CEO jailed for orchestrating multibillion-dollar Medicare fraud scheme
An Arizona CEO who led a healthcare software company was sentenced to 15 years in prison and ordered to pay more than $452 million in restitution after being convicted in one of the largest telemedicine fraud cases ever. Gary Cox, 79, ran a platform that created fake doctor’s orders, which were then used to submit fraudulent claims to Medicare and other federal health programs. Authorities said the scheme generated more than $1 billion in fraudulent billings.
Cox and his colleagues ran a company called Power Mobility Dr. Rx, LLC, better known as DMRX. Through this platform, they connected marketers with pharmacies, medical equipment suppliers, and telemedicine services willing to accept illegal kickbacks in exchange for signed physician orders. These orders claimed that patients needed medical supplies, even when no valid medical diagnosis was made. The scheme targeted millions of Medicare beneficiaries, many of whom received items they did not need. Officials said the company used deceptive mailers, television ads, and calls from offshore call centers to enroll seniors in the program.
Fraudulent orders misrepresented that a doctor had examined and treated patients. In fact, some doctors were paid to sign forms after only brief or nonexistent interactions with beneficiaries. Medical device 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 covered up the scheme by forging contracts and removing wording from doctors’ orders that could trigger an audit.
Officials described the actions of the Arizona CEO and his co-conspirators as a massive betrayal of the public trust. Acting Assistant Attorney General Matthew Gallotti said the fraud drained taxpayer funds and targeted vulnerable populations, including senior citizens. Officials stressed that telemedicine schemes that exploit federal health programs can directly harm the people they help. Agencies involved in the investigation include the FBI, the Department of Health and Human Services Office of the Inspector General, the Inspector General’s Office of Veterans Affairs, and the Defense Criminal Investigative Service. These agencies worked together to bring down 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 to coordinate kickbacks and refer participating physicians to order fulfillment suppliers and telemarketers. An elaborate system of falsified documents and financial incentives allowed the fraud to continue for years before it was finally discovered. Federal prosecutors highlighted the size and sophistication of the scheme during the trial, calling it one of the largest telephone-based Medicare fraud cases ever brought to justice.
The Justice Department said the sentencing sends a clear message that people who exploit telemedicine to steal from federal health programs will face serious consequences. Officials also noted that ongoing efforts are underway to prevent similar schemes, protect patient safety and maintain the integrity of government-funded health programs. Programs like Medicare and TRIER are meant to provide critical care to vulnerable populations, and fraud schemes can disrupt the delivery of essential services. The legal teams involved in the prosecution worked for the Criminal Division’s Fraud Section, including a special unit focused on health care fraud.
Cox was convicted in June 2025 of multiple charges, including committing 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 track down complex financial and medical fraud schemes and hold executives accountable for actions that hurt patients and taxpayers alike. Officials emphasized 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 healthcare software company convicted in braud 1B fraud conspiracy
Healthcare software CEO sentenced to 15 years, ordered to pay $452 million
