CEO Convicted in Massive $1 Billion Health Care Fraud Scheme Targeting Medicare

In a significant victory against health care fraud, Gary Cox, the 79-year-old CEO of Power Mobility Doctor Rx, LLC (DMERx), was convicted by a federal jury on Tuesday, June 3, 2025.

Cox was found guilty for his central role in a sophisticated conspiracy that generated false doctors' orders, leading to fraudulent bills to Medicare and other federal health care programs exceeding $1 billion.

According to the Department of Justice, Cox and his co-conspirators operated an internet-based platform, DMERx, which served as the hub for this extensive fraud. The scheme targeted hundreds of thousands of Medicare beneficiaries through misleading mailers, television advertisements, and calls from offshore call centers. These tactics were used to obtain beneficiaries' personal information and their agreement to accept medically unnecessary items like orthotic braces and pain creams.

Here's how the scheme worked:

DMERx connected pharmacies, durable medical equipment (DME) suppliers, and marketers with telemedicine companies.
These telemedicine companies accepted illegal kickbacks and bribes in exchange for doctors signing off on orders without proper medical examination or, in some cases, any interaction with the beneficiary at all.
Cox and his associates profited by coordinating these illegal transactions and referring the fraudulent orders.
To avoid detection, the conspirators used sham contracts and even removed "dangerous words" from doctors' orders that might trigger audits.

The fraudulent claims led to Medicare and other insurers paying out over $360 million.

Matthew R. Galeotti, Head of the Justice Department’s Criminal Division, stated, "The defendant orchestrated a scheme to defraud government health care benefit programs on a massive scale... The Criminal Division will continue to aggressively prosecute health care fraud schemes to hold criminals accountable, protect the vulnerable, and recover financial losses.”

Officials from the Department of Veterans Affairs Office of Inspector General (VA OIG), Health and Human Services Office of Inspector General (HHS-OIG), and the FBI echoed the commitment to investigating and prosecuting such crimes, emphasizing the exploitation of vulnerable patients and the betrayal of public trust.

Cox was convicted on multiple counts, including conspiracy to commit health care fraud and wire fraud (carrying a maximum of 20 years in prison), three counts of health care fraud (up to 10 years each), conspiracy to pay and receive health care kickbacks (up to 5 years), and conspiracy to defraud the United States (up to 5 years). A sentencing hearing will be scheduled at a later date.

This case was investigated by HHS-OIG, FBI, VA-OIG, and DCIS, and is part of the broader efforts by the Health Care Fraud Strike Force Program, which has charged over 5,800 defendants involved in billing federal health care programs and private insurers more than $30 billion since March 2007.

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