On 16 January 2026, the US Department of Justice (DOJ) announced that False Claims Act (FCA) recoveries in fiscal year 2025 were highest single-year total in the statute's 160-year history. The numbers alone are noteworthy, but the more important story lies in how the statute is being deployed. Under the Trump administration, the FCA is emerging not merely as a tool for policing fraud by recipients of federal funds (which is consistent with its historical use), but as a preferred vehicle for advancing broader policy objectives — from tariff enforcement to the elimination of corporate diversity programs. Overall, the FCA stands out as an exception to the overall decrease in federal enforcement efforts last year.
Topline Takeaways
According to DOJ, judgments under the FCA exceeded $6.8 billion in fiscal year 2025 (ending 30 September 2025) — the highest single-year recovery in the statute's history and more than double the ten-year average. Whistleblower-initiated lawsuits — known as qui tam actions — also hit an all-time high: 1,297 new suits were filed, eclipsing the prior record of 980 set in FY 2024 and nearly doubling the average annual filings over the prior decade. Qui tam-originated matters accounted for over $5.3 billion of total recoveries, or roughly 78%. DOJ also initiated 401 new investigations, several of which DOJ said align with the current administration's stated policy objectives.
It is worth noting that recovery figures are somewhat top-heavy: ten cases accounted for more than half the total, and a single case represented approximately 15% of the year’s haul.
The headline figure is striking, but the underlying trends carry more nuanced lessons for compliance teams.
- First, the 32% growth in qui tam filings signals an increasingly active and emboldened whistleblower bar. Indeed, the government’s decision not to join a case is no longer a clear signal that the matter will go away. Indeed, two of FY2025’s largest recoveries came in cases where the government declined to intervene and whistleblowers took the cases to trial independently, resulting in verdicts of $1.6 billion and $289 million respectively. Of course, the constitutionality of qui tam suits where the government declines to participate is currently under review by the Eleventh Circuit, so this is an area of uncertainty.
- Second, the DOJ is increasingly deploying the FCA beyond its traditional healthcare fraud heartland and into areas such as customs and tariff evasion, cybersecurity compliance, and diversity, equity, and inclusion (DEI) programs.
- Third, the DOJ's emphasis on rewarding voluntary self-disclosure, cooperation, and remediation in several FY 2025 settlements confirms that the calculus for companies considering self-reporting continues to tilt in favor of disclosure. Companies that can demonstrate a credible compliance program and prompt remediation may receive meaningful credit in the form of reduced penalties or damage multiples.
Enforcement Priorities
Notwithstanding rising trends in other areas, FCA recoveries in healthcare and life sciences again dominated FCA statistics. DOJ highlighted continued and expanding enforcement across three major areas: managed care fraud (particularly in the Medicare Advantage program), prescription drug marketing (including alleged kickback schemes disguised as speaker programs and honoraria payments to prescribers), and medically unnecessary care. For life sciences and healthcare companies operating globally, particularly those with US reimbursement exposure through Medicare, Medicaid, or TRICARE, the message is clear: the FCA remains the principal enforcement mechanism for federal healthcare fraud and investing in compliance programs is critical. Several of the cases in FY2025 showcased expanding theories of liability that mean that FCA risk extends beyond the entities that directly bill the US government.
The Trump administration put tariffs at the core of its economic and foreign policies in 2025. Unsurprisingly, customs and tariff fraud emerged as one of FY 2025's fastest-growing enforcement areas. In August 2025, DOJ and the Department of Homeland Security launched a cross-agency Trade Fraud Task Force combining civil and criminal prosecutors with Customs and Border Protection and Homeland Security Investigations. The Task Force's mandate is broad: misclassification of imported goods, false country-of-origin declarations, transshipment to evade Section 301 tariffs, and undervaluation schemes.
FCA-based customs enforcement yielded a $54.4 million settlement with Ceratizit USA over alleged misrepresentation of Chinese-manufactured tungsten carbide products as Taiwanese-origin to evade tariffs. DOJ simultaneously resolved a parallel criminal investigation into another importer, crediting the company's earlier civil FCA settlement and voluntary self-disclosure.
We expect these trends to continue. DOJ has designated trade and customs fraud, including tariff evasion, as one of ten “high-impact” white-collar enforcement priorities. The qui tam provisions of the FCA apply in this context, meaning competitors, employees, and customs brokers can file whistleblower suits.
Freshfields has previously highlighted how the administration began using the FCA in late 2025 to investigate DEI programs by companies that receive federal funds. Thus, while the FY 2025 statistics do not include any DEI-related recoveries, we anticipate the administration is looking to change that this year. The DOJ's press release and fact sheet noted that several of the government-initiated investigations align with administration policy objectives, which likely includes the DOJ's Civil Rights Fraud Initiative. Federal contractors and grantees with global operations should work with US counsel to evaluate whether their workforce programs create FCA exposure under the current enforcement posture.
