An Arizona couple, Alexandra Gehrke, 39, and Jeffrey King, 46, have pleaded guilty to orchestrating a massive fraud scheme that resulted in over $1.2 billion in false claims to Medicare and other health insurance programs. The fraudulent scheme involved the billing of medically unnecessary wound grafts for elderly and terminally ill patients, including hospice patients.
Gehrke, who ran two companies—Apex Medical LLC and Viking Medical Consultants LLC—collaborated with others to recruit untrained “sales representatives.” These representatives were tasked with finding elderly patients with wounds of any stage and ordering amniotic wound grafts, even when they were not needed or medically appropriate. Gehrke incentivized these sales representatives to order larger-sized grafts, inflating the cost of the procedures in order to maximize insurance reimbursements. She was paid over $279 million in illegal kickbacks from a graft distributor in return for her orders.
King, Gehrke’s husband, co-owned a company that contracted nurse practitioners to apply the grafts to patients. Despite having no medical training themselves, Gehrke and King instructed nurse practitioners to disregard medical judgment and apply the grafts, even to patients whose wounds had already healed, were infected, or were unresponsive to the treatment.
From November 2022 to May 2024, Gehrke, King, and their associates submitted more than $1.2 billion in false claims to various health insurance plans, including over $960 million to federal programs such as Medicare, TRICARE, and CHAMPVA. These false claims resulted in more than $614 million in payments from the insurers.
In their plea agreements, both Gehrke and King agreed to pay restitution for the fraudulent claims, with Gehrke agreeing to repay $614,990,420 and King $605,690,110. Additionally, they agreed to forfeit over $410 million in assets obtained through the fraud. The government has already seized nearly $100 million in assets, including luxury vehicles, life insurance annuities, precious metals, and bank account balances.
Gehrke pleaded guilty to conspiracy to commit health care fraud and wire fraud in October 2024, and she faces up to 20 years in prison when sentenced on February 11. King, who pleaded guilty in January 2025, also faces a maximum penalty of 20 years in prison, with his sentencing date yet to be scheduled. Both individuals await sentencing, and a federal judge will determine their final penalties based on sentencing guidelines and other statutory factors.
