CEO received prison for orchestrating billion-dollar fraudulent Medicare scheme.
An Arizona CEO who led a health care software company received a 15-year prison sentence and was ordered to repay more than $452 million after being convicted in one of the largest telemedicine-related fraud cases ever prosecuted. Gary Cox, 79, operated a platform that created false doctors’ orders, which were then used to submit fraudulent claims to Medicare and other federal health programs. Authorities said the scheme generated over $1 billion in fraudulent billings.
Cox and his associates ran a company called Power Mobility Doctor Rx, LLC, known as DMERx. Through this platform, they connected pharmacies, suppliers of medical equipment, and marketers with telemedicine services willing to accept illegal kickbacks in exchange for signed doctors’ orders. These orders falsely claimed patients needed medical items, even when no legitimate medical evaluation had taken place. The scheme targeted hundreds of thousands of Medicare beneficiaries, many of whom received items they did not need. Officials said the company used misleading mailers, television ads, and calls from offshore call centers to enroll seniors in the program.
The fraudulent orders misrepresented that a doctor had evaluated and treated patients. In reality, some doctors were paid to sign forms after only brief or even nonexistent interactions with beneficiaries. The medical equipment and pharmacy providers who received the orders billed Medicare for the items, and the program paid more than $360 million on those claims. Cox and his team hid the scheme through fake contracts and by removing wording from doctors’ orders that could have triggered audits.
Authorities described the actions of the Arizona CEO and his co-conspirators as a massive betrayal of public trust. Acting Assistant Attorney General Matthew Galeotti said the fraud drained taxpayer funds and targeted vulnerable populations, including senior citizens. Officials emphasized that telemedicine schemes exploiting federal health programs can directly harm the people they are meant to help. Agencies involved in the investigation included the FBI, the Department of Health and Human Services Office of Inspector General, the Veterans Affairs Office of Inspector General, and the Defense Criminal Investigative Service. These agencies worked together to dismantle the operation and hold those responsible accountable.
Investigators noted that the scheme relied heavily on coordination between multiple parties who profited from the illegal transactions. The Arizona CEO and his associates received payments for coordinating kickbacks and for referring completed doctors’ orders to suppliers and telemarketers willing to participate. The elaborate system of false documentation and financial incentives allowed the fraud to continue for years before it was uncovered. Federal prosecutors highlighted the scheme’s size and sophistication during trial, calling it one of the largest telemarketing-based Medicare fraud cases ever brought to verdict.
The Department of Justice said the sentencing sends a clear message that those who exploit telemedicine to steal from federal health programs will face serious consequences. Officials also noted that ongoing efforts continue to prevent similar schemes, protect patients, and preserve the integrity of government-funded health programs. Programs like Medicare and TRICARE are meant to provide critical care to vulnerable populations, and fraud schemes can disrupt the delivery of essential services. Legal teams involved in the prosecution worked for the Criminal Division’s Fraud Section, including special units focusing on health care fraud.
Cox was convicted in June 2025 on multiple charges, including conspiracy to commit health care fraud and wire fraud, paying and receiving kickbacks, and making false statements to defraud the United States. The case also demonstrated the government’s ability to trace complex financial and medical fraud schemes and to hold executives accountable for actions that harm patients and taxpayers alike. Authorities stressed that the resolution of the case reflects years of coordinated investigative work aimed at preventing abuse of telemedicine and medical benefit programs.
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CEO of Health Care Software Company Sentenced for $1B Fraud Conspiracy
Healthcare software CEO sentenced to 15 years, ordered to pay $452M
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