This month, the Department of Justice announced that in fiscal year 2025 the government recovered over $6.8 billion from settlements and judgments under the False Claims Act (FCA). This is the highest amount recovered under the FCA in a single year in the history of the Act. According to DOJ’s statistics, whistleblowers were responsible for $5.3 billion of the total amount recovered, proving how valuable the qui tam provisions of the FCA are in fighting fraud. Whistleblowers also filed 1,297 new qui tam suits in fiscal year 2025, breaking the prior record of 980 suits set in 2024, and the government opened 401 investigations. Settlements and judgments from the FCA now total more than $85 billion since 1986, when Congress strengthened the Act.
Deputy Attorney General Todd Blanche said, “Stopping rampant fraud is a top priority, and this record-breaking year proves the False Claims Act remains one of the government’s most powerful weapons against fraud. …We will continue to aggressively deploy it to protect taxpayer dollars and hold all fraudsters accountable.”
Phillips & Cohen Clients’ Healthcare Settlements in FY 2025
Healthcare fraud continues to be the leading source of settlements and judgments under the FCA, with over $5.7 billion recovered in healthcare cases in FY 2025. Phillips & Cohen’s whistleblower clients contributed to this number with several significant healthcare settlements.
In February 2025, SVCMC Inc., formerly known as Saint Vincents Catholic Medical Centers of New York, settled for $29 million a whistleblower lawsuit filed by Phillips & Cohen. The settlement resolved allegations that the medical center retained years of erroneously inflated government healthcare payments. The lawsuit was filed against SVCMC and five other healthcare plans, along with a related corporate entity. The lawsuit remains pending against the other defendants. The alleged fraud involved the Uniformed Services Family Health Plan (USFHP), which entrusted the health systems and medical centers to provide healthcare to more than 100,000 military personnel, retirees and their families.
In another significant healthcare settlement, Independent Health Association, Independent Health Corp., its subsidiary DxID LLC, and the former CEO of DxID Betsy Gaffney will pay up to $98 million to settle a whistleblower lawsuit filed by Phillips & Cohen. Independent Health contracted with the Centers for Medicare & Medicaid Services (CMS) to provide health plans to beneficiaries enrolled in Medicare Part C in New York. The lawsuit alleged that Independent Health, DxID, and Gaffney submitted false or fraudulent diagnosis codes in order to receive inflated risk-adjustment payments from CMS.
Settlements of Cases Involving Other Government Enforcement Priorities
In addition to healthcare, the federal government continues to prioritize enforcement in areas such as fraud in procurement, loan, and grant programs, as well as evasion of tariffs and customs duties. Phillips & Cohen also settled one such case in FY2025.
Paragon Systems, Inc., one of the largest providers of security services to the federal government, agreed to pay $52 million plus $1.68 million interest to the federal government to settle a lawsuit filed by a Phillips & Cohen client under the FCA. The lawsuit alleged that Paragon engaged in an unlawful scheme to obtain security officer service contracts set aside by the Department of Homeland Security to be awarded to small businesses, including small businesses owned by veterans, women, and other socially and economically disadvantaged groups. The lawsuit alleged that in order to capture such contracts, Paragon formed joint ventures with purportedly small businesses owned by relatives and friends of Paragon executives to obfuscate that the businesses were controlled by Paragon executives, depriving the government of the intended benefits of the set-aside contracts.
While many factors likely contributed to the blockbuster year in FCA recoveries, cases brought by whistleblowers, who often have insider knowledge that the government would not otherwise be able to uncover, played a critical role in the record recoveries in FY2025. Whistleblowers’ willingness to come forward and report fraud is key to the government’s enforcements efforts and the success of the Act.
Phillips & Cohen has extensive experience representing whistleblowers and understands the complexities of reporting wrongdoing to authorities. If you know of fraud against the government and would like to speak to an experienced whistleblower attorney, contact Phillips & Cohen for a confidential review of your case.