A sweeping federal investigation has culminated in the conviction of Gary Cox, former CEO of Power Mobility Doctor Rx, LLC (DMERx), for orchestrating one of the largest healthcare fraud schemes in U.S. history. The following documentary article draws exclusively from U.S. government sources to detail the case, its impact, and what it reveals about vulnerabilities in the nation’s healthcare system.
The Scheme Unveiled
Gary Cox, 79, of Maricopa County, Arizona, led DMERx, an internet-based platform that generated fraudulent physicians’ orders for orthotic braces, prescription creams, and other medical items. The scheme targeted hundreds of thousands of Medicare beneficiaries, luring them with misleading mailers, television advertisements, and offshore call center calls to obtain their personal information and consent to receive unnecessary medical products169.
Cox and his co-conspirators then used this information to create false doctors’ orders, which were transmitted to pharmacies, durable medical equipment (DME) suppliers, and marketers. These entities, in turn, paid illegal kickbacks and bribes to telemedicine companies and practitioners who signed the orders—often with little or no patient interaction and no regard for medical necessity123489.
How the Fraud Worked
- Kickbacks and Sham Contracts: Pharmacies, DME suppliers, and marketers paid Cox and his associates for coordinating these illegal transactions. Sham contracts and agreements were used to disguise the true nature of these arrangements and to evade detection by federal auditors238.
- Telemedicine Manipulation: The DMERx platform was programmed to generate fraudulent doctors’ orders, often removing references to telemedicine to further conceal the fraud from Medicare audits38.
- False Claims: The fraudulent orders were used to bill Medicare and other federal health programs for over $1 billion in claims, with more than $360 million actually paid out by these programs for products that were medically unnecessary and ineligible for reimbursement12349.
The Investigation and Prosecution
Federal authorities, including the FBI, Department of Health and Human Services, Department of Veterans Affairs, and IRS Criminal Investigation, conducted a multi-agency probe into the scheme346. The case was prosecuted as part of “Operation Brace Yourself,” a nationwide crackdown on healthcare fraud.
Cox was convicted by a federal jury in Miami on six counts, including:
- Conspiracy to commit healthcare fraud and wire fraud (maximum 20 years)
- Three counts of healthcare fraud (maximum 10 years each)
- Conspiracy to pay and receive kickbacks (maximum 5 years)
- Conspiracy to defraud the United States and make false statements (maximum 5 years)689
He now faces up to 60 years in federal prison, with sentencing pending as of June 20256.
The Broader Impact
Federal prosecutors emphasized the scale and cost of the fraud:
“The defendant orchestrated a scheme to defraud government health care benefit programs on a massive scale… Fraud of this kind wastes taxpayer dollars and increases the cost of healthcare for all Americans.”
— U.S. Attorney for the Southern District of Florida Hayden P. O’Byrne6
The case highlights the vulnerabilities in Medicare’s oversight of telemedicine and DME claims, and the ongoing need for robust enforcement to protect taxpayer resources.
Conclusion
Gary Cox’s conviction marks a significant victory in the fight against healthcare fraud. The case serves as a warning to others who might seek to exploit government health programs and underscores the commitment of federal agencies to prosecute large-scale fraud134689.
All information in this article is sourced from official U.S. government releases and court documents.
- https://www.justice.gov/opa/pr/ceo-health-care-software-company-convicted-1b-fraud-conspiracy
- https://www.justice.gov/criminal/media/1374716/dl
- https://www.irs.gov/compliance/criminal-investigation/participation-in-coordinated-national-health-care-fraud-enforcement-action
- https://www.vaoig.gov/investigative-updates
- https://oig-kan-dns1.oig.hhs.gov/fraud/enforcement/cmp/cmp-ae.asp
- https://www.local10.com/news/local/2025/06/06/ex-healthcare-software-company-executive-faces-up-to-60-years-in-prison-prosecutors-say/
- https://www.govinfo.gov/content/pkg/FR-2007-12-21/pdf/E7-24774.pdf
- https://www.afslaw.com/perspectives/investigations-blog/ceo-health-care-software-company-convicted-1-billion-medicare
- https://www.beckershospitalreview.com/legal-regulatory-issues/ceo-of-healthcare-software-company-convicted-for-role-in-1b-fraud-scheme/
Sources: tv503.com/new-number-1519/