Designed for busy in-house counsel and compliance professionals, this newsletter seeks to bring you up to speed on key federal and state False Claims Act (FCA) developments, with links to primary resources. Each quarter, Morrison Foerster provides key takeaways and discusses some of the most significant false claims topics.
In this third newsletter of 2025, we answer the following questions: What conclusions can we draw from the U.S. Department of Justice’s (DOJ) recent announcements creating a new healthcare fraud working group and a new specialized unit to target tariff evasion? What signals did DOJ send with its 2025 National Healthcare Fraud Takedown? What steps is DOJ taking to enforce its newly announced priorities under the FCA? The answers to this quarter’s questions—plus a discussion of the efforts of two states to expand FCA liability—are here in our MoFo July 2025 FCA Update.
Federal
DOJ & HHS Announce New FCA Healthcare Fraud Working Group. As first reported in a recent client alert, the Trump administration has demonstrated its commitment to using the FCA to prosecute healthcare fraud by standing up a new interagency False Claims Act Working Group meant to increase enforcement and interagency cooperation in this area. On July 2, 2025, DOJ & the Department of Health and Human Services (HHS) jointly announced that this Working Group will make it easier for HHS to refer suspected FCA violations to DOJ in target areas including (but not limited to): Medicare fraud; kickbacks related to drugs, medical devices, and durable medical equipment; and drug, device, and biologics pricing. At the same time, DOJ announced the creation of a Health Care Fraud Data Fusion Center (“Center”) to leverage cloud computing, artificial intelligence, and advanced analytics to detect healthcare fraud. The Center will build on the work of DOJ’s Health Care Fraud Unit Data Analytics Team to identify trends like aberrant billing levels and newly emerging healthcare fraud schemes. It is fair to assume that the government expects the Fusion Center to drive an increase in data-driven healthcare enforcement actions.
DOJ Announces 2025 National Healthcare Fraud Takedown. DOJ recently announced the results of its 2025 National Healthcare Fraud Takedown, which featured charges against hundreds of defendants across 50 federal districts, in cooperation with 12 state attorneys general. The government alleges that the sum of all the fraud charged in these cases exceeds a massive $14.6 billion and carries $48.5 million in corresponding potential civil liability announced to date, with more sure to follow. DOJ’s press release was notable in particular for two enforcement actions focused on telemedicine and genetic and diagnostic testing. Specifically, the government charged 49 defendants with the submission of over $1.17 billion in allegedly fraudulent Medicare claims resulting from telemedicine and genetic testing schemes, and another 170 defendants with various healthcare fraud schemes involving over $1.84 billion in allegedly fraudulent claims connected to diagnostic testing, medical visits, and treatments that were unnecessary, provided in connection with kickbacks and bribes, or never provided at all.
DOJ Remakes Specialized MIMF Unit as “Market, Government, and Consumer Fraud Unit” to Target Tariff Evasion. DOJ has announced that its Market Integrity and Major Frauds Unit (MIMF) will fold in personnel from the Consumer Protection Branch into the newly formed “Market, Government, and Consumer Fraud Unit” and focus on trade violations, tariff evasion, and other white collar crimes. This comes on the heels of DOJ’s announcement that it will prioritize tariff enforcement under the FCA. We fully expect DOJ’s criminal and civil divisions to work collaboratively to target tariff evasion under both criminal and civil statutes including the FCA.
DOJ recently publicized two FCA trade enforcement settlements of note. On July 23, 2025, DOJ announced that Global Plastics LLC and Marco Polo International LLC agreed to pay $6.8 million to resolve civil liability under the FCA for failing to pay customs duties on certain plastic resin imported from China. The settlement was reached under DOJ’s Voluntary Self-Disclosure program after the companies disclosed to DOJ and Customs & Border Protection (CBP) that they did not pay the proper duties to CBP as a result of their failure to declare the correct country of origin and value of goods on certain entries of plastic resin products manufactured in China. On July 24, 2025, DOJ announced a $4.9 million settlement with Grosfillex Inc. to resolve allegations that it violated the FCA by evading antidumping and countervailing duties (AD/CVD) on items made of extruded aluminum originating in China. The government alleged that Grosfillex knowingly submitted false customs forms to CBP claiming that certain furniture parts made of extruded aluminum were not subject to AC/CVD.
DOJ Announces New Cybersecurity FCA Settlement. In our previous newsletter, we predicted that DOJ would continue to focus its attention on cybersecurity lapses by companies doing business with the government. On May 1, 2025, DOJ announced an $8.4 million settlement with Raytheon Company, RTX Corporation, Nightwing Group LLC, and Nightwing Intelligence Solutions LLC (Raytheon). The settlement resolves allegations that Raytheon failed to implement required cybersecurity controls on an internal development system that was used to perform unclassified work on U.S. Department of Defense (DoD) contracts. Specifically, the government alleged that Raytheon failed to develop and implement a system security plan, as required by DoD cybersecurity regulations, and failed to ensure that the system complied with other cybersecurity requirements contained in the Defense Federal Acquisition Regulation Supplement (DFARS) and the Federal Acquisition Regulation (FAR). DOJ will continue to focus on cybersecurity lapses by government contractors. Companies that operate in this space should pay close attention to how regulators and enforcers currently view cybersecurity compliance.
DOJ Announces Two Actions Involving Unnecessary Genetic Testing. We have been closely tracking DOJ’s enforcement efforts involving genetic testing and have written to alert industry participants to DOJ’s interest in this area. DOJ recently announced two settlements involving genetic testing. On April 23, 2025, DOJ announced a $6 million settlement with Genexe LLC, its parent company, and marketing firm Immerge Inc., as well as two top executives. The government alleged the defendants entered into a kickback scheme with several medical laboratories and telemedicine healthcare providers under which the labs billed Medicare for fraudulent genetic testing. On June 6, 2025, DOJ announced that it filed an FCA suit against AIMA Business and Medical Support LLC, a Florida medical billing and compliance services company, for allegedly filing claims to Medicare for more than $15 million in medically unnecessary genetic laboratory tests. The government stated that Selecta Laboratory paid AIMA to submit fraudulent claims to Medicare on its behalf and to advise Selecta on how to maximize profits and ensure its claims got paid. While it is uncommon for DOJ to pursue FCA claims against a provider’s outside billing company, the facts alleged here are perhaps uncommonly serious.
State
California Fails (for Now) in Its Bid to Expand State’s FCA Statute to Tax Matters. Our previous newsletter reported that a California state senator had filed a bill that would allow the attorney general, a local prosecutor, or a whistleblower to file an FCA suit based on suspected state and local tax fraud. The bill would have allowed government prosecutors (but not civilian whistleblowers) to access to confidential tax records. On April 23, 2025, the bill came before the Senate Revenue and Taxation Committee and failed. The full committee agreed that this bill could be brought up again because two of the members of the committee did not vote. We will continue to monitor this legislation.
Pennsylvania House of Representatives Passes State False Claims Act Legislation. Pennsylvania remains the largest state in the nation without a state false claims law—but for how much longer? On July 10, 2025, the Pennsylvania House of Representatives passed House Bill 1697, which would create a state False Claims Act closely based on the federal statute, including incentives for whistleblowers. Interestingly, the bill does not include an express tax bar and thus, unlike the federal version, could apply to state taxes (similar to the effort being made in California to expand California’s FCA). The bill now moves to the Senate, and we will continue to monitor this legislation.
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