On January 31, 2025, the government announced an update in a case involving a Phoenix, Arizona couple pleading guilty to causing the submission of over $1.2 billion of fraudulent claims to Medicare and other health insurance programs. The couple submitted claims for costly, medically unnecessary wound grafts applied to elderly and terminally ill patients.

Alexandra Gehrke, 39, and her husband, Jeffrey King, 46, conspired to carry out their elaborate scheme from November 2022 to May 2024. Via companies they owned, operated, and controlled, Gehrke, King, and co-conspirators submitted $1,212,005,778 in false and fraudulent claims to health insurance plans and $960 million to federal health care programs (Medicare, TRICARE, and CHAMPVA). Federal and private health care insurers paid $614,990,420 from the false and fraudulent claims.

Gehrke’s two companies, Apex Medical LLC and Viking Medical Consultants LLC, contracted medically untrained “sales representatives” to find elderly patients with wounds at any stage and directed them to order amniotic wound grafts from a specific graft distributor. Gehrke directed and financially incentivized the sales representatives to order grafts of at least 4×6 centimeters, regardless of whether the wound was smaller, to maximize health insurance reimbursements.

Through companies she owned and operated, Gehrke received more than $279 million in illegal kickbacks from the graft distributor in return for the orders. Gehrke paid the sales representatives tens of millions of dollars in unlawful kickbacks. Then, Gehrke referred the patients to a company co-owned by King, which hired nurse practitioners to apply the grafts. King’s company fraudulently billed Medicare, TRICARE, CHAMPVA, and commercial insurance plans.

Despite Gehrke and King’s lack of medical training, they directed the nurse practitioners during care, instructed them to ignore their medical training, and apply all grafts ordered by the sales representatives. As a result, medically unnecessary grafts were applied to infected wounds, healed wounds, and wounds that did not respond to the grafts.

In their plea agreements, Gehrke and King agreed to pay restitution in the amounts of $614,990,420 and $605,690,110 and will forfeit over $410 million. The government seized assets and luxury items amassed from the scheme’s funds.

On Oct. 24, 2024, Gehrke pleaded guilty to conspiracy to commit health care fraud and wire fraud. Her sentencing is scheduled for February 11, 2025. On January 31, 2025, King pleaded guilty to the same charges as Gehrke. His sentencing date will be announced.

If you think you might have information relating to healthcare fraud, kickbacks, or would like to learn more about what it means to be a whistleblower, please contact us. We will connect you with an experienced member of the Constantine Cannon whistleblower team for a free and confidential consult.

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