A Recap Of The DOJ Press Release on 12-22-2025

Health care fraud, specifically involving telemedicine and durable medical equipment (DME), is a major crime where individuals operate sophisticated platforms to generate false doctors’ orders, defraud federal programs like Medicare, and illegally receive massive kickbacks. The recent sentencing of a software company CEO highlights the serious consequences of these actions.

Table of Contents

• Key Takeaways
• What Was the $1 Billion Medicare Fraud Scheme?
• How Did the DMERx Platform Facilitate Fraud?
• What Was the Result of the Investigation?
• Why Is This Important for Taxpayers?

Key Takeaways

• The fraud scheme targeted hundreds of thousands of Medicare beneficiaries, primarily elderly individuals, through misleading advertisements for items like orthotic braces and pain creams.
• Gary Cox, CEO of Power Mobility Doctor Rx, LLC (DMERx), orchestrated the scheme using an internet platform that generated false doctor’s orders.
• The operation involved illegal kickbacks paid to telemedicine companies and doctors who signed orders without actual patient examination or medical necessity.
• The resulting fraudulent claims submitted to Medicare and other insurers totaled over $1 billion.
• Cox was sentenced to 15 years in prison and ordered to pay more than $452 million in restitution.

What Was the $1 Billion Medicare Fraud Scheme?

In one of the largest telemarketing Medicare fraud cases brought to verdict, an Arizona executive named Gary Cox, 79, was sentenced to 15 years in federal prison for running a complex scheme that siphoned over a billion dollars from taxpayer-funded health care programs.

Cox was the CEO of Power Mobility Doctor Rx, LLC (DMERx), a seemingly legitimate software company that, in reality, acted as the central hub for illegal kickback transactions. The core goal was simple: get doctors’ signatures on unnecessary orders for Durable Medical Equipment (DME) and prescription creams, bill Medicare for those items, and hide the paper trail.

The scheme targeted senior citizens across the country. Cox and his team used misleading mailers, TV ads, and offshore call centers to convince Medicare beneficiaries to provide their personal information and accept items they didn’t need, such as orthotic braces and pain medication. This setup created a steady stream of targets ready for the next step in the fraudulent process.

How Did the DMERx Platform Facilitate Fraud?

The DMERx platform was the engine of the crime. This internet-based system was designed to automatically generate fraudulent doctor’s orders. Instead of legitimate medical assessments, Cox used the platform to coordinate illegal kickbacks and bribes among various players in the supply chain:

1. The Setup: Marketers and offshore call centers convinced seniors to accept the medical items.
2. The Exchange: DMERx connected these marketers and DME suppliers with telemedicine companies.
3. The Illicit Deal: Telemedicine companies received illegal payments (kickbacks) in exchange for securing signed doctor’s orders.

Here is where the betrayal of trust really happened: The signed orders falsely claimed that a doctor had examined and treated the patient. In reality, doctors working with these companies signed the orders with “no regard to medical necessity,” often after just a brief phone call or, in some cases, no interaction with the patient at all. Cox and his co-conspirators were paid handsomely for coordinating these illegal transactions.

Evidence presented at trial showed that Cox and his team took steps to actively conceal the fraud, including using sham contracts and purposefully eliminating what one co-conspirator called “dangerous words” from the documentation that might trigger an audit by Medicare.

What Was the Result of the Investigation?

Following a massive investigation involving the FBI, HHS-OIG, VA-OIG, and DCIS, Gary Cox was convicted in June 2025. His charges included conspiracy to commit health care fraud, wire fraud, and conspiracy to pay and receive illegal health care kickbacks [Justice Department Release, 2025].

The total fraudulent bills submitted exceeded $1 billion, and Medicare and other insurers paid out more than $360 million before the scheme was dismantled. The sentence handed down includes 15 years in prison and an order to pay over $452 million in restitution.

This outcome sends a crucial message about accountability.

Acting Assistant Attorney General Matthew R. Galeotti noted that the Justice Department will continue dedicating “substantial resources to the fight against telemedicine and medical equipment frauds that drain our health care benefit programs.”

Why Is This Important for Taxpayers?

Schemes like the one orchestrated by Cox don’t just affect abstract government budgets-they directly harm vulnerable citizens and steal taxpayer money. These fraudulent activities jeopardize the integrity of programs designed to help the most vulnerable, including seniors and veterans.

Deputy Inspector General for Investigations Christian J. Schrank of HHS-OIG emphasized that the massive operation was “a massive betrayal of trust, built on deception and greed.” Law enforcement partners remain vigilant in protecting Medicare, TRICARE, and VA healthcare programs from waste, fraud, and abuse [DCIS, 2025].

Conclusion

The sentencing of Gary Cox underscores the government’s commitment to aggressively pursuing those who exploit telemedicine for personal gain. While technology offers great benefits to healthcare, its misuse in coordinating large-scale fraud has devastating financial and behavioral consequences. Protecting the public requires ongoing vigilance against sophisticated criminal enterprises that target federal benefit programs.

If you suspect health care fraud, resources are available at Justice.gov.

If you or your parents, clients, or friends have been impacted by this scam – please reach out to me, we’re putting a few resources to help others avoid falling victim to these scams.

Thanks for reading.

Be careful out there.
~ Sid Peddinti, Esq.

READ THE FULL PRESS RELEASE HERE: https://www.justice.gov/opa/pr/ceo-health-care-software-company-sentenced-1b-fraud-conspiracy

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References and Sources

• Justice Department Release on Health Care Fraud Strike Force
• [Galeotti, M., 2025] Statement by Acting Assistant Attorney General on Sentencing.
• [Schrank, C., 2025] Statement by HHS-OIG Deputy Inspector General.