PHOENIX — A couple from Arizona has admitted to their role in a massive health care fraud scheme that involved $1.2 billion in false claims. The U.S. Department of Justice reported that Alexandra Gehrke and Jeffrey King misled insurance providers by targeting elderly and terminally ill patients through their companies, Apex Medical LLC and Viking Medical Consultants LLC, from November 2022 to May 2024. They submitted over $960 million in claims to federal programs like Medicare, TRICARE, and CHAMPVA.
On October 24, 2024, Gehrke, who oversaw both companies, pleaded guilty to conspiracy to commit health care fraud and money wire fraud. She faces up to 20 years in prison, with her sentencing set for February 11. King followed suit with his guilty plea on Friday, also facing the same potential punishment, though his sentencing date is still pending.
As part of their plea agreements, Gehrke agreed to pay nearly $615 million in restitution, while King’s amount is close to $606 million. They have also committed to returning over $410 million acquired through their illegal activities. Currently, the federal government has seized around $100 million in assets from the couple, including luxury cars worth over $980,000.
So, how did they pull off this scheme? Gehrke, 39, bribed sales reps to find elderly patients with wounds, regardless of their severity. They ordered “amniotic wound grafts” that were larger than necessary to maximize insurance payouts. King, 46, would then manage the operations, bringing in nurse practitioners to administer these grafts, despite his and Gehrke’s lack of medical training. In some cases, the patients had wounds that were already healed or not suitable for the grafts they purchased.
The fraudulent sales reps earned tens of millions of dollars for their role in this operation. An investigation was conducted by several agencies, including the FBI and the Department of Health and Human Services.
This case raises serious concerns about ethics in health care. It reminds us how vulnerable systems can be exploited for personal gain, putting patients at risk.
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