An Arizona couple, Alexandra Gehrke and Jeffrey King, has admitted to one of the biggest health care fraud cases in history. They were behind a massive scheme that resulted in over $1.2 billion in fake claims to Medicare and other health insurance programs. The fraud involved costly and unnecessary medical treatments given to elderly and terminally ill patients.
Fake Wound Treatments for Profit
Gehrke, 39, and King, 46, both from Phoenix, ran companies that tricked the system by making money from expensive wound treatments. Gehrke owned two businesses, Apex Medical LLC and Viking Medical Consultants LLC, which hired untrained sales representatives to find elderly patients with wounds. These salespeople were paid to order costly amniotic wound grafts from a particular supplier, even if the wounds were small or already healing.
To maximize profits, Gehrke made sure the sales reps only ordered large wound grafts, even if a patient only needed a small piece. She then made huge amounts of money—over $279 million—from the company selling these grafts. In turn, she paid tens of millions to the sales reps as illegal rewards for placing the orders.
King, her husband, played a key role in this fraud. He co-owned a business that worked with nurse practitioners to apply the grafts. However, instead of allowing medical professionals to use their judgment, King and Gehrke ordered them to apply the grafts to all patients, even when it was completely unnecessary. As a result, wound grafts were applied to infected wounds, wounds that were already healed, and even to wounds that showed no improvement with the treatment.
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How the Fraud Grew to $1.2 Billion
Between November 2022 and May 2024, Gehrke, King, and their companies sent more than $1.2 billion in fake medical bills to different health insurance providers. Out of this, over $960 million was billed to federal programs like Medicare, TRICARE (for U.S. military families), and CHAMPVA (for disabled veterans’ families). These fraudulent claims led to actual payments of over $614 million by federal and private health care programs.
The money Gehrke and King made from this scam was massive. They used it to build a luxurious lifestyle, purchasing expensive cars, jewelry, and even life insurance annuities worth millions. The government has already seized nearly $100 million from their assets. This includes $68 million in bank accounts, four luxury cars worth nearly $1 million, $22 million in life insurance annuities, and a large collection of jewelry and precious metals.
Both Gehrke and King have admitted to their crimes and agreed to pay back large amounts of money. Gehrke has to return $614,990,420, while King owes $605,690,110. Together, they will also give up over $410 million in illegally obtained funds.
The Legal Consequences
Gehrke pleaded guilty on October 24, 2024, to conspiracy to commit health care fraud and wire fraud. She is set to be sentenced on February 11 and faces up to 20 years in prison. King pleaded guilty on January 31, 2025, to the same charges and also faces a 20-year maximum sentence, though his sentencing date has not yet been announced.
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The case was investigated by major federal agencies, including the FBI, the Department of Health and Human Services, the Defense Criminal Investigative Service, and the Department of Veterans Affairs Office of Inspector General. The investigation and prosecution were handled by federal prosecutors and the National Rapid Response Strike Force, a group dedicated to fighting health care fraud.
This case is part of a larger effort by the government to crack down on health care fraud, which has cost the U.S. billions of dollars. Since 2007, the Health Care Fraud Strike Force has charged over 5,800 individuals for fraud schemes that have stolen more than $30 billion from federal health programs and private insurers.
Gehrke and King’s fraudulent activities not only cost taxpayers and insurance companies huge sums of money but also put vulnerable elderly and terminally ill patients at risk by subjecting them to unnecessary and possibly harmful treatments. Their sentencing will determine how much time they will spend in prison for their crimes.
