million to Settle False Claims Act Allegations Relating to Evaded Customs Duties" https://www.justice.gov/opa/pr/evolutions-flooring-inc-and-its-owners-pay-81-million-settle-false-claims-act-allegations?utm_medium=email&utm_source=govdelivery.

[40] United States Department of Justice, Office of External Affairs, "Press Release, Patio Furniture Company Grosfillex Inc. to Pay $4.9 Million to Resolve Allegations it Evaded Duties on Extruded Aluminum from the PRC," https://www.justice.gov/opa/pr/patio-furniture-company-grosfillex-inc-pay-49-million-resolve-allegations-it-evaded-duties?utm_medium=email&utm_source=govdelivery.

[41] 141 F.4th 1003 (9th Cir. 2025).

[42] See National Association of Diversity Officers in Higher Education v. Trump, 767 F.Supp.3d 243 (D. Md 2025); National Association of Diversity Officers in Higher Education v. Trump, No. 25-1189 (4th Cir. Mar. 14, 2025).

[43] National Association of Diversity Officers in Higher Education v. Trump, -- F.4th – (4th Cir. Feb. 6, 2026).

[44] Department of Justice, "Civil Rights Fraud Initiative" (May 19, 2025), https://www.justice.gov/dag/media/1400826/dl?inline.

[45] Department of Justice Office of the Attorney General, Guidance for Recipients of Federal Funding Regarding Unlawful Discrimination (July 29, 2025), https://www.justice.gov/opa/pr/justice-department-releases-guidance-recipients-federal-funding-regarding-unlawful.

[46] Wall Street Journal, "Justice Department Using Fraud Law to Target Companies on DEI" (December 28, 2025), https://www.wsj.com/politics/policy/trump-doj-dei-fraud-investigations-93213d52?msockid=24fe6e9406f2663c2e517bc407e067cc.

[47] Department of Justice Office of the Attorney General, "Preventing the Mutilation of American Children" (Apr. 22, 2025), https://www.justice.gov/ag/media/1402396/dl.

[48] Id.

[49] Department of Justice, "L3 Technologies Inc. Agrees to Pay $62,000,000 to Resolve False Claims Act Allegations arising from Submission of False Cost or Pricing Data on Defense Contracts" (May 22, 2025), https://www.justice.gov/opa/pr/l3-technologies-inc-agrees-pay-62000000-resolve-false-claims-act-allegations-arising.

[50] Department of Justice, Settlement Agreement, https://www.justice.gov/opa/media/1401271/dl.

[51] Department of Justice, "Lockheed Martin Corporation Agrees to Settle False Claims Act Allegations of Defective Pricing" (February 6, 2025), https://www.justice.gov/opa/pr/lockheed-martin-corporation-agrees-settle-false-claims-act-allegations-defective-pricing.

[52] Department of Justice, Settlement Agreement, https://www.justice.gov/opa/media/1388791/dl; see also United States ex rel. Girard v. Lockheed Martin Corporation, No. 4:17CV147 (E.D. Tex. 2017).

[53] Department of Justice, "DRI Relays Inc. to Pay $15.7M to Settle False Claims Act Allegations Involving the Sale of Non-Military Grade Parts to Department of Defense" (Apr. 1, 2025), https://www.justice.gov/opa/pr/dri-relays-inc-pay-157m-settle-false-claims-act-allegations-involving-sale-non-military.

[54] Department of Justice, "DynCorp Agrees to Pay $21 Million to Resolve False Claims Act Lawsuit Alleging Inflated Costs on State Department" (Apr. 9, 2025), https://www.justice.gov/usao-dc/pr/dyncorp-agrees-pay-21-million-resolve-false-claims-act-lawsuit-alleging-inflated-costs.

[55] Department of Justice, Settlement Agreement, https://www.justice.gov/usao-dc/media/1396086/dl?inline.

[56] United States Department of Justice, Office of Public Affairs, "Press Release: Bollinger Shipyard LLC Agrees to Pay $1,025,000 to Settle False Claims Act Allegations Involving Billing the Coast Guard for Employees Ineligible to Work in the United States" (January 16, 2025), https://www.justice.gov/usao-edla/pr/bollinger-shipyard-llc-agrees-pay-1025000-settle-false-claims-act-allegations-0.

[57] United States Department of Justice, Office of Public Affairs, "Press Release, Government Contractor to Pay Over $4 Million to Settle False Claims Act Allegations" (September 18, 2025), https://www.justice.gov/usao-nj/pr/government-contractor-pay-over-4-million-settle-false-claims-act-allegations.

[58] COVID-19 EIDL Fraud Statute of Limitations Act of 2022, Pub. L. No. 117-165, 136 Stat. 1363 (2022).

[59] PPP and Bank Fraud Enforcement Harmonization Act of 2022, Pub. L. No. 117-166, 136 Stat. 1365 (2022).

[60] United States Department of Justice, Eastern District of Virginia, "Idaho construction company settles paycheck protection program loan allegations" (Nov. 25, 2025), https://www.justice.gov/usao-edva/pr/idaho-construction-company-settles-paycheck-protection-program-loan-allegations.

[61] United States Department of Justice, Office of Public Affairs, "Subsidiary of Chinese State-Owned Entity to Pay $14.2M to Resolve False Claims Act Allegations Relating to Paycheck Protection Program Loan" (Feb. 19, 2025), https://www.justice.gov/opa/pr/subsidiary-chinese-state-owned-entity-pay-142m-resolve-false-claims-act-allegations-relating.

[62] United States Department of Justice, Western District of Washington, "DOJ and Vix Technology (USA) Inc. resolve allegations of Paycheck Protection Program fraud" (Mar. 19, 2025), https://www.justice.gov/usao-wdwa/pr/doj-and-vix-technology-usa-inc-resolve-allegations-paycheck-protection-program-fraud.

[63] United States Department of Justice, Eastern District of California, "Carson Tahoe Health System Agrees to Pay Over $8.8 Million to Settle Allegations Over Pandemic-Related Loans" (Mar. 24, 2025), https://www.justice.gov/usao-edca/pr/carson-tahoe-health-system-agrees-pay-over-88-million-settle-allegations-over-pandemic.

[64] United States Department of Justice, District of Massachusetts, "Herb Chambers Agrees to Pay $11.8 Million to Resolve Allegations of PPP Loan Fraud" (Apr. 9, 2025), https://www.justice.gov/usao-ma/pr/herb-chambers-agrees-pay-118-million-resolve-allegations-ppp-loan-fraud.

As FCA enforcement increases, a robust body of caselaw applying the statute has developed, as relators and the government seek creative applications of the statute and defendants push back with creative defenses. While there were notable developments in several areas last year, perhaps the most important is a challenge to the constitutionality of the FCA's qui tam provisions.

