Gary Cox, the 79-year-old CEO of Power Mobility Doctor Rx, LLC (DMERx), was convicted by a federal jury for leading a huge fraud scheme that cheated Medicare and other government health programs out of more than $1 billion. Medicare helps older Americans pay for medical care, but Cox and his team took advantage of vulnerable seniors to carry out their scam.
The scheme targeted hundreds of thousands of Medicare beneficiaries. Cox and his co-conspirators sent misleading mail, TV ads, and calls from offshore centers to trick seniors into giving their personal information and agreeing to receive medical supplies they didn’t actually need. These included orthotic braces and pain creams. Cox’s company used an online platform to create fake doctors’ orders to get these unnecessary items shipped to seniors.
How the Fraud Scheme Worked
Cox controlled the DMERx internet platform, which generated false doctors’ orders that claimed a doctor had examined the Medicare patients. However, the doctors involved were paid by telemedicine companies to sign these orders without properly checking the patients. Sometimes doctors did not speak to the patients at all or only had a very brief phone call.
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These fake orders were then sent to pharmacies and medical equipment suppliers. These suppliers paid illegal kickbacks—secret bribes—to get the orders, and then billed Medicare and other insurers more than $1 billion for the products. Medicare ended up paying over $360 million based on these false claims.
To hide their fraud, Cox and his team used fake contracts and removed “dangerous words” from doctors’ orders to avoid Medicare audits.
Legal Actions Against Gary Cox
Gary Cox was found guilty of conspiracy to commit healthcare fraud and wire fraud, three counts of healthcare fraud, conspiracy to pay and receive kickbacks, and conspiracy to defraud the United States. He faces up to 20 years in prison for some charges, with other sentences adding up to several more years. A judge will decide his exact sentence later.
Official Statements from Authorities
Matthew R. Galeotti, Head of the Justice Department’s Criminal Division, said, “The defendant orchestrated a scheme to defraud government health care benefit programs on a massive scale… The Criminal Division will continue to aggressively prosecute healthcare fraud schemes to hold criminals accountable.”
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David Spilker, Special Agent in Charge of the Department of Veterans Affairs Office of Inspector General’s Southeast Field Office, added, “Fraud schemes perpetrated against veterans are abhorrent… The VA OIG will continue to combat these schemes to ensure the integrity of VA’s healthcare programs.”
Christian J. Schrank, Deputy Inspector General for Investigations at the Department of Health and Human Services Office of Inspector General (HHS-OIG), said, “The defendant deliberately exploited the federal health care system by prioritizing personal enrichment over the medical needs of vulnerable patients… There is zero tolerance for those who abuse federal health care programs.”
Mark McCormick, Assistant Special Agent in Charge of the FBI Miami Field Office, noted, “Medicare fraud and other healthcare-related frauds are, unfortunately, nothing new… Our message is clear: you will be caught, and you will face justice.”
The case was investigated by HHS-OIG, FBI, VA-OIG, and DCIS. Prosecutors from the Justice Department’s Criminal Division led the trial, with assistance from various trial attorneys.
