The Department of Justice (“DOJ”) recently released its 2025 statistics for federal False Claims Act cases. With settlements and judgments exceeding $6.8 billion last year, DOJ’s report shows that the False Claims Act (“FCA”) remains one of DOJ’s most potent and frequently-used investigation tools. The annual report also suggests that, after a year of change and turnover that touched virtually every corner and level of DOJ, the coming year will likely see a historically high volume of FCA cases. Contractors and grant recipients, therefore, should pay careful attention to every claim for payment or compliance certification submitted to any federal authority.
According to DOJ’s press release and statistics, 2025 was the high-water mark for FCA settlements and judgments. Since 1987, the earliest date for which DOJ publishes data, FCA recoveries have exceeded a total of $5 billion only three times: almost $5.1 billion in 2012; over $6.1 billion in 2014; and more than $5.7 billion in 2021. Interestingly, last year’s record-setting total also marked the reversal of three straight years where total recoveries ranged from only $2.2 billion to $3.1 billion.
DOJ’s announcement also made clear that many of its judgments and settlements for 2025 resulted from policy priorities for the Trump Administration. While DOJ did not report specifics, its press release included a link to a summary of its policy objectives (also linked here). Some of these objectives, which have been discussed previously in this blog, involve DEI and civil rights issues addressed by the DOJ’s Civil Rights Fraud Initiative. They also include efforts to use the FCA to investigate false diagnosis codes used to obtain funds for treatments related to “radical gender experimentation” and gender dysphoria. Some of these initiatives specifically encouraged whistleblowers, also known as qui tam relators, to bring cases forward for investigation by the Department of Justice. Perhaps not surprisingly, in 2025, DOJ recovered more than $5.3 billion just from cases initiated by qui tam relators, which was by far DOJ’s highest annual total.
While the use of the FCA for some of the Trump Administration’s policy priorities has drawn scrutiny, DOJ has continued to use the FCA to investigate fraud, waste, and abuse among federal contractors, grant recipients, and the healthcare industry along more non-partisan lines. FCA recoveries in the healthcare sector have always been the largest share of DOJ’s total. Last year was no exception, with DOJ recovering more than $5.7 billion in the health and human services category, or 83% of DOJ’s total annual recoveries under the FCA. Notably, this ratio is more consistent with historical trends and reverses the previous two years, which saw healthcare’s percentage of total FCA recoveries drop into the 60s. (This shift is probably the result of waning investigations related to COVID-pandemic fraud cases, such that healthcare-related cases will return to commanding the vast majority of annual FCA matters.) Recoveries from the defense industry in 2024 dropped to $98 million but surged in 2025 to nearly $634 million. Total annual FCA recoveries for “other” sources jumped to $1.2 billion in 2024—probably because of investigations into COVID-recovery fraud—but dropped to about $532 million in 2025, which was still the second highest total since 2018.
In the defense and military procurement arena, DOJ’s press release fact sheet described settlements and judgments that focused on accurate cost and pricing data. Three major contractors reached eight- and nine-figure settlements to resolve allegations in this area. Another notable settlement involved allegations that a contractor used a competitor’s data to improperly influence awards. Two other defense contractors each paid eight-figure settlements to resolve separate cases involving allegations that parties failed to meet contract specifications or that subcontractor billing rates were excessive and unsubstantiated. Cybersecurity compliance was another focal point for DOJ annual FCA announcement, citing three multi-million-dollar settlements with contractors that allegedly failed to deliver compliant systems. Two higher-education institutions also paid large settlement amounts to resolve cybersecurity-related FCA allegations.
The type, pace, and volume of FCA case recoveries from 2025 suggests that 2026 will see more of the same. Given their broad bipartisan support, FCA investigations are likely to again play a historically large role in DOJ’s enforcement activities. Also, as noted above, DOJ’s express invitations to whistleblowers are likely to drive up the total number of qui tam cases that DOJ investigates as well as related settlements or judgments. Contractors and grant recipients should be wary of internal or hotline complaints that have overt or subtle indicators of fraud allegations. If formal DOJ investigative inquiries are made, federal fund recipients should anticipate and expect that DOJ is pushing resources to FCA investigations such that those inquiries should be taken very seriously.