A. Constitutionality of the FCA's qui tam provisions

Recently FCA defendants have challenged the FCA's qui tam provisions under Article II of the United States Constitution. These constitutional challenges invoke three separate provisions of Article II: (1) the Vesting Clause, which provides that "[t]he executive power shall be vested in a President of the United States"; (2) the Take Care Clause, which provides that the President "shall take Care that the Laws be faithfully executed," and (3) the Appointments Clause, which allows the President to appoint "Officers" requiring Senate confirmation and which allows Congress to create positions for "inferior officers" to be appointed by the President, the courts, or federal department heads. In 2024, Judge Kathryn Kimball Mizelle of the Middle District of Florida held that the qui tam provisions violated the Appointments Clause in United States ex rel. Zafirov v. Fla. Med. Assocs., LLC.[1] Judge Mizelle reasoned that the broad powers that the qui tam provisions give relators to initiate and conduct litigation on behalf of the United States constituted an exercise of substantial authority on behalf of the United States, and under Article II only "officers" are allowed to exercise such authority.[2] Both the United States and the relator appealed to the Eleventh Circuit, which heard oral arguments on December 12, 2025. At oral argument, Eleventh Circuit Judges Robert J. Luck and Elizabeth L. Branch and Senior District Judge Federico A. Moreno of the Southern District of Florida focused on whether a qui tam relator exercises substantial executive authority and whether historical qui tam-like statutes were sufficiently analogous to the FCA's qui tam provisions.

Regardless of Zafirov's outcome, the issue of the qui tam provisions' constitutionality will likely reach the Supreme Court in the near future—especially in light of a January 2026 ruling from the Sixth Circuit reaffirming the FCA's constitutionality.[3] Aside from Zafirov, multiple Supreme Court Justices and circuit judges have suggested in non-binding opinions that the qui tam provisions violate Article II. Last year, Justice Kavanaugh, joined by Justice Thomas suggested in a concurring opinion in Wisconsin Bell, Inc. v. United States ex rel. Heath, that the "qui tam provisions raise substantial questions under Article II."[4] Similarly, in 2023, Justices Thomas and Kavanaugh both wrote separate opinions, both joined in relevant part by Justice Barrett, questioning whether Article II allows a qui tam relator to prosecute a lawsuit on behalf of the United States and suggesting that the Supreme Court should examine that issue.[5] Fifth Circuit judges Kyle Duncan and James Ho last year also wrote separate opinions urging reconsideration of Fifth Circuit precedent upholding the qui tam provisions' constitutionality.[6] Also, last May, Judge Mizelle followed her own decision in Zafirov to dismiss another qui tam case.[7]

Striking down the qui tam provisions would be a significant shock to FCA litigation practice. As discussed above, last year, FCA actions initiated by qui tam relators brought $5.3 billion in settlements, compared to only $1.5 billion in settlements for actions initiated by DOJ. Until the Supreme Court finally weighs in on the issue, defendants in qui tam actions should raise and preserve the issue of the qui tam provisions' constitutionality.

B. Rule 9(b)

Federal Rule of Civil Procedure 9(b) requires that fraud allegations be pleaded with particularity. The circuits are split on the application of Rule 9(b)'s requirements in FCA cases, and the Supreme Court has not yet weighed in. The First, Fourth, Sixth, Eight, and Eleventh Circuits require relators pleading a fraudulent scheme to also provide examples of specific false claims submitted to the government pursuant to that scheme.[8] In contrast, the Second, Third, Fifth, Seventh, Ninth, Tenth, and DC Circuits "hold that specific details of false claims are not required, and that the existence of false claims can be inferred from circumstances, including from the existence of a scheme that naturally would lead to the submission of false claims."[9]

Despite the persistent circuit split, the caselaw related to Rule 9(b)'s pleading requirements in FCA actions continued to develop in 2025.

In Sedona Partners v. Able Moving & Storage Inc., for example, the Eleventh Circuit held that plaintiffs can amend a complaint to satisfy Rule 9(b)'s requirements using facts obtained during discovery.[10] In Sedona, defendants filed a motion to dismiss the qui tam complaint and sought to stay discovery until the court resolved its motion. Concluding that discovery would not be burdensome, the district court permitted discovery to proceed. Although the defendants subsequently amended the complaint to include allegations of specific false claims based on facts obtained during discovery, in satisfaction of the particularity pleading requirement under the FCA, the district court ignored the new allegations and subsequently dismissed the amended complaint.

The Eleventh Circuit held that the district court erred in ignoring the allegations based on facts obtained during discovery and denying the motion to dismiss. Defendants argued that allowing plaintiffs to amend their otherwise deficient complaints to add facts obtained during discovery in qui tam cases would allow a qui tam plaintiff who has not suffered any injury in fact to file a pretextual lawsuit to uncover unknown wrongs in discovery. The Eleventh Circuit rejected the argument, pointing out that Rule 9(b)'s text does not restrict the ability of a plaintiff, including a relator, to amend their complaint to meet its specificity requirement after discovery. Although this ruling does not shield relators from the possibility of pre-discovery dismissals of their complaints, Rule 9(b) allows FCA relators to amend their pleadings "to reflect information gained from any source," including from discovery.

Two other 2025 cases are worth noting. First, in United States ex rel. Winnon v. Lozano, 146 F.4th 1197 (DC Cir. 2025), the DC Circuit held that allegations of kickbacks and inflated therapy classifications failed under Rule 9(b). The relator identified no specific referral agreement, tied no payment to any actual Medicare or Medicaid claim, and relied on statistical anomalies without alleging a concrete example of misclassification or explaining how the scheme operated. Likewise, in United States ex rel. Flanagan v. Fresenius Med. Care Holdings, Inc., 142 F.4th 25 (1st Cir. 2025), the First Circuit held the complaint deficient under Rule 9(b). Although the relator alleged that Fresenius used below-cost contracts and inflated Medical Director compensation to generate referrals, the relator failed to identify what Fresenius actually submitted to the government or to plead with particularity any false certification or false record made to obtain payment.

C. First-To-File Rule

Under the FCA, putative relators are prohibited from filing FCA actions that are based on the same underlying facts as an earlier-filed case. This is commonly known as the "First-To-File" rule. A key issue dividing federal appellate courts is whether this bar is jurisdictional—and can therefore deprive a court of subject-matter jurisdiction—or is merely a procedural defense. The classification of the bar as jurisdictional or non-jurisdictional carries meaningful procedural consequences. When treated as jurisdictional, challenges proceed under Rule 12(b)(1), may be raised at any time (including sua sponte), are not subject to waiver or forfeiture, and require dismissal without leave to amend. When treated as non-jurisdictional, the bar functions as a claim-processing rule, is generally raised under Rule 12(b)(6), is resolved on the pleadings, can be forfeited by parties that do not raise the issue, and allows courts to consider amendments, timing, and other factors rather than requiring automatic dismissal.

The Supreme Court last addressed the First-To-File rule during its 2015 term. In Kellogg Brown & Root Servs., Inc. v. United States ex rel. Carter,[11] it held that the bar applies only while the earlier-filed action remains pending, ending once that action is dismissed. While the court did not resolve the jurisdictional issue, multiple circuits have read Kellogg Brown & Root as treating the rule "on decidedly non-jurisdictional terms."[12]

Last year, in Rosales v. Amedisys, however, the Fourth Circuit reaffirmed its position that the bar is jurisdictional, maintaining a circuit split.[13] In so holding, the Fourth Circuit cemented the court's place in the "rapidly shrinking minority" of circuits that continue to treat the bar as depriving federal courts of subject-matter jurisdiction when a later-filed qui tam action is barred by a still-pending earlier action. The Fourth Circuit acknowledged that Kellogg Brown & Root "seemingly hinted" at a non-jurisdictional reading but declined to revisit the question because the relator had forfeited the argument by failing to raise it below.

