DOJ Reports Record FY 2025 False Claims Act Recoveries Exceeding $6.8 Billion

DOJ Reports Record FY 2025 False Claims Act Recoveries Exceeding $6.8 Billion

The US Department of Justice (DOJ) announced a record $6.8 billion in False Claims Act (FCA) settlements and judgments for fiscal year 2025, the highest recovery in a single year in the history of the FCA. This year, whistleblowers filed a record 1,297 qui tam lawsuits and the government opened 401 investigations. Health care fraud was the leading source of FCA settlements and judgments, accounting for over $5.7 billion related to recoveries to restore funds to federal programs such as Medicare, Medicaid, and TRICARE. In addition to health care fraud, the DOJ pursued cases involving government procurement, contractor cybersecurity obligations, and pandemic program fraud. The DOJ also directed resources to combatting fraud that evades tariffs and customs duties by launching a cross-agency Trade Fraud Task Force to enhance efforts to prevent trade fraud.

This is all according to a press release and fact sheet published by the DOJ on January 16, available here.

DOJ to Launch National Fraud Enforcement Division

On January 8, the Trump Administration announced plans to create a new US Department of Justice (DOJ) division focused on national fraud enforcement. The division will enforce federal criminal and civil laws against fraud targeting government programs, federally funded benefits, businesses, nonprofits, and private citizens.

The Assistant Attorney General (AAG) for this new division will oversee multi-district and multi-agency investigations, set national enforcement priorities, and advise the Attorney General and Deputy Attorney General on high-impact fraud investigations. The AAG will also provide assistance and directions to the US Attorneys’ Offices on fraud related issues. The announcement also highlighted that the AAG will propose legislative and regulatory reforms that they believe are “necessary to close systemic vulnerabilities.”

Read the Administration’s announcement here.

Atlantic Biologicals Enters Into DPA Over Opioid Scheme

On January 13, the DOJ announced that Atlantic Biologicals Corporation entered into a two-year deferred prosecution agreement (DPA) after being charged with conspiring to distribute controlled substances. Under the DPA, Atlantic Biologicals admitted that its National Apothecary Solutions (NAS) unit knowingly sold millions of oxycodone, hydrocodone, hydromorphone, and other controlled substances like carisoprodol and alprazolam to Houston, Texas-area pill mills from 2017 to May 2023. According to the government, the pills were dispensed outside the usual course of professional practice and without a legitimate medical purpose. NAS realized at least $2,508,735.85 in gross proceeds from these sales and sold over 14 million doses of opioids and opioid potentiators. The NAS will cease operations this month. Several individuals tied to the scheme, including a former NAS president and affiliated consultants, previously pleaded guilty.

According to court documents, NAS used purported compliance measures that were circumvented while ignoring clear red flags, including abnormal ordering patterns, willingness to pay above market prices, suspicious pharmacy operations, and sham due diligence. According to the DPA, Atlantic Biologicals must cooperate with the DOJ, implement a compliance and ethics program, and report to the DOJ on remediation. Atlantic Biologicals will also pay a $450,000 criminal penalty. According to the DOJ, while Atlantic Biologicals did not timely self-disclose its misconduct to the DOJ, they did receive credit for cooperating with the government’s investigation.

Read the DOJ’s press release here.

Medical Supply Company Charged for Alleged $30 Million Health Care Fraud

Federal prosecutors charged Mark Loftis, owner of Back Pain Home Supplies LLC doing business as EZ Medical Supply, with orchestrating a scheme to submit fraudulent claims to Medicare, TRICARE, and CHAMPVA for orthotic braces and other durable medical equipment (DME), and for theft of Provider Relief Funds (PRF) intended to support health care providers during the COVID-19 pandemic. According to the indictment, which was recently unsealed, Loftis paid illegal kickbacks to marketers in exchange for Medicare patient referrals and to marketers and telemedicine companies in exchange for signed doctors’ orders without meaningful patient evaluations. He then allegedly billed for medically unnecessary DME that was not provided as billed. Back Pain allegedly submitted approximately $30 million in false claims, of which the health care programs paid approximately $8 million.

