PHOENIX (CN) - An Arizona man who helped orchestrate the largest health care fraud in state history will spend 14 years behind bars and pay restitution of more than $605 million.
Jeffrey King, a Scottsdale DJ known as part of the city's "glam-fam couple," and his wife, Alexandra Gehrke, defrauded Medicare and other insurers of more than $1.2 billion in two years. Prosecutors said their companies filed bogus claims for "expensive, medically unnecessary" wound grafts for elderly and terminally ill patients, paying doctors illegal kickbacks to use them.
On Wednesday, a federal judge sentenced Gehrke to 15 years in prison and ordered her to repay over $614 million. Two days later in the same Phoenix courtroom, King broke down as he learned he would serve a nearly identical term. His family, who spoke of his kindness and generosity, sat in silence as his attorneys urged him to stay strong.
"I'm shocked," King barely managed to force out when U.S. District Judge Roslyn Silver asked him whether he was OK. She allowed the court to take a 15-minute recess before she returned to read his restitution and probation requirements.
Aside from King's cries, the courtroom was dead silent.
Gehrke ran two companies, Apex Medical LLC and Viking Medical Consultants LLC, that hired medically untrained "sales representatives" to find elderly and hospice patients with any kind of wound and order amniotic grafts from a specific distributor. According to the indictment, she told reps to target hospice facilities because that was "where the most money is at."
She also instructed and incentivized them to order grafts at least 46 centimeters or larger, even for smaller wounds, to inflate insurance reimbursements. Her companies received more than $279 million in illegal kickbacks from the graft distributor, which she partly funneled to her sales reps through tens of millions of dollars in unlawful payments.
Gehrke referred patients to a company co-owned by King, which hired nurse practitioners to apply the grafts. The business then billed Medicare, TRICARE, CHAMPVA and private insurers for the procedures.
Despite having no medical training, King and Gehrke ordered the nurses to ignore their own medical judgment and apply every graft requested by sales reps, even when it was medically unnecessary. That led to grafts being used on infected wounds, healed wounds and those unresponsive to treatment.
Between November 2022 and May 2024, the couple submitted $1.21 billion in false claims, including more than $960 million to federal programs. Insurers ultimately paid out nearly $615 million based on those fraudulent claims.
Like Gehrke's sentencing, the court spent the first 70 minutes of the hearing behind locked doors. But after the public was allowed in, King's attorney asked for an eight-year sentence, requesting a massive downward variance because of King's troubled childhood, which he said was riddled with abuse and neglect.
"He lived a life we wouldn't wish on our worst enemies as a child," defense attorney Brian Rafferty said. He praised King for turning his life around and finding success before entering the criminal enterprise.
King's daughter Maya asked the Judge for mercy.
"He's a disabled veteran who served his country with honor," she told Silver. "This is the first time he's found himself on the wrong side of the law."
Silver showed sympathy, but agreed with prosecutors that the troubles he faced as a child didn't directly lead to any of the actions King took. Furthermore, while his defense team painted him as a less-important asset to Gehrke's enterprise, Silver said she saw the two as equals.
"You carried it out," she said. "It couldn't have been done without you. I frankly don't see the difference between the two of you."
Before he was taken back into custody, King's attorney asked if he could hug his children one last time. U.S. Marshals didn't allow it.
Source: Courthouse News Service