The jurisdictional classification carries significant procedural consequences for FCA litigants. Under the minority view, violations result in immediate dismissal for lack of subject-matter jurisdiction, often without leave to amend. Under the majority view, the bar is a procedural defense subject to waiver, forfeiture, and case-specific equitable considerations.

To date, six circuits reject the jurisdictional approach to the First-To-File rule. The Fourth Circuit's decision in Rosales joins a minority of courts—along with the Fifth and Tenth Circuits—that treat the bar as jurisdictional, highlighting the narrowing divide that can materially affect how relators and defendants navigate FCA litigation.

There were several other significant decisions in 2025 relating to the First-To-File Rule.

In United States ex rel. Goebel v. Anchorage SNF, LLC, the District of Maryland applied the Fourth Circuit's Rosales framework to hold that the FCA first-to-file bar is jurisdictional and imposes a "low bar" on "fil[ing]"—requiring only that the earlier complaint put the government on notice of the essential fraudulent scheme.[14] The case involved a multi-part healthcare fraud scheme in which defendants allegedly inflated or falsified billable services to maximize reimbursement, but the court found the action barred even though the later complaint added new, specific details, including the identities of additional actors. Emphasizing that earlier complaints need not allege identical facts, the court focused on whether they would have alerted the government to investigate the scheme, treating new details and defendants as merely incremental and observing that "even if the government did not know the identity of every wrongdoer, it knew where to find all the fraud."

In United States ex rel. Olhausen v. Arriva Medical, LLC, the same relator filed a second FCA qui tam action against the same defendants while his earlier FCA case was still on appeal, seeking to replace the pending appeal with the new suit.[15] He argued that the first case was no longer "pending" because the district court had dismissed it, and that the First‑To‑File bar should not apply since he was not an opportunist piggybacking on another's case and he offered to dismiss the earlier action if the new one could proceed. The court rejected these arguments, holding that the FCA's First‑To‑File bar applies while a prior related action is pending on appeal, even if the district court dismissed it without prejudice, and that the statute provides no exception allowing the same relator to file duplicative actions based on the same alleged fraud.

In United States ex rel. Gordon v. Shiel Medical Laboratory, the Eastern District of New York addressed whether a new relator could be added by amendment nearly nine years after the case began.[16] The action was originally filed solely by a corporation that the relator, Gordon, had created to bring the qui tam suit and conceal his identity; once his identity became known, Gordon sought to join individually as a co‑relator. The key dispute was whether this constituted prohibited "intervention" under the FCA's First‑To‑File rule. The court held that because Gordon was not an original party and his later entry—regardless of whether framed as an amendment under Rule 15—was intervention, which is barred once a qui tam action is pending.

D. Public Disclosure/Original Source

The False Claims Act's public disclosure bar, which prohibits relators from pursuing claims that were previously subject to certain types of public disclosures that cover "substantially the same" information included in the allegations unless they were the original source of those disclosures, helps protect against the risk that qui tam suits will lead to parasitic exploitation of the public coffers. 31 USC. § 3730(e)(4). It operates as an affirmative defense, rather than a jurisdictional limit. Id. § 3730(e)(4)(A). Under the bar's "substantially-the-same" standard, the "critical inquiry is whether the government had enough information to investigate the case or whether the information could at least have alerted law enforcement authorities to the likelihood of wrongdoing."[17] However, even if a relator's claim was previously publicly disclosed, "they may bring a qui tam action if they were original sources identifying the alleged fraud."[18] The question of how much information must be previously disclosed for the defense to apply is fact-intensive and escapes easy generalization, making the public disclosure bar one of the most frequently litigated issues in non-intervened FCA cases.

In 2025, the DC Circuit addressed the public disclosure bar in two cases. In United States ex rel. O'Connor v. USCC Wireless Investment, Inc., the court affirmed the district court's dismissal on based on the public disclosure bar. The court held that, despite the relator having alleged new information (but only as to the continuation and mechanics of the same previously disclosed sham-entity scheme), his allegations were substantially the same as a previously filed complaint, and to qualify as an original source and get over the public disclosure bar, a relator must add significant new information, rather than minor details.[19]

In United States ex rel. O'Connor v. US Cellular Corporation by contrast,[20] the DC Circuit reversed the district court's dismissal of an FCA complaint on public disclosure grounds. The relator alleged that defendants concealed their controlling position in Advantage Spectrum, L.P. to fraudulently obtain nearly $113 million in bidding credits for license auctions conducted by the FCC. The district court dismissed this action, finding there were already FCC filings that disclosed defendants' position with Advantage, thus ruling the public disclosure bar applied to the relators' claims.

On appeal, the court reversed, finding the original source exception applied. The court held that even if the allegations are substantially the same as fraud previously disclosed, the allegations may still materially add to the publicly available information about the alleged fraud. The court explained that the relators claimed that Advantage never operated as a truly separate company and that it had an arrangement with defendants to hand over its licenses. The court held that these were facts that were not apparent from Advantage's FCC submissions. Because the relators contributed information that significantly expanded on what was publicly known, the DC Circuit overturned the dismissal and permitted the lawsuits to move forward. The court distinguished this case from the prior USCC matter, noting that the prior disclosures in USCC had been made in earlier qui tam litigation, "where other relators sketched out the relevant fraud details in significant detail." The court contrasted this to US Cellular, where the alleged prior disclosures of fraud "were made in the very FCC filings through which the putative small business obtained and retained its bidding credits."

The Eleventh Circuit also considered the public disclosure bar in United States ex rel. Smith v. Odom.[21] The relator alleged that an airport sponsor at Destin Executive Airport falsely certified compliance with FAA grant assurances, where a single owner controlled both the fixed-base operators. In seeking dismissal on public disclosure grounds, the defendant argued that years before this qui tam suit was brought, local newspapers had reported on the consolidation and the potential grant assurance violation. The district court agreed and found the public disclosure bar applied. On appeal, the court held that the media coverage was sufficient to meet the public disclosure bar, even though the allegations were not identical. The original news article described the county's grant assurances related to federal funding, noted that the federal funding came with strings attached, and explained that when Destin Jet acquired the only other fixed-base operator at the airport the county violated two of these assurances. By contrast, the relator's complaint, unlike the articles, discusses a strawman scheme and the county's actions after defendant gained control of both fixed-base operators. The court was unconvinced, holding that the allegations needed only be "substantially the same" rather than identical. It determined the expansion of allegations did not add new instances of fraudulent behavior and so could not be considered an original source. This sets a fairly high bar for relators, as their allegations must "materially add" to the previously disclosed facts.

Other significant decisions in 2025 relating to the Public Disclosure Bar include:

Lozano.[22] In United States ex rel. Winnon v. Lozano, relator's claims overlapped with a previous complaint alleging defendants' rehabilitation facility ordered an incorrect healthcare designation to all patients that would result in higher Medicare reimbursements, regardless of actual need. The relator's complaint included additional allegations that the scheme spread to several facilities, rather than only one. The DC Circuit affirmed the district court's application of the public disclosure bar, finding the central actor and scheme alleged were materially identical.

