\u201cProlonged cocaine abuse most seriously impacts the cognitive domains controlling attention, impulsivity,\u201d a court document filed last month pointed out.<\/p>\n
\u201cCocaine abuse also can impact a person\u2019s assessment of risk and reward.\u201d<\/p>\n
Alexandra Gehrke, one half of Scottsdale\u2019s \u201cglam-flam couple\u201d who fraudulently billed insurance companies more than $1 billion, faces two decades in prison when a federal judge rules on her case this week.<\/p>\n
Gehrke\u2019s attorney is begging for a reduced sentence, as \u201cMs. Gehrke has struggled with mental health, disability, and substance abuse issues for her entire life.\u201d<\/p>\n
A federal prosecutor counters Gehrke deserves a heavy-handed sentence for running \u201cone of the most financially impactful health care fraud schemes in American history.\u201d<\/p>\n
Gehrke is to be sentenced Wednesday, Sept. 24, at Sandra Day O’Connor United States Courthouse in downtown Phoenix. Jeffrey King, the DJ-turned-fraudster who is the other half of the glamorous Scottsdale couple, will be sentenced Oct. 7.<\/p>\n
The two were married in early 2024; in less than a year, the newlyweds went from saying \u201cI do\u201d to \u201cI did.\u201d<\/p>\n
On June 17, 2024, either prepared for a hard-earned honeymoon or ready to run, they waited to board a London flight, adjusting gold bracelets and $30,000 watches.<\/p>\n
They walked out of Phoenix Sky Harbor International Airport in steel bracelets.<\/p>\n
After first insisting they were innocent, by the end of 2024 each admitted guilt to healthcare fraud in the face of a growing mountain of evidence.<\/p>\n
Gehrke, 39, and King, 50, individually admitted to \u201ctargeting elderly Medicare patients, many of whom were terminally ill in hospice care, for medically unnecessary wound grafts.\u201d<\/p>\n
Billing nearly twice as much, the deviant duo settled for a massive payout: \u201cMedicare and other health care benefit programs paid over $600 million based on the false and fraudulent claims they submitted for these vulnerable beneficiaries,\u201d according to the U.S. Attorney’s Office.<\/p>\n
According to the original indictment, Gehrke and King started their skin-graft scheme at the end of 2022 \u2013 stealing hundreds of millions from insurance companies in barely more than a year.<\/p>\n
Many of the patients they targeted through a seedy sales force and kickback-pocketing nurses were hospice patients on their deathbeds.<\/p>\n
Aversions, anxiety, abuse<\/strong><\/p>\n On Aug. 26, Joshua Lowther, Gehrke\u2019s Atlanta-based attorney, filed a \u201cmotion for downward variance\u201d \u2013 asking the federal court to chop a recommended 15-and-a-half year sentence to 10 years.<\/p>\n He argues various factors led his client to make poor decisions.<\/p>\n \u201cMs. Gehrke, while emphasizing again that she makes no excuses for her criminal conduct, submits that her prolonged drug abuse impacted her ability to assess risks, and to plan her actions according to those risks, thereby contributing\u2014at least in part\u2014to her unwillingness to terminate (or even avoid) that conduct,\u201d Lowther wrote.<\/p>\n It won\u2019t happen again, the defense attorney promised:<\/p>\n \u201c(Gehrke) is confident, based on her now-specific awareness of the need to address her mental health and drug addiction issues meaningfully and to maintain her mental health and sobriety, that she will be able to conduct herself in a law-abiding manner in the future.\u201d<\/p>\n The attorney stated Gehrke\u2019s \u201cstruggles with mental health and disability began during her childhood. Her undiagnosed Autism Spectrum Disorder, which she suffered along with Attention-Deficit Disorder, severe anxiety, and depression, colored her interactions with her family and peers.\u201d<\/p>\n Gehrke\u2019s autism symptoms \u201cfirst appeared in preschool, where she showed extreme aversions to persons who were in her presence, and anxiety based on her perceived lack of control of her environment,\u201d according to Lowther.<\/p>\n \u201cShe also had severe aversions to touch, including any physical affection from her parents, which contributed to her mother and father\u2019s confusion at the time.\u201d<\/p>\n Throughout her childhood, the condition \u201cexacerbated her being bullied and suffering social isolation.\u201d<\/p>\n An emotionally-absent father made her more detached, according to the lawyer.<\/p>\n \u201cMs. Gehrke\u2019s father\u2019s actions did not alleviate her childhood struggles: although he provided for her and her mother financially, he showed little patience with Ms. Gehrke and spent very little of his time with her.<\/p>\n \u201cHe often remarked that he never wanted children.\u201d<\/p>\n Gehrke\u2019s mother \u201cexerted her best efforts to help Ms. Gehrke emotionally,\u201d but \u201cmisunderstood Ms. Gehrke\u2019s emotional needs and the actual extent of Ms. Gehrke\u2019s mental anguish that resulted from her undiagnosed disability.\u201d<\/p>\n Plagued by \u201cseverely-low self-esteem, anxiety, and depression \u2026 Ms. Gehrke used alcohol and controlled substances in an effort to cope with her emotional suffering.\u201d<\/p>\n Her drinking and drug use started in her teen years, \u201ccontinuing through a date shortly before her arrest.