PHOENIX — An Arizona couple has pleaded guilty to orchestrating a $1.2 billion health care fraud scheme that involved submitting fraudulent claims for wound grafts prescribed to elderly and terminally ill patients. The U.S. Department of Justice announced that Phoenix residents Alexandra Gehrke and Jeffrey King ran the operation through their companies, Apex Medical LLC and Viking Medical Consultants LLC, between November 2022 and May 2024.
More than $960 million of the false claims were submitted to Medicare, TRICARE, and CHAMPVA, making it one of the largest health care fraud cases in Arizona history.
Gehrke, who managed the two companies, pleaded guilty on October 24, 2024, to conspiracy to commit health care fraud and wire fraud. She faces up to 20 years in prison at her sentencing on February 11. King pleaded guilty Friday and faces the same penalty, though his sentencing date has not yet been scheduled.
As part of their plea agreements, Gehrke agreed to pay $614.9 million in restitution, while King agreed to repay $605.7 million. The couple has also pledged to return more than $410 million in illicit gains. Federal authorities have already seized approximately $100 million of their assets, including four luxury cars valued at nearly $1 million.
How the scheme worked
Gehrke, 39, bribed sales representatives to find elderly and hospice patients with any type of wound, regardless of medical necessity. These representatives were instructed to order large amniotic wound grafts—at least 4×6 cm—to maximize insurance reimbursements.
King, 46, then oversaw the treatment process, despite having no medical training. He and Gehrke coerced nurse practitioners into applying the unnecessary wound grafts, even on healed wounds or patients who would not benefit from the treatment.
Authorities say sales representatives involved in the scheme received tens of millions of dollars in kickbacks.
The case was investigated by the FBI, the Health and Human Services Office of Inspector General, the Defense Criminal Investigative Service, and the Veterans Affairs Office of Inspector General.
Assistant U.S. Attorney Matthew Williams is leading the prosecution.
This case follows another recent indictment of an Arizona couple accused of running fraudulent medical clinics nationwide that offered fake cancer treatments.