The DOJ announced that Arizona couple, Alexandra Gehrke and Jeffrey King, have pleaded guilty to a $1.2 billion health care fraud scheme stemming from the use of amniotic products. Gehrke pleaded guilty to conspiracy to commit health care fraud and wire fraud in October 2024, and King pleaded guilty to the same charges on January 31st.
According to the DOJ, Gehrke and King orchestrated a scheme through their companies, Apex Medical LLC and Viking Medical Consultants LLC, targeting elderly and terminally ill patients. They bribed untrained sales representatives to locate elderly patients with wounds and order medically unnecessary amniotic wound grafts. The DOJ alleged that Gehrke received $279 million in illegal kickbacks from the amniotic product distributor in exchange for graft orders. The DOJ further alleged that the Arizona duo somehow convinced nurse practitioners to disregard their medical judgment and apply medically unreasonable grafts to healed wounds, infected wounds, and wounds that had not previously responded to the use of amniotic products. In turn, the couple fraudulently submitted $960 million in false claims to Medicare, TRICA, and CHAMPVA. They submitted a total of $1,212,005,778 in fraudulent claims to commercial insurance plans and the federal health care programs.
Gehrke and King now face up to 20 years in prison. The couple agreed to pay restitution in the amounts of $614,990,420 and $605,690,110, respectively. Additionally, they agreed to collectively forfeit over $410 million in funds that they obtained from the fraud. And the government has already seized approximately $100 million in assets from the couple.
The attorneys at Chilivis Grubman represent clients of all types and sizes in connection to False Claims Act investigations and litigation. If you need assistance with such a matter, please contact us today.