Couple pleads guilty in $1.2B wound care fraud that targeted nursing home patients

An Arizona couple has pleaded guilty to conspiracy to commit healthcare fraud and wire fraud for a $1.2 billion scheme that targeted seniors in skilled nursing facilities and other healthcare settings, persuading them to receive expensive and unnecessary wound care.

The medically-untrained pair contracted faulty sales representatives to “locate elderly patients, including hospice patients, who had wounds at any stage and order amniotic wound grafts from a specific graft distributor.”  The Department of Justice said that Alexandra Gehrke, 39, and husband Jeffrey King, 46, owned Apex Mobile Medical LLC, Apex Medical LLC, Viking Medical Consultants LLC, and APX Mobile Medical LLC.

The grafts were purchased in sizes 4-by-6 inches or larger, regardless of the patient’s wound size to ensure maximum federal reimbursement, the DOJ reported in a statement Friday. 

Kickbacks totaling $279 million were paid to the sales reps based on size and quantity of grafts sold, according to court documents. 

Gehrke and King then paid nurse practitioners a flat rate of $500 to $1,000 to apply the grafts to wounds, pressuring them to implant them against their “medical judgment.”

In fact, some of the grafts were applied on the day of or within days of a patient’s death, according to the DOJ.

Over the course of 16 months – November 2022 to May 2024 – the ploy resulted in fraudulent bills to federal programs including Medicare, TRICARE and CHAMPVA, totaling more than $960 million.

When Gehrke and King’s arrests were announced in June, the government seized luxury vehicles, gold and bank accounts worth more than $70 million, and also rounded up several co-conspirators.

Carlos Ching, 55, of Phoenix, was charged with conspiracy to commit healthcare fraud after he was paid by APX to apply allografts to Medicare patients that were procured through kickbacks and bribes. Between June 2023 and January 2024, APX fraudulently billed Medicare more than $87 million for allografts applied by Ching.

Bethany Jameson, 53, of Gilbert, AZ, also was charged with conspiracy to commit wire fraud between November 2022 and August 2023. Apex Mobile Medical and APX billed Medicare more than $71 million for allografts that she applied for.

Gehrke pleaded guilty in October 2024 and will be sentenced on Feb. 11. King pleaded guilty Friday and has yet to receive a sentencing date.

Gehrke has agreed to a restitution payment of $614,990,420, and King agreed to pay $605,690,110.