Arizona couple pleads guilty to $1.2 billion in health care fraud involving the terminally ill
Feb 1, 2025, 8:00 PM
PHOENIX — An Arizona couple pleaded guilty to inducing $1.2 billion in fraudulent health care claims related to purchasing wound grafts for elderly and terminally ill patients, according to the U.S. Department of Justice.
Phoenix residents Alexandra Gehrke and Jeffrey King targeted patients via Apex Medical LLC and Viking Medical Consultants LLC during the period of November 2022 to May 2024. More than $960 million of the false claims were submitted to federal health care programs, which included Medicare, TRICARE and CHAMPVA.
Gehrke, who managed the two companies, pleaded guilty to conspiracy to commit health care fraud and money wire fraud on Oct. 24, 2024. Her sentencing date is set for Feb. 11, where she could earn up to 20 years in prison for her crimes. King followed her admission with his own on Friday, and he will face the same penalty. His sentencing has not been scheduled yet.
Gehrke agreed to pay $614,990,420 in restitution and King’s plea agreement was $605,690,110. Additionally, the Arizona couple said they will pay back more than $410 million of their illegally obtained funds. As of Friday, the federal government has repossessed roughly $100 million of Gehrke and King’s resources, including four cars worth more than $980,000.
How did the Arizona couple commit health care fraud?
Gehrke, 39, bribed sales representatives at each company to locate both elderly and hospice patients who had wounds of any size or degree. They were then tasked to order “amniotic wound grafts” at least 4×6 cm, so the profit from health insurance reimbursement would be greater.
Gehrke passed off the patients to King, 46, who co-owned an unnamed company that had contracted nurse practitioners to apply the grafts. The Arizona couple, neither of whom have received medical training, convinced nurse practitioners to provide unnecessary service.
Some of the patient’s wounds being treated were already healed or non-respondent to the types of grafts being purchased, according to a press release.
Sales representatives contracted by Gehrke’s Apex and Viking received “tens of millions of dollars” from their assistance in the scheme.
The FBI, Health and Human Services Office of Inspector General, Defense Criminal Investigative Service and Veterans Affairs Office of Inspector General all investigated this case.
Matthew Williams, assistant U.S. attorney for the District of Arizona, is one of two responsible for prosecuting Gehrke and King.
On Jan. 22, an Arizona couple was indicted for running nationwide medical clinics that offered bogus cancer treatments.