Biotronik.[23] In United States ex rel. Sam Jones Co., LLC v. Biotronik, Inc, the plaintiff-relator alleged defendant had hired a sales representative whose brother, a doctor, was implanting a high volume of Biotronik's cardiac devices. Per the relator's complaint, the representative would receive a commission from Biotronik each time his brother prescribed the device. The district court dismissed the relator's claims as barred by a prior New York Times article that discussed Biotronik's use of financial incentives to encourage doctors to use Biotronik-brand cardiac devices. The Ninth Circuit reversed, concluding that the complaint alleged new allegations—specifically, the employment of doctors' family members as sales representatives and violations of the Stark Law and the AKS.

Blair Pharmacy.[24] In United States ex rel. Schnupp v. Blair Pharmacy, relator brought suit, alleging the defendant was knowingly submitted false claims to Medicare and Tricare. Defendant argued relator's claims were barred because they relied on a prior civil complaint from two years prior, evidence the government gathered during its investigation, and the superseding indictment the government previously filed against defendant. The district court found that neither the prior complaint nor the government investigation barred the relator from bringing his claims because the government was not a party in the prior suit and the government's investigation was not public.

E. Materiality

Materiality continued to be a hotly litigated issue in 2025, particularly in the wake of Universal Health Servs., Inc. v. United States ex rel. Escobar.[25] In Escobar, the Supreme Court clarified the standard for what constitutes a material misrepresentation under the FCA. If a relator is alleging fraud under an implied-certification theory based on statutory, contractual, or regulatory noncompliance, "failure to follow a 'minor or insubstantial' requirement will not suffice to show materiality."[26] Instead, the provision at issue must be "so central" to the services provided that the Government "would not have paid these claims had it known of these violations."[27]

The Supreme Court identified three factors in assessing materiality: "(1) whether the government expressly designates compliance with a particular statutory, regulatory, or contractual requirement as a condition of payment; (2) the government's response to noncompliance with the relevant contractual, statutory, or regulatory provision; and (3) whether the defendants' alleged noncompliance was minor or insubstantial."[28]

In 2025, courts continued to clarify Escobar's ruling on materiality. In United States ex rel. Conrad v. Rochester Regional Health,[29] for example, a relator filed an FCA action in the Western District of New York against Rochester Regional Health and United Memorial Medical Center (collectively, "RRH"), alleging that RRH submitted thousands of claims for payment despite knowingly failing to report cases of adverse reactions to COVID-19 vaccinations to the US Vaccine Adverse Event Reporting System (VAERS). The relator alleged that had the Centers for Disease Control and Prevention (CDC) known RRH was not properly submitting reports to VAERS, a condition of payment in the provider agreement, it would not have accepted the claim. Denying the defendant's motion to dismiss, the court reasoned that, because the provider agreement specifically addressed the issue and linked it to payment, the term was material.

Similarly, in United States ex rel. Hitrost, LLC v. Study Across the Pond, LLC,[30] a relator brought a False Claims Act action in the District of Massachusetts against Study Across the Pond, LLC, a student recruitment company, alleging that it caused foreign universities to submit false claims by entering into contracts that violated the Incentive Compensation Ban (ICB) under the US federal student aid program, which prohibits compensation for recruitment. The relator alleged that Study Across the Pond engaged in a scheme to induce clients to compensate it for recruitment services, even though it did not qualify as a licensed provider. The relator alleged that had the government known Study Across the Pond was not a qualified recruiter, it would have been a violation of the ICB—making that fact material.

The court held that the relator had sufficiently pleaded materiality. It reasoned that the Department of Education had an explicit reference to the ICB, and that had the defendant not certified that it complied with the ICB, it could not have been paid. Despite the Department of Education's decision to continue disbursing funds after being notified of the violations, the court held that materiality was nonetheless adequately pleaded, noting there is no evidence the Department had actual knowledge of the violations, and that actual knowledge itself is not dispositive.

Finally, in Kousisis v. United States,[31] the government charged a contractor's president, with wire fraud and conspiracy to commit wire fraud under 18 USC. §§ 1343, 1349, based on a fraudulent inducement theory. The government alleged that Kousisis' company misrepresented that a disadvantaged business enterprise would perform work for contracts requiring use of a disadvantaged business enterprise. Id. The defendant argued that despite not actually using a disadvantaged business enterprise, it delivered the entire "economic benefit of the bargain" to the counterparty on the contract and that any misrepresentation was therefore not made with intent to defraud. The Supreme Court held that intent to defraud does not require intent to deprive one's victim of economic value, resting in large part on the government's assurance that criminal fraud has a substantial materiality requirement equivalent to the FCA requirement set forth in Escobar.

Justice Thomas's concurring opinion emphasized the need for lower courts to hold the government to this assurance. In particular, he argued that government regulators are often willing to overlook violations of contract requirements. As he put it, "if [disadvantaged business enterprise] fraud is so prevalent that the Government would have to assume a significant number of its contractors violate contract provisions requiring [disadvantaged business enterprise] compliance, that fact could cast further doubt on those provisions' materiality.[32] FCA defendants are likely to draw on Justice Thomas's concurrence for future materiality arguments.

F. False Claims/Obligations

Falsity under the False Claims Act (FCA) refers to the submission to the federal government of "false or fraudulent" claims for payment, or of documents seeking the avoidance of a government obligation.[33] The FCA does not expressly define "false or fraudulent." Courts therefore distinguish between factual falsity, which occurs when a claimant affirmatively misrepresents the quality or nature of goods or services provided, and legal falsity, which involves a claimant falsely certifying compliance with statutory, regulatory, or contractual requirements.

In 2025, the Supreme Court clarified what constitutes a "claim" under the FCA. In Wisconsin Bell v. United States ex rel. Heath,[34] the Court unanimously held that an allegation that Wisconsin Bell had overcharged school districts for services under the E-rate program, which provides subsidized telecommunications services for schools and libraries, was a "claim" under the FCA. Wisconsin Bell had argued that since the Universal Service Fund (USF), which administers the E-rate program, was a private entity, the alleged overcharges did not constitute an FCA claim. The Supreme Court rejected this argument—holding that because the USF was partially funded by funds from the US Treasury, the alleged overcharges constituted a false claim under the FCA.

On the other hand, the DC Circuit's decision in United States ex rel. Kini v. Tata Consultancy Servs., Ltd. [35] narrowed the limits of falsity in the reverse false claims context. There, the relator alleged that Tata avoided obligations to the government by underpaying H-1B workers, thereby reducing payroll taxes, and by applying for cheaper visas to avoid higher H-1B application fees. The court rejected these theories noting that the FCA requires an existing, legally enforceable obligation "to pay or transmit money or property to the Government." It held that Department of Labor wage regulations require payment to employees, not to the government, so they do not create an FCA obligation. The court also held that immigration rules require employers to pay fees only for visa applications they actually submit; because Tata never applied for H‑1B visas, it had no duty to pay higher H‑1B fees. Without a government‑owed obligation, there was no FCA falsity.

