A federal jury has convicted the 79-year-old CEO of an Arizona software company for orchestrating one of the largest healthcare fraud schemes in American history, defrauding Medicare and other federal programs of more than $1 billion by deliberately exploiting vulnerable seniors.
Gary Cox of Maricopa County, Arizona, who ran Power Mobility Doctor Rx, LLC, was found guilty of operating a sophisticated criminal enterprise that generated fake doctors’ orders and facilitated illegal kickbacks while hundreds of thousands of Medicare beneficiaries were tricked into accepting unnecessary medical equipment they didn’t need.
The Department of Justice announced Tuesday that Cox was convicted on multiple federal charges including conspiracy to commit health care fraud and wire fraud, three counts of health care fraud, conspiracy to pay and receive health care kickbacks, conspiracy to defraud the United States, and making false statements concerning health care matters. He faces up to 20 years in prison.
At the heart of Cox’s criminal operation was an online platform called DMERx that served as a coordination hub for a network involving pharmacies, durable medical equipment suppliers, telemedicine companies, and offshore call centers – all working together to steal taxpayer dollars through bogus medical claims.
The scheme targeted some of America’s most vulnerable citizens through a sophisticated marketing operation designed to exploit seniors. According to DOJ investigators, the criminal network used “misleading mailers, television advertisements, and calls from offshore call centers” to draw in “hundreds of thousands of Medicare beneficiaries who provided their personally identifiable information.”
Once these seniors were hooked, they were pressured to “accept medically unnecessary orthotic braces, pain creams, and other items” that they didn’t need and often never requested.
The fraudulent doctors’ orders were the cornerstone of Cox’s operation. According to court documents, doctors were paid by telemedicine companies to sign off on medical orders without actually confirming whether patients needed the equipment. Sometimes these doctors had no contact with patients whatsoever, while other times they would approve expensive medical equipment after nothing more than a brief phone call.
Cox then took these fake orders and sold them to “pharmacies, durable medical equipment suppliers, and marketers with telemedicine companies that would accept illegal kickbacks and bribes in exchange for signed doctors’ orders.” His software company profited by coordinating these illegal kickback transactions and referring the fraudulent orders to suppliers and pharmacies that paid bribes for the bogus documentation.
The scheme falsely claimed that Medicare patients had been properly examined and treated by qualified medical professionals, when in reality the entire operation was designed to generate maximum profit with zero regard for patient welfare or medical necessity.
Matthew Galeotti, head of the Justice Department’s Criminal Division, didn’t mince words about the scope of Cox’s criminal enterprise.
“The defendant orchestrated a scheme to defraud government health care benefit programs on a massive scale, creating fraudulent doctors’ orders used to bill insurers over $1 billion,” Galeotti said in a statement.
“Americans are all too familiar with junk mail and spam calls that target seniors to steal their personal information and promote waste, fraud, and abuse in our economy. The Criminal Division will continue to aggressively prosecute health care fraud schemes to hold criminals accountable, protect the vulnerable, and recover financial losses.”
Cox’s conviction represents a significant victory in the Trump administration’s ongoing war against fraud and federal waste. According to the DOJ, this case is part of a much larger criminal investigation that has been incredibly successful in protecting taxpayer dollars and holding criminals accountable.
Since 2007, a special DOJ investigative unit has charged more than 5,800 defendants who collectively attempted to bill federal healthcare programs and private insurers for more than $30 billion in fraudulent claims. Cox’s billion-dollar scheme represents one of the largest individual cases in this massive enforcement effort.
For Cox, the conviction means he could spend his remaining years behind bars.
The case also highlights the sophisticated nature of modern healthcare fraud, which often involves complex networks of seemingly legitimate businesses working together to manipulate the system. Cox’s operation included telemedicine companies, pharmacies, medical equipment suppliers, marketing firms, and offshore call centers – all coordinated through his software platform to maximize fraudulent billing.