June 10, 2025 | Miami, FL — A federal jury has convicted Gary Cox, 79, CEO of Arizona-based Power Mobility Doctor Rx, LLC (DMERx), for orchestrating a massive healthcare fraud conspiracy that bilked Medicare and other federal health programs out of more than $1 billion. The verdict marks one of the largest fraud convictions in the history of federal health care enforcement.
According to court documents and evidence presented at trial, Cox led a sophisticated scheme that used an internet-based platform to generate fraudulent doctors’ orders for durable medical equipment (DME), pain creams, and other medical items — many of which were medically unnecessary. These orders were then used to bill Medicare and other insurers, resulting in more than $360 million in improper reimbursements.
How the Scheme Worked
Cox and his co-conspirators acquired the personally identifiable information of hundreds of thousands of Medicare beneficiaries through misleading advertisements, offshore call centers, and deceptive mailers. Through the DMERx platform, they created fake orders for orthotic braces and other medical products — falsely stating that doctors had examined and treated the patients.
In reality, doctors were paid by telemedicine companies to sign off on orders without ever meeting patients, or after brief and medically insufficient phone calls. These companies then received illegal kickbacks from DME suppliers and pharmacies, who used the bogus documentation to submit inflated claims to federal insurers.
Cox’s role included brokering these illegal transactions, laundering funds, and manipulating documents to evade detection — including removing language from orders that could trigger Medicare audits.
Federal Response
U.S. Attorney Hayden P. O’Byrne of the Southern District of Florida condemned the scheme:
“Medicare fraud like this drains critical taxpayer resources, drives up costs, and damages public trust in our health care system. We are committed to holding those accountable who exploit vulnerable patients for profit.”
Matthew R. Galeotti, head of the Justice Department’s Criminal Division, called the case a stark reminder of widespread fraud targeting seniors:
“This was fraud at an industrial scale. The public is tired of spam calls and junk mail targeting elderly Americans. We will continue prosecuting health care criminals aggressively to protect the public and restore accountability.”
Federal Charges and Potential Sentence
Cox was convicted on multiple felony counts, including:
- Conspiracy to commit health care fraud and wire fraud (maximum 20 years)
- Three counts of health care fraud (10 years each)
- Conspiracy to pay and receive illegal kickbacks (5 years)
- Conspiracy to defraud the United States and make false statements (5 years)
A sentencing hearing will be scheduled in the coming months. A federal judge will determine the final sentence after reviewing the U.S. Sentencing Guidelines and other statutory considerations.
Investigation and Prosecution
The case was investigated by the Department of Health and Human Services Office of Inspector General (HHS-OIG), Federal Bureau of Investigation (FBI), Department of Veterans Affairs OIG, and the Defense Criminal Investigative Service (DCIS).
Prosecution was led by Trial Attorneys Darren C. Halverson and Jennifer E. Burns of the DOJ’s Criminal Division Fraud Section, with assistance from Trial Attorneys Andrea Savdie, Shane Butland, and Evan N. Schlom.
Christian J. Schrank, Deputy Inspector General for Investigations at HHS-OIG, emphasized the broader implications:
“This defendant betrayed the public trust by prioritizing profit over patient care. We have zero tolerance for those who exploit federal health care programs and the people they serve.”
Background on the Strike Force
The DOJ’s Health Care Fraud Strike Force, which led the prosecution, has charged over 5,800 defendants since 2007, uncovering more than $30 billion in fraudulent billings to government and private insurers.
More information on the Health Care Fraud Unit is available at:
👉 www.justice.gov/criminal-fraud/health-care-fraud-unit
Note: All defendants are presumed innocent until proven guilty in a court of law. The charges referenced are based on the final trial verdict.
