Jennifer A. Short and Oliver E. Jury ●
Fiscal Year (“FY”) 2025 yielded a historic high of over $6.8 billion in False Claims Act (“FCA”) settlements and judgments, underscoring the Department of Justice’s (“DOJ”) aggressive enforcement. DOJ’s annual report, released January 16, 2026, showed that healthcare fraud matters again dominated the lion’s share of the moneys recovered, accounting for more than $5.7 billion, and reaffirming the sector’s centrality to FCA priorities. Qui tam lawsuits also retained an outsized influence, representing approximately $5.3 billion in recoveries for both intervened ($3.0 billion) and declined ($2.3 billion) cases. On the flip side, that means the government recovered some $1.5 billion without the aid of an underlying whistleblower complaint. The pipeline of new cases looks robust moving forward: whistleblowers filed a record 1,297 new qui tam suits, and DOJ opened 401 new investigations.
The Civil Cyber-Fraud Initiative Delivers
Cybersecurity enforcement continued to mature, owing in part to DOJ’s Civil Cyber-Fraud Initiative, which was first announced in 2021. In the past year, $52 million were recovered across nine cybersecurity-related FCA settlements. Total recoveries have more than tripled in each of the past two years. With Cybersecurity Maturity Model Certification (“CMMC”) regulations now firmly in place, federal contractors and grant recipients must pay close attention to compliance. Although individual cyber-related settlements are modest ($5.77M on average) compared to certain headline-catching healthcare verdicts, these resolutions signal a clear intent to impose liability.
The year’s published resolutions included allegations concerning the veracity of compliance certifications as well as product security, including, for example, resolutions with HNFS/Centene ($11.2 million; non‑qui tam), Illumina ($9.8 million; qui tam), and MORSECORP ($4.6 million; qui tam). Grantees also faced exposure for missing baseline controls, with Penn State resolving for $1.25 million, illustrating a breadth of scrutiny that encompassed both contracting and grants.
Pandemic Program Fraud Enforcement Continues
Pandemic-related enforcement remained active, with FY 2025 recording more than 200 FCA settlements and judgments totaling over $230 million. Cumulative civil fraud recoveries now exceed $820 million. Enforcement matters in this area extended well beyond Paycheck Protection Program (“PPP”) loan fraud. For example, Delta Air Lines resolved allegations that it had violated Payroll Support Program conditions for a $8.1 million payment. DOJ also pursued medical providers for COVID-related billing abuses, as reflected in settlements with Vault Medical Services ($8 million) and Rapid Health ($8.2 million)—both government-initiated matters (i.e., no qui tam).
Customs, Tariffs, and Trade Fraud: A Growing FCA Frontier
Trade‑related FCA enforcement accelerated, supported by DOJ’s announcement of a cross‑agency Trade Fraud Task Force in August 2025. Emphasizing the government’s renewed focus on this area, DOJ announced FCA resolutions involving misclassification, country‑of‑origin manipulation, and other disguise schemes to evade duties. Settlements highlight different schemes across an array of industries, including Allied Stone ($12.4 million; imported quartz), Evolution Flooring ($8.1 million; wooden flooring), and Grosfillex ($4.9 million; extruded aluminum). In addition to examining fees and duties related to foreign products, DOJ also resolved allegations of improper use of foreign labor, as previously reported on here.
In December 2025 (i.e., early FY 2026), DOJ announced an FCA resolution with Ceratizit USA for its alleged evasion of tungsten carbide duties totaling $54.4 million, the largest such settlement to date. The combination of coordinated interagency attention and significant recoveries indicates that customs and tariff cases are becoming a durable enforcement lane, particularly where importers leverage complex supply chains or sensitive classifications.
Cooperation Credit and Compliance Remediation: When (and How) It Pays
In last week’s release, DOJ reiterated that timely self-disclosure, meaningful cooperation, and concrete remediation can yield credits in the form of reduced penalties or damage multiples. Several FY 2025 settlements reflected such credits, offering practical guidance on what “meaningful” cooperation looks like. Credited conduct included quantifying losses, sharing internal investigative findings (unknown to the government), and implementing remediation such as strengthening compliance programs or separating culpable employees.
DOJ’s messaging, per usual, encourages proactive compliance and may influence how companies stage their internal responses to potential FCA exposure. A growing body of settlements suggests that DOJ means what it says in this regard. Organizations that quickly scope issues, preserve and analyze relevant data, and present credible remediation steps are better positioned to avoid worst‑case outcomes, both with DOJ and in collateral settings.
What the Statistics Suggest for 2026 Priorities and Resolutions
DOJ’s articulated focus areas—healthcare (with particular attention to Medicare Advantage), procurement and grants, cybersecurity obligations, pandemic‑fund integrity, and customs duties—provide a clear roadmap for 2026. The convergence of record recoveries and record filings suggests sustained resources and appetite for complex fraud theories, including data‑driven targeting and coordinated, cross‑program investigations.
At the same time, DOJ’s public signaling regarding cooperation credits points to a parallel emphasis on incentivizing robust compliance cultures alongside deterrence. For companies operating in federal healthcare, procurement, research, or global supply chains, the practical takeaway is twofold: invest in control frameworks aligned to certification and data integrity risks and be prepared to operationalize a credible disclosure and remediation playbook if issues emerge.