In general, courts continue to narrow the scope of FCA falsity, emphasizing that not every regulatory or documentation violation constitutes a false claim and that, in many circuits, opinions or discretionary judgments—such as medical necessity determinations—are not "false" absent an objectively verifiable falsehood or a concrete obligation owed to the government. In line with the DC Circuit's reasoning in Kini, FCA liability increasingly hinges on whether the claimant's statement contradicts known facts or avoids a specific, legally enforceable payment obligation. These decisions reinforce the importance for plaintiffs of providing clear evidence of falsity at the pleading stage and suggest that the failure to plead falsity can be a successful avenue of attack for defendants.

G. Scienter

After years of litigation, in 2023, the Supreme Court in United States ex rel. Schutte v. SuperValu Inc.[36] unanimously held that the FCA's scienter element refers to the defendant's knowledge and subjective belief about the falsity of claims submitted to the government, and not what an objectively reasonable person might have known or believed. In the years since, lower courts have been tasked with applying SuperValu. In 2025, the Fifth Circuit grappled with applying both SuperValu and Escobar's materiality requirement.

In Montcrief v. Peripheral Vascular Associates, P.A., the Fifth Circuit determined whether courts were required to extend the FCA's scienter requirements to knowledge of the materiality of false claims.[37] Defendants were accused of submitting bills to Medicare that included a false certification that the services were "medically necessary." The district court held at summary judgment that the claims were false and that defendants knew of their falsity when submitting the claims. At trial, defendants asked the district court to require the jury to determine whether they had submitted the false claims to the government "with knowledge that the falsity of the claim was material to the Government," but the district court rejected that request.[38]

On appeal, defendants argued that, under Escobar, discussed below, scienter requirements extend to knowledge of materiality; in other words, to convict a defendant of fraud under the FCA, a finder of fact must determine not only that the false claims submitted to the government were material, but also that the defendant submitted the false claims with knowledge that the falsity of the claim was material to the government.[39]

The Fifth Circuit, however, distinguished between cases like Escobar, which involved "'fraudulent' misrepresentations by omission rather than claims that were outright 'false,'" and SuperValu, which involved outright falsehoods. The Circuit concluded that in cases involving outright falsehoods, knowledge of falsity is sufficient—a finder of fact need not determine that the defendant also had knowledge of the materiality of the falsity to the government.

In Montcrief, a physician knowingly and falsely certified the medical necessity of a service, resulting in an outright falsehood rather than a fraudulent misrepresentation by omission. As such, the FCA's scienter requirement was met regardless of the physician's subjective knowledge of the materiality of the false claim.[40] It remains unclear whether Escobar will be read to extend the materiality element in cases involving misrepresentations by omission.

Other significant 2025 cases addressing the FCA's scienter element include:

In United States ex rel. Sisselman v. Zocdoc, Inc., a relator brought a qui tam action against Zocdoc alleging that its pricing model violates the Anti-Kickback Statute and the FCA, but the action was dismissed. [41] On appeal, the relator argued that the district court erred and that Zocdoc's booking fee was actually an improper referral fee. But the DHS Office of the Inspector General had issued advisory opinions finding that Zocdoc's practices did not violate the AKS, on which Zocdoc relied in engaging in the challenged practices. Absent any evidence to the contrary, the Second Circuit ultimately found that the relator failed to adequately allege scienter under the FCA and the AKS.

In United States ex rel. Omni Healthcare Inc. v. MD Spine Solutions LLC, a medical provider brought a qui tam action against MD Labs, a clinical laboratory, alleging the submission of medically unnecessary tests.[42] While the relator alleged that MD Labs ignored the risk that the tests were medically unnecessary, the First Circuit noted that MD Labs was relying on the medical provider's determination of medical necessity. Absent any evidence that the reliance was improper, the First Circuit found that MD Labs was able to rely on a medical provider's determination of necessity and, accordingly, found that the relator failed to establish MD Labs' scienter necessary to find a violation of the FCA.

In United States ex rel. Streck v. Eli Lilly & Co., a relator brought a qui tam action against Eli Lilly alleging that it falsely lowered Average Manufacturer Prices (AMPs) reported to the government for Medicaid-covered drugs, resulting in underpayments.[43] On appeal, Eli Lilly argued that it made reasonable assumptions in its AMP methodology, especially with regard to post-sale price increases for the covered drugs. The Seventh Circuit, however, found that the jury was reasonable in finding Eli Lilly's interpretations of law objectively unreasonable. The Seventh Circuit also noted that Eli Lilly executives certified AMP submissions despite consistently disavowing any knowledge of the AMP methodology. In the end, the Seventh Circuit affirmed the jury's finding that Eli Lilly acted with scienter.

H. Causation

In 2025, the most significant development on the FCA's causation requirement occurred in the healthcare context, where courts refined the causation standard establishing that a claim "resulted from" a violation of the AKS. Most notably, the First Circuit joined the alignment with a growing majority of courts requiring a strict "but-for" causation standard for FCA claims predicated on AKS violations.

In United States v. Regeneron Pharmaceuticals, Inc,[44] the First Circuit, in affirming the district court's decision below, held that in order to establish causation under the AKS's 2010 amendment, the government must plead and prove that a violation was the but-for cause of a subsequent claim for payment. Interpreting the phrase "resulting from" according to its ordinary meaning, the court concluded[45] that the statute requires a showing that the claim would not have been submitted but for the illegal kickback. This decision places the First Circuit alongside the Sixth, leaving the Third Circuit as the outlier with its more lenient "link" or "connection" standard.

The First Circuit quickly applied its Regeneron holding later in the year in United States ex rel. Flanagan v. Fresenius Med. Care Holdings, Inc,[46] where it affirmed the dismissal of a qui tam action on the grounds that the relator failed to adequately plead that alleged kickbacks were the actual cause of the claims submitted to the government, reinforcing that temporal proximity alone is insufficient to survive a motion to dismiss under the new standard. The decision underscores that allegations of temporal proximity, referral volume, or business relationships, without more, are insufficient to satisfy Rule 9(b) under the First Circuit's newly adopted causation standard.

I. Damages/Civil Penalties

Under the FCA, damages are equal to the loss the government sustained because of the false claim multiplied by three. Moreover, independent of damages, violators of the FCA are also liable for per-violation civil penalties adjusted for inflation—currently ranging from not less than $14,308 and not more than $28,619.[47]

A court's approach in assessing damages under the FCA depends on the circumstances. In general, damages should place the government in the same position as it would have been if the defendant's claims had not been false.[48] In FCA cases where the government received no tangible benefit, courts typically calculate damages as the full amount the government paid based on materially false statements.[49] In cases where the court determines that the government received some benefit, courts may use a "benefit of the bargain" analysis to calculate damages—the difference between what the government should have received and what it actually received.[50] Courts approach these measures on a case-by-case basis under the notion that damages should be liberally measured to effectuate the remedial purposes of the FCA and afford the government full recovery.[51]

Several 2025 cases grappled with the appropriate approach in calculating FCA damages. In United States ex rel. Behnke v. CVS Caremark Corp.,[52] the Eastern District of Pennsylvania assessed pre-trebling damages of $95 million in a case involving pharmacy benefits managers who caused Part D sponsors to misrepresent prescription drug costs to Medicare. The court rejected CVS's "benefit of the bargain" argument because FCA damages were measured solely by the amount the government overpaid as a result of the falsely reported prices; since the inflated claims caused the government to subsidize drug costs in excess of what was actually paid to pharmacies, any services or value the government claimed to have provided were irrelevant to the damages calculation. It then determined that 513 false claims had been knowingly caused by Caremark, and it imposed a $9,500 civil penalty per claim—near the top of the applicable statutory range in place during the time of the violations—resulting in an additional $4,873,500 to the $95 million in actual damages. The court also found that the combined treble damages and penalties were proportionate to the seriousness of the fraud and therefore did not violate the Eight Amendment's excessive fines clause.