Loftis is also accused of misusing over $133,000 in PRF money by falsely attesting to certain conditions and diverting funds to further the DME fraud scheme and for personal expenses. He is charged with conspiracy to commit health care fraud and wire fraud, conspiracy to defraud the United States and to offer, pay, solicit, and receive kickbacks, and two counts of theft of government property. If convicted, he faces up to 20 years in prison on the health care and wire fraud conspiracy count, five years on the conspiracy and kickback count, and 10 years on each theft of government property count.

An indictment is merely an allegation. All defendants are presumed innocent until proven guilty beyond a reasonable doubt in a court of law.

Read the DOJ’s press release here.

Kaiser Affiliates to Pay $556 Million for Alleged False Claims Act Violations

Affiliates of Kaiser Permanente (collectively, “Kaiser”), an integrated health care consortium, agreed to pay $556 million to resolve allegations that they violated the FCA by submitting invalid diagnosis codes for Medicare Advantage Plan enrollees in order to obtain higher payments from the Centers for Medicare & Medicaid Services (CMS). Under the Medicare Advantage (MA) Program, beneficiaries may opt out of traditional Medicare and enroll in private health plans offered by Medicare Advantage Organizations (MAOs). Kaiser owns and operates MAOs that offer MA plans to beneficiaries throughout the United States.

The government alleged that from 2009 to 2018, in California and Colorado, Kaiser systematically pressured physicians to add diagnoses to patient medical records that physicians had not addressed after patient visits were completed, which violated CMS rules. According to the allegations, Kaiser developed systems to mine patient histories for potential unsubmitted diagnoses and sent their providers queries urging them to add new diagnoses via addenda to patient medical records months or over a year after the related patient visits. The government also alleged that Kaiser set aggressive physician and facility targets tied to financial incentives. The government further alleged Kaiser knew the practices were unlawful and ignored red flags raised by its own physicians.

The civil settlement also resolves claims in related qui tam FCA cases brought by former Kaiser employees, Ronda Osinek and James M. Taylor, M.D. The relator share of the recovery will be $95 million.

The claims resolved by the settlement are allegations and there has been no determination of liability.

Read the DOJ’s press release here.

20 People Charged With Alleged Sports Bribery Scheme to Fix NCAA and CBA Basketball Games

On January 14, federal prosecutors in the Eastern District of Pennsylvania charged 20 college basketball players with a massive sports bribery scheme intended to influence Chinese Basketball Association (CBA) and National Collegiate Athletic Association (NCAA) men’s basketball games. Prosecutors alleged violations of 18 U.S.C. § 224 (bribery in sporting contests), § 1349 (conspiracy to commit wire fraud), § 1343 (wire fraud), and § 2 (aiding and abetting). According to the indictment, from about September 2022 through February 2025, a group of individuals called “fixers” used bribes to induce CBA players to underperform in order to “point shave” so that their opponents would win and wagers placed on those winning teams would succeed. The scheme allegedly began with fixed CBA games and then expanded into NCAA games.

Prosecutors allege that the NCAA component ultimately involved more than 39 players across over 17 Division I men’s basketball teams and affected over 29 NCAA Division I men’s basketball games. The fixers allegedly made wagers totaling millions of dollars on the games and generated substantial proceeds for both the fixers and the other players involved in the games. According to the indictment, the fixers and players collectively received hundreds of thousands of dollars in bribe payments for fixing their teams’ games, with a typical payment between $10,000-$30,000 per game per player. For their scheme, the fixers allegedly targeted NCAA basketball players for whom the bribe payments would meaningfully supplement or exceed legitimate name, image, and likeness opportunities.

The case is USA v. Smith, et al, 2:26-cr-0023, filed in the Eastern District of Pennsylvania.