An Arizona man has been sentenced to 15 years in prison for orchestrating a major health care fraud scheme. Gary Cox, aged 79, was also ordered to pay over $452 million in restitution. His fraudulent activities defrauded Medicare and other federal health care programs of more than $1 billion.
Overview of the Health Care Fraud Scheme
Cox served as the CEO of Power Mobility Doctor Rx, LLC (DMERx). The organization operated a platform that created false doctors’ orders. These fraudulent orders were used to support claims for unnecessary medical items, including orthotic braces and pain creams.
Targeting Vulnerable Populations
- Cox and his co-conspirators specifically targeted senior citizens, using misleading mailers and telemarketing.
- They gathered personally identifiable information from hundreds of thousands of Medicare beneficiaries.
Illegal Practices and Payments
The platform generated fraudulent doctors’ orders by connecting pharmacies and medical equipment suppliers with telemedicine companies. These telemedicine firms accepted illegal kickbacks in exchange for the signed orders. Cox’s network profited from these transactions by receiving payments for coordinating illegal kickbacks.
Fraudulent Billing to Medicare
The DME suppliers and pharmacies billed Medicare over $1 billion. Medicare and other insurers paid out more than $360 million based on these fraudulent claims. Cox concealed the illicit activities through sham contracts and by removing red flags from the doctors’ orders.
Legal Proceedings and Official Statements
Cox was convicted in June 2025 on multiple charges, including conspiracy to commit health care fraud and wire fraud. The investigation involved multiple agencies, including the FBI and the Department of Health and Human Services Office of Inspector General (HHS-OIG).
Commitment to Combat Health Care Fraud
The Acting Assistant Attorney General, Matthew R. Galeotti, reaffirmed the commitment of law enforcement to address telemedicine fraud. He stated, “This sentence sends a clear message to those who exploit telemedicine.”
Fraud Prevention Initiatives
The Health Care Fraud Strike Force Program has been vital in prosecuting health care fraud. Since March 2007, it has charged over 5,800 defendants for schemes that have collectively billed federal health programs over $30 billion.
The Centers for Medicare & Medicaid Services are taking additional steps to hold health care providers accountable for their fraudulent activities.