In United States ex rel. Heath v. Wisconsin Bell,[53] the Eastern District of Wisconsin on remand from the Supreme Court emphasized that damages should equal the gap between the contracted-for value and the actual value received. As discussed supra, Wisconsin Bell involved fraud on the E-Rate Program—a federal initiative subsidizing 20–90% of telecommunications and internet services for eligible schools and libraries. The court concluded that the entire amount of E‑rate subsidies Wisconsin Bell received constituted the government's loss, because the E-rate Program is funded through the Universal Service Fund, a congressionally created mechanism financed by mandatory carrier contributions and overseen by the FCC, making all disbursed funds effectively "provided" by the federal government. Under the program's Lowest Corresponding Price rule, carriers must offer schools and libraries the lowest rate they charge similarly situated non‑residential customers for similar services, a requirement Wisconsin Bell falsely certified it complied with. The court reasoned that had Wisconsin Bell truthfully disclosed its noncompliance with the Lowest Corresponding Price rule, the subsidies would have been denied, making the full amount of the subsidies—rather than any difference between compliant and noncompliant pricing—the proper measure of compensatory damages. Thus, the court held that the government's injury equaled the total subsidies paid.

In United States ex rel. Taylor v. Healthcare Associates of Texas, LLC,[54] the court held that the FCA's per‑claim civil penalties, which would have totaled nearly $300 to $600 million amended to an unconstitutionally excessive fine under the Eighth Amendment as applied. Although the jury found 21,844 false claims and about $2.8 million in actual damages, the court concluded the statutory minimum penalty, over 100 times the harm, was grossly disproportionate under the Eighth Amendment. The court emphasized that the case involved regulatory billing violations rather than fictitious services or broader criminal conduct. It therefore reduced the civil penalty to three times actual damages, aligning penalties with constitutional limits.

In Island Industries, Inc. v. Sigma Corp.[55] (also discussed supra), the Ninth Circuit held that damages in a customs-related FCA action can be measured by "the difference between what the defendant should have paid the government and what the defendant actually paid the government." The court held that damages under the FCA were properly measured as the difference between what Sigma should have paid in antidumping duties and what it actually paid, meaning the full amount of duties Sigma unlawfully avoided. Because Sigma imported welded outlets subject to antidumping duties but paid none, the government was deprived of money, satisfying the FCA's damages requirement. Thus, the jury's award—over $8 million before trebling—was supported by evidence showing Sigma's nonpayment of required duties.

J. Government Dismissals

The FCA gives the government broad authority to intervene and dismiss actions filed by qui tam relators. In Polansky v. Executive Health Resources,[56] the Supreme Court held that the government could file a motion to dismiss a qui tam action under the FCA over the objections of the relator at any point after it has intervened in the suit,[57] as long as there is notice and an opportunity for a hearing, and the government shows that the qui tam action would not fulfill its purpose of vindicating the government's interests.[58]

In 2018, DOJ issued a memorandum providing guidance on when the government should exercise its power to dismiss a qui tam action known as the Granston Memo, named after former Civil Fraud Section Director Michael Granston. In summary, the Granston Memo establishes a non-exhaustive list of seven factors to consider when determining whether to dismiss a qui tam action: (1) curbing meritless qui tam action; (2) preventing parasitic or opportunistic qui tam actions; (3) preventing interference with agency policies and programs; (4) controlling litigation brought on behalf of the United States; (5) safeguarding classified information and national security interests; (6) preserving government resources; and (7) addressing egregious procedural errors.[59] While government dismissals are still rare, DOJ has incorporated the Granston Memo factors and guidance into Title 4 of the Justice Manual, where it continues to be valid FCA enforcement guidance.[60]

In 2024, the Fourth Circuit clarified what Polansky required with respect to showing whether a qui tam action "vindicated" the government's interest in Doe v. Credit Suisse AG.[61] First, in a Rule 41(a)(1) motion to dismiss prior to an answer being filed, the government is entitled to "even greater deference" than otherwise "since no court order is required."[62] And second, while a "hearing" is required, this requirement is satisfied through consideration of written submissions, in part because of this "even greater deference," and in part because other provisions in the FCA requiring hearings can be satisfied through written submissions.[63]

In 2025, the Fifth Circuit adopted Doe's "greater deference" standard in Vanderlan v. United States.[64] There, the government argued that, with respect to a Rule 41(a)(1) motion to dismiss prior to an answer being filed in an FCA case, a court has "no discretion to deny dismissal absent a claim that the Constitution forbids it."[65] The Fifth Circuit agreed, affirming the reasoning in Doe and finding that, during such a hearing (which may be done via written submissions alone), the government need only show that a qui tam action would not vindicate the government's interests—it need not show that the claims alleged in the qui tam were not meritorious.[66]

K. Procedural Issues

District courts also adjudicated a number of unique procedural issues related to FCA actions in 2025. We discuss a few of the most noteworthy decisions below.

1. Relator's Power to Remove the United States as Plaintiff

The Eastern District of Virginia ruled in Day v. Boeing[67] that a relator could not remove the United States as intervenor-plaintiff in a qui tam action. The district court noted that there was no statutory power, nor any court decision, which could grant a relator the ability to remove the United States as intervenor-plaintiff.[68] In Day, the plaintiff argued that, because DOJ represents both the United States and the Defense Logistics Agency (which was also named as a defendant), the Attorney General and DOJ must be removed for conflict of interest. See id. at 561–62. The Court rejected this, pointing out that the Attorney General and DOJ only serve the United States; however, courts still had discretion to remove individual government attorneys where there exists a genuine conflict of interest.[69]

2. CID Challenges

In QueerDoc, PLLC v. DOJ,[70] the Western District of Washington considered issues related to sealing of documents and quashing of an administrative subpoena in connection with a DOJ investigation into FCA violations related to gender-affirming care. There, the subpoena respondent, QueerDoc, a small telehealth provider providing gender-affirming care but which did not submit claim to any insurance program including government insurance programs, moved to quash a DOJ administrative subpoena seeking QueerDoc's patient and billing information as part of a putative investigation into, among other things, whether providers of gender-affirming care violated the FCA by submitting false diagnosis claims to Medicaid.

