An Arizona man has been sentenced to 15 years in federal prison after being convicted in one of the largest telemedicine fraud cases ever brought to trial. In addition to prison time, the court ordered him to pay more than $452 million in restitution for helping orchestrate a scheme that drained over $1 billion from Medicare and other federal health care programs.
According to court records, 79-year-old Gary Cox of Maricopa County was the CEO of Power Mobility Doctor Rx, LLC (DMERx). Prosecutors say Cox ran an internet-based platform that generated fake doctors’ orders used to justify fraudulent insurance claims for medically unnecessary braces, pain creams, and other medical items.
The operation targeted hundreds of thousands of Medicare beneficiaries, many of them seniors, through misleading mailers, television ads, and calls from offshore call centers. Victims were convinced to hand over personal information and agree to receive medical products they didn’t need.
Behind the scenes, Cox and his co-conspirators connected telemarketers, pharmacies, and durable medical equipment suppliers with telemedicine companies willing to accept illegal kickbacks. Doctors were paid to sign off on orders without proper exams — sometimes after nothing more than a brief phone call, and in some cases with no patient interaction at all.
Those fraudulent orders falsely claimed patients had been examined and treated. Medicare and insurance providers ultimately paid out more than $360 million based on those bogus claims. Investigators testified that the scheme was deliberately hidden through sham contracts and by removing what conspirators referred to as “dangerous words” that could trigger audits.
In June 2025, a jury convicted Cox on multiple felony counts, including conspiracy to commit health care fraud and wire fraud, health care kickback conspiracies, and making false statements in health care matters.
Federal authorities made it clear this case sends a strong warning. Officials emphasized that telemedicine fraud doesn’t just steal taxpayer money — it undermines care for vulnerable patients and strains already burdened health care programs meant to protect seniors and military families.
The investigation was conducted by the FBI, the Department of Health and Human Services Office of Inspector General, the VA Office of Inspector General, and the Defense Criminal Investigative Service.
Prosecutors from the Justice Department’s Criminal Division handled the case as part of the Health Care Fraud Strike Force Program, which has charged thousands of defendants responsible for tens of billions in fraudulent claims over the past decade.
Source: U.S. Department of Justice
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