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DOJ Cracks Down on Fraud: Over $78 Billion Recovered Through False Claims Act Settlements in Q1 2025
April 12, 2025 – The U.S. Department of Justice (DOJ) has demonstrated its commitment to aggressively enforcing the False Claims Act (FCA) with a series of significant settlements and judgments announced in the first quarter of 2025. These actions highlight the government’s focus on a wide array of fraudulent activities and the crucial role of whistleblowers in uncovering these schemes. Many of these resolutions stemmed from qui tam lawsuits filed by whistleblowers who can receive between 15-30% of the funds recovered.
Deputy Assistant Attorney General Michael Granston emphasized the DOJ’s ongoing dedication to FCA enforcement. The settlements reached in the first quarter of 2025 underscore the diverse types of fraud the government is targeting.
Key settlements include:
- $62 Million Settlement for Medicare Part C Fraud: Seoul Medical Group Inc. and its subsidiary and Renaissance Imaging Medical Associates Inc., agreed to pay $62 million for allegedly submitting false diagnosis codes for spinal conditions to inflate Medicare Advantage payments. The DOJ stated that Seoul Medical submitted diagnoses for conditions patients did not have and enlisted Renaissance Imaging to create supporting radiology reports. Acting Assistant Attorney General Yaakov M. Roth stressed the importance of truthful information in the Medicare Advantage program. This settlement resolved a qui tam lawsuit filed by a former Vice President and Chief Financial Officer.
- $4.6 Million Settlement for Cybersecurity Fraud: MORSECORP Inc. settled for $4.6 million over allegations of failing to meet cybersecurity requirements in contracts with the Departments of the Army and Air Force. The DOJ accused MORSE of submitting false claims because they knew they hadn’t complied with contract cybersecurity terms, including using a third-party email host without equivalent security measures. U.S. Attorney Leah B. Foley stated the commitment to holding contractors accountable for protecting sensitive government information. This settlement also originated from a whistleblower lawsuit.
- $15.7 Million Settlement for Defense Contract Fraud: DRI Relays Inc. agreed to pay $15.7 million to resolve allegations of supplying military parts that did not meet required military specifications between 2015 and 2021. The DOJ noted that DRI invoiced for military-grade parts knowing they hadn’t passed necessary testing. Acting Assistant Attorney General Yaakov M. Roth underscored the importance of contractors meeting military specifications for safety and readiness.
- $1.9 Million Settlement for Illegal Kickbacks: A group of health care providers and laboratory marketers agreed to pay $1.9 million for their involvement in laboratory kickback schemes. The DOJ detailed instances where healthcare providers allegedly received kickbacks for referrals to a South Carolina laboratory, and a marketer received kickbacks for arranging these referrals. These actions allegedly violated the Anti-Kickback Statute. Acting U.S. Attorney Brook B. Andrews emphasized that kickback schemes undermine the integrity of the healthcare system.
These settlements demonstrate the effectiveness of the False Claims Act as a primary tool against fraud affecting the federal government. Since 1986, the FCA has enabled the recovery of over $78 billion, with more than $55 billion resulting from qui tam whistleblower lawsuits. Individuals considering filing a qui tam lawsuit should seek advice from an experienced whistleblower attorney.
Tags: False Claims Act, DOJ, settlement, qui tam, whistleblower, Medicare Part C fraud, cybersecurity fraud, defense contract fraud, kickbacks, healthcare fraud, government contracts, fraud enforcement, legal news, Mary Jane Wilmoth