As an initial matter, the court denied QueerDoc's motion to seal their motion to quash. The court noted that "despite legitimate safety concerns," the public's right to transparency in proceedings challenging executive action warranted public disclosure of the motion to quash.[71] Although there was a legitimate risk of business harm and embarrassment in allowing the motion to quash to remain unsealed, there were no specific factual findings that overcame the public's right to transparency, especially where the government already disclosed information related to the case that had the same risk of harm.[72]

On the merits, however, the court granted QueerDoc's motion to quash on the ground that the subpoena had been issued for an improper purpose.[73] First, the Court denied the government's argument "that courts should not examine the government's motivations behind a facially valid investigation," finding instead that Ninth Circuit precedent explicitly permits a court to review administrative subpoenas for alleged improper purposes, provided that a recipient makes an adequate showing of bad faith or improper purpose."[74] Based on public statements by the White House and DOJ about the investigation, the court held that DOJ had issued the subpoena not for the legitimate purpose of investigating wrongdoing, but for the improper purpose of advancing the administration's goals of ending treatment for medical gender dysphoria. Especially relevant to the Court's determination was the fact that while DOJ purported to be investigating violations of the FCA for submitting false diagnosis claims to Medicaid, QueerDoc did not, in fact, submit any claims to Medicaid or any other insurer. According to the court, this "mismatch between DOJ's stated investigation and QueerDoc's actual operations further reveals the subpoena's pretextual nature."[75]

Several other courts have also granted motions to set aside pretextual, overbroad, or otherwise improper subpoenas in connection with FCA investigations into gender-affirming care. For example, the Western District of Washington in September 2025 set aside a subpoena demanding personnel files and patient information from a children's hospital in Seattle offering gender-affirming care where it determined that the government could not establish that it had a realistic expectation that it would uncover information relevant to a federal healthcare offense, and that the subpoena was in fact not issued to investigate such an offense.[76] Other subpoenas issued to healthcare providers providing gender-affirming care were also dismissed or limited in Massachusetts[77] and Pennsylvania[78] in 2025.

3. Intersection of Civil and Criminal FCA Enforcement

A significant dynamic in government fraud enforcement is the overlap between civil and criminal liability under the FCA. Criminal prosecutions for fraud against federal programs can produce factual admissions or judgments and can develop evidence that can then be used to establish liability or collateral estoppel in civil FCA actions, enabling the government to leverage criminal findings in parallel FCA proceedings. It is common for the government to pursue parallel civil and criminal actions, sometimes simultaneously, to maximize recovery and deterrence. One example of this was Patel v. United States, in which the defendants pleaded guilty to criminal fraud involving fraudulent Medicare billings.[79] Following their guilty pleas, the government intervened in the qui tam action and obtained summary judgment against the defendants, relying on collateral estoppel from their criminal admissions. In upholding that judgment, the Third Circuit held, as a matter of first impression, that the Sixth Amendment does not require defendants to be advised of potential collateral FCA consequences.[80]

[1] 751 F.Supp. 3d 1293 (M.D. Fla. 2024). The court did not reach arguments based on the Vesting and Take Care Clauses.

[2] Id. at 1322.

[3] Order on Petitions for Permission to Appeal at 1-2, In re TriHealth, Inc. et al., Nos. 25-0306/0307 (6th Cir. Jan. 9, 2026).

[4] 604 US 140, 167 (2025) (Kavanaugh, J., concurring).

[5] United States ex rel. Polansky. v. Executive Health Res., Inc., 599 US 419, 449 (Thomas, J., dissenting) ("The FCA's qui tam provisions have long inhabited something of a constitutional twilight zone."); id. at 442 (Kavanaugh, J., concurring).

[6] United States ex rel. Gentry v. Encompass Rehabilitation Hosp. of Pearland, L.L.C., 157 F.4th 758, 766 (5th Cir. 2025) (Ho, J. concurring); United States ex rel. Moncrief v. Peripheral Vascular Assocs., P.A., 133 F.4th 395, 410-11 (Duncan, J., concurring) (5th Cir. 2025).

[7]    United States ex rel. Gose v. Native Am. Srvs. Corp., No. 8:16-cv-03411-KKM-AEP (M.D. Fla. May 29, 2025).

[8] See Petition for Writ of Certiorari, United States ex. rel. Owsley v. Fazzi Associates, Inc., No. 21-936 at 20-25 (Dec. 21, 2021).

[9] Id. at 11; see also id. at 11-20.

[10] See 146 F.4th 1032, 1043 (11th Cir. 2025).

[11] 575 US 650 (2015).

[12] See Stein v. Kaiser Found. Health Plan, Inc., 115 F.4th 1244, 1247 (9th Cir. 2024) (en banc); United States ex rel. Heath v. AT&T, Inc., 791 F.3d 112, 121 (DC Cir. 2015); United States ex rel. Hayes v. Allstate Ins. Co., 853 F.3d 80, 85 (2d Cir. 2017).

[13] 128 F.4th 548 (4th Cir. 2025).

[14] United States ex rel. Goebel v. Anchorage SNF, LLC, No. CV JKB-17-00722, 2025 WL 2898087 (D. Md. Oct. 10, 2025).

[15] United States ex rel. Olhausen v. Arriva Med., LLC, 781 F. Supp. 3d 1315 (S.D. Fla. 2025).

[16] United States ex rel. Gordon v. Shiel Med. Laboratory, No. 16-CV-1090 (NGG) (TAM), 2025 WL 949432 (E.D.N.Y. Mar. 29, 2025).

[17] United States ex rel. O'Connor v. USCC Wireless Inv., Inc., 128 F.4th 276 (DC Cir. 2025) (cleaned up; internal citation and quotations omitted).

[18] Id. (cleaned up).

[19] See id.

[20] United States ex rel. O'Connor v. US Cellular Corp., 23-7041 (DC Cir. Sept. 26, 2025).

[21] 2025 WL 2424425 (11th Cir. Aug. 22, 2025).

[22] United States ex rel. Winnon v. Lozano, 146 F.4th 1197 (DC Cir. 2025)

[23] United States ex rel. Sam Jones Co., LLC v. Biotronik, Inc., 152 F.4th 946 (9th Cir. 2025)

[24] United States ex rel. Schnupp v. Blair Pharmacy, 2025 WL 375927 (D. Md. Jan. 28, 2025).

[25] 579 US 176 (2016).

[26] United States ex rel. Taylor v. Boyko, 39 F.4th 177 (4th Cir. 2022) (citing Escobar, 579 US at 194).

[27] Escobar, 579 US at 194.

[28] United States ex rel. Yu v. Grifols USA, LLC, 2022 WL 7785044, *2 (2d Cir. 2022) (discussing Escobar, 579 US 176 (2016)).

[29] 2025 WL 1651787 (W.D.N.Y. June 11, 2025).

[30] 2025 WL 871024 (D. Mass. Mar. 19, 2025).

[31] 605 US 114 (2025).

[32] Id. at 143-44 (Thomas, J., concurring).

[33] 31 USC. § 3729(a)(1).

[34] 604 US 140 (2025).

[35] 146 F.4th 1184 (DC Cir. 2025).

[36]598 US 739 (2023).

[37] 133 F.4th 395 (5th Cir. 2025).

[38] See id.

[39] Id. at 407.

[40] Id. at 408.

