CEO Found Guilty in $1 Billion Medicare Scam

WEEKLY SCAM ALERTS
Week of June 8, 2025

• Medicare Fraud Prevention Week 2025

• Florida Prisoners Smuggled in Cellphones to Scam Seniors

• Schwab Launches Senior Scam Investigation Team

SENIOR SCAM NEWS
$1 Billion Medicare Scam Exposed During Medicare Fraud Prevention Week

This week marks Medicare Fraud Prevention Week—a time dedicated to raising awareness about scams targeting our nation’s seniors and protecting one of our most vital healthcare programs. Unfortunately, we couldn’t ask for a more shocking reminder of what’s at stake. Before we dig into the story, take a few minutes watch this video and learn how to read your Medicare statement and spot fraud. Medicare fraud costs taxpayers over $100 BILLION per year. Together, we can stop it.

The $1 Billion Medicare Fraud Scheme

Now, let’s get back to the story.

A federal jury has just convicted Gary Cox, the 79-year-old CEO of a health software company, for orchestrating a $1 Billion Medicare fraud scheme. His company, DMERx, didn’t just bend the rules—it broke them wide open, exploiting the trust of hundreds of thousands of seniors across the United States.

Here’s how the scam worked—and how you can protect yourself from similar threats.

The Scheme: A Web of Lies and Fake Doctor’s Orders

Cox and his co-conspirators used DMERx, an internet-based platform, to generate fraudulent doctors’ orders for orthotic braces, pain creams, and other medical items. These products were often unnecessary, and in many cases, the victims never even requested them.

So how did they pull it off?

They used misleading TV ads, mailers, and offshore call centers to collect personal information from seniors—many of whom believed they were signing up for free or helpful medical services. But instead of helping patients, the team at DMERx sent that information to telemedicine companies, which were paid kickbacks to generate false medical paperwork.

Doctors signed off on the prescriptions without ever seeing or speaking to the patient. Then, pharmacies and durable medical equipment (DME) suppliers—also in on the scam—billed Medicare for over $1 billion using the fake orders.

In total, Medicare and other federal programs paid out more than $360 million before the fraud was exposed.

A Trail of Harm

This wasn’t just a case of paperwork gone wrong. Cox’s scheme:

• Exploited seniors’ trust in healthcare communications

• Misused personal data obtained through deceptive marketing

• Wasted taxpayer dollars

• And potentially delayed real care for people who needed it

Justice Delivered—But the Threat Remains

Cox now faces serious consequences, including:

• Up to 20 years for conspiracy to commit health care and wire fraud

• 10 years for each count of healthcare fraud

• And 5 years for conspiracy to pay illegal kickbacks and make false statements

His sentencing will be scheduled at a later date. But while justice is being served in this case, Medicare fraud isn’t going away.

Scammers continue to impersonate health providers, insurance companies, and federal agencies—all in an effort to steal your information and your money.

The Senior Medicare Patrol is here to help educate you on prevention and reporting Medicare fraud. Click here to report Medicare fraud to your local SMP office. Click here to get your hands on the SMP’s Health Care Tracker to help prevent fraud.

📢 What To Do If You’ve Been Targeted

If you're over 60 or helping a loved one navigate fraud, take action right away:

• 📞 Call the National Elder Fraud Hotline:
  1-833-FRAUD-11 (1-833-372-8311)
  Trained professionals will guide you through the next steps—confidentially and with compassion.

• 💻 Report it online at the FBI’s Internet Crime Complaint Center:
  www.ic3.gov

• 🚔 Contact your local police department, even if the scam “didn’t work.” Every report builds a case.

What to Include in Your Report:

✅ Names, emails, or numbers used by the scammer
✅ Any websites, text messages, or voicemails
✅ Details of any money sent—cash, wire transfers, gold, or gift cards
✅ Screenshots or receipts, if available