[41] United States ex rel. Sisselman v. Zodoc, Inc., No. 24-2807, 2025 WL 1100601 (2d. Cir. Apr. 14, 2025).

[42] United States ex rel. Omni Healthcare Inc. v. MD Spine Solutions LLC, 160 F.4th 248 (1st Cir. 2025).

[43] United States ex rel. Streck v. Eli Lilly & Co., 152 F.4th 816 (7th Cir. 2025).

[44] 128 F.4th 324 (1st Cir. 2025).

[45]128 F.4th 324 (1st Cir. 2025).

[46] 142 F.4th 25 (1st Cir. 2025).

[47] 31 USC. § 3729.

[48] E.g., United States v. Woodbury, 359 F.2d 370, 379 (9th Cir. 1966).

[49] See United States ex rel. Feldman v. van Gorp, 697 F.3d 78, 88 (2d Cir. 2012) ("[W]here there is no tangible benefit to the government and the intangible benefit is impossible to calculate, it is appropriate to value damages in the amount the government actually paid to the Defendants"); see also United States ex rel. Jackson v. DePaul Health Sys., 454 F. Supp. 3d 481, 494-98 (E.D. Pa. 2020) (noting that the full-payment damages approach is particularly applicable in worthless services cases, where the performance is so deficient that it is equivalent to no performance at all).

[50] E.g., van Gorp, 697 F.3d at 88.

[51] E.g., United States ex rel. Concilio De Salud Integral De Loiza, Inc. v. J.C. Remodeling, Inc., 962 F.3d 34, 42 (1st Cir. 2020) (quoting S. Rep. No. 96-615, at 4 (1980)) (noting that the legislative history of the FCA reveals there is no "single rule" governing damages).

[52] 798 F. Supp. 3d 515 (E.D. Pa. 2025).

[53] 2025 WL 3033792 (E.D. Wis. Oct. 29, 2025).

[54] 2025 WL 624493 (N.D. Tex. Feb. 26, 2025).

[55] 151 F.4th 1003 (9th Cir. 2025).

[56] 599 US 419 (2023).

[57] Id. at 429-30.

[58] See id. at 436, 438.

[59] Memorandum from Michael D. Granston, Director, United States Department of Justice, Commercial Litigation Branch, Fraud Section, on Factors for Evaluating Dismissal Pursuant to 31 USC. 3730(c)(2)(A) (Jan. 10, 2018).

[60] United States Department of Justice, Justice Manual § 4-4.111.

[61] 117 F.4th 155 (4th Cir. 2024).

[62] Id. at 161.

[63] Id. at 161-62.

[64] 135 F.4th 257 (5th Cir. 2025).

[65] Id. at 267.

[66] Id. at 268.

[67] 777 F. Supp. 3d 553 (E.D. Va. 2025).

[68] Id. at 570.

[69] See id. at 586, 586 n.20.

[70] 807 F. Supp. 3d 1295 (W.D. Wash. 2025).

[71] Id. at 1299-1300.

[72] See id.

[73] Id. at 1303-04.

[74] Id. at 1302.

[75] Id. at 1302.

[76] In re Subpoena Duces Tecum No. 25-1431-016, 2:25-mc-00041-JHC, 2025 WL 3562151 (W.D. Wash. Sep. 3, 2025).

[77] In re Administrative Subpoena No. 25-1431-019, 800 F.Supp.3d 229 (D. Mass 2025).

[78] In re Subpoena No. 25-1431-014, 810 F.Supp.3d 555 (E.D. Pa. 2025); In re UPMC Subpoena, 2:25-mc-01069-CB, 2025 WL 3724705 (W.D. Pa. Dec. 24, 2025).

[79] Patel v. United States, 156 F.4th 342 (3d Cir. 2025).

[80] Id. at 350 ("defense counsel's failure to advise a client pleading guilty about the collateral consequence of possible civil liability under the False Claims Act based on the same criminal conduct does not violate the Sixth Amendment.")

Many states have adopted FCA statutes that parallel the federal FCA, allowing states to pursue false claims involving state funds. While these statutes historically focused on Medicaid and healthcare fraud, several states have expanded their reach beyond traditional programs, covering municipal contracts, grants, and other public expenditures.

Emerging legislative trends also reflect heightened scrutiny of private equity (PE) and investor ownership in healthcare. In 2025, California enacted AB 1415 and SB 351, imposing stricter oversight of PE, hedge funds, and management services organizations in healthcare transactions to safeguard clinician autonomy and mitigate risks associated with investor‑driven practices.[1] California’s SB 351 prohibits PE firms from making hiring decisions regarding clinical staff, directing coding or billing practices, interfering with professional judgment, or exercising authority over overall patient care.[2] Massachusetts enacted H.5159, which imposes notice and reporting requirements on PE investments in healthcare and explicitly extends liability under the Commonwealth’s FCA statute to PE owners of healthcare providers.[3] Maine passed a law prohibiting PE firms from acquiring or increasing ownership of hospitals until June 2029 and restricting their operational control over hospitals[4] Oregon enacted SB 951, which limits PE firms’ control over clinical staff hiring and staffing levels, as well as policy and price setting for clinical services.[5]

In 2025, Medicaid Fraud Control Units (MFCUs) remained central to state-level enforcement of the False Claims Act in healthcare and the integrity of Medicaid programs in particular. The year saw record results, with nearly $2 billion in combined criminal and civil recoveries, including 1,185 convictions and 674 civil settlements and judgments.[6] In Texas, the state’s MFCU played a key role in major healthcare fraud enforcement, resulting in 123 arrests and 180 indictments in 2025 and recoveries of more than $125 million for the state through fraud prosecutions, reflecting local enforcement coordination with broader federal efforts.[7] The Texas MFCU was highlighted for its central role in one of the largest health care fraud takedowns in the country’s history, charging defendants involved in over $177 million in fraudulent billings and illegal kickbacks.[8]     

[1] Cal. Assemb. B. 1415, ch. 641, 2025–26 Reg. Sess. (Cal. 2025); Cal. Sen. B. 351, ch. 409, 2025–26 Reg. Sess. (Cal. 2025).

[2] S.B. 351 (Cal. 2025).

[3] H. 5159 (Mass. effective Apr. 8, 2025).

[4] S.P. 416 L.D. 985, 132nd Leg., 1st Spec. Sess., (Me. 2025).

[5] S.B. 951, 83rd Leg. (Or. 2025).

[6] US Dep’t of Health & Human Services, Office of Inspector General, Medicaid Fraud Control Units Annual Report: Fiscal Year 2025 (OEI‑09‑26‑00140, Mar. 18, 2026), https://oig.hhs.gov/reports/all/2026/medicaid‑fraud‑control‑units‑annual‑report‑fiscal‑year‑2025/.

[7] Tex. Att’y Gen., Attorney General Ken Paxton’s Medicaid Fraud Control Unit Plays Key Role in Largest Health Care Fraud Takedown in US History (July 18, 2025), https://www.oag.state.tx.us/news/releases/attorney‑general‑ken‑paxtons‑medicaid‑fraud‑control‑unit‑plays‑key‑role‑largest‑health‑care‑fraud?utm.

[8] Id.