\u201d<\/p>\n Though her attorney says Gehrke stopped drinking and snorting cocaine after completing an alcohol-rehabilitation program, \u201cshe was unable to maintain sobriety from cocaine, relapsing in 2019.<\/p>\n \u201cWith the exception of her having attended a seven-day detoxification program in 2021, she continued to use the drug to varying degrees (but for substantial periods of time, daily) until a short time before her arrest.\u201d<\/p>\n Lowther\u2019s underscored note to U.S. Judge Roslyn Silver: \u201cA person\u2019s use of cocaine has well-documented, negative impacts on that person\u2019s ability to function cognitively.\u201d<\/p>\n \u2018The most vulnerable\u2019<\/strong><\/p>\n Don\u2019t buy that, sneers Shane Butland, a U.S. attorney.<\/p>\n In his memorandum of sentencing filed Aug. 4, Butland comes out swinging:<\/p>\n \u201cGehrke not only executed the largest health care fraud scheme in the history of Arizona \u2026 but she did so by targeting the most vulnerable population \u2013 dying seniors in hospice care \u2013 because, in her words, that was \u201cwhere the most money (was) at.\u201d<\/p>\n Noting this is \u201cthe first prosecution in the country involving fraudulent Medicare claims for amniotic wound allografts,\u201d Butland paints Gehrke as the mastermind behind the operation:<\/p>\n \u201cGehrke set up companies to facilitate her illegal referrals, wooed co-conspirators with promises of immediate riches, and devised a business model that rewarded greed at the expense of patient care.\u201d<\/p>\n After targeting nursing homes and hospice facilities, \u201cBecause Medicare paid per square centimeter for these allografts, Gehrke directed the sales representatives to order the largest sizes of allografts available, even for small and unserious wounds.\u201d<\/p>\n Gehrke juggled companies to create \u201cthe illusion of independence between the marketing entity (Apex) and the medical practice (APX).\u201d<\/p>\n Gehrke\u2019s scheme was fueled by massive payouts to her untrained but greedy sales force, according to Butland:<\/p>\n \u201cAt least 12 sales representatives received over $1 million in less than a year and four received over $5 million each.\u201d<\/p>\n She also contracted nurse practitioners and paid them \u201cbetween $500 and $1,000 each time they applied allografts to a patient.\u201d<\/p>\n The billing trail is grisly.<\/p>\n \u201cMedicare claims data reflects that APX billed over $16 million for allografts applied to a single patient, APX billed over $1 million for allografts applied to another 272 patients.\u201d<\/p>\n The topper: \u201cAPX submitted claims for allografts applied to seven patients on the dates of their death.\u201d<\/p>\n The U.S. Attorney’s Office urges the federal judge to ignore Lowther\u2019s teary tale.<\/p>\n \u201cNothing about Gehrke\u2019s personal history or characteristics warrants a downward departure or variance from her Guidelines range for this serious, prolonged and unprecedentedly egregious fraud offense,\u201d Butland wrote.<\/p>\n Indeed, compared to the modern-day Dickensian drama penned by Gehrke\u2019s defense attorney, Butland paints a pretty portrait.<\/p>\n \u201cGehrke had a pleasant childhood,\u201d Butland countered. \u201cGehrke reports that she was an only child raised by both parents and enjoyed a childhood free from abuse, neglect, and serious family conflict.\u201d<\/p>\n The prosecutor noted \u201cher father was an attorney who owned a law practice in Scottsdale and her mother, with whom she has maintained a close relationship, was a homemaker.\u201d<\/p>\n Gehrke graduated from Arcadia High School, then attended the Fashion Institute of Design and Merchandising in Los Angeles.<\/p>\n After graduating from Arizona State University, her profile describes her as \u201cOwner and Curator of two successful Art Galleries in Downtown Los Angeles\u201d from 2008-12.<\/p>\n Gehrke stated on LinkedIn she worked as a legal aid for three years before becoming an associate with the real estate firm Marcus and Millichap, where she said she was a real estate broker \u201cspecializing in medical office properties.\u201d<\/p>\n Ever active on social media, Gehrke proudly posted \u201cmoved to central Scottsdale\u201d in 2017.<\/p>\n Subsequent posts show her traveling, playing golf and attending Women\u2019s Enterprise Foundation events.<\/p>\n Another Facebook post tracked her employment:<\/p>\n \u201cStarted New Job at APEX Medical, 2022 \u2014 Co-Founder.\u201d<\/p>\n Butland stresses Gehrke \u201chad extensive employment history in medical sales and earned $7,000 per month prior to her arrest managing a building that she owned.<\/p>\n \u201cBut despite abundant family support, healthy surroundings, educational opportunities, ownership of real property, and gainful and lawful employment earning over $80,000 per year, Gehrke opted to take a different path.\u201d<\/p>\n No sob stories here, the feds say:<\/p>\n \u201cUnlike many defendants who commit federal felonies, Gehrke had every advantage and every opportunity to live a comfortable and law-abiding life. Instead, she used her intelligence and savvy to unlawfully enrich herself at the expense of others.\u201d<\/p>\n Rather than the Department of Probation\u2019s recommendation of 186 months\u2019 imprisonment, Butland insists \u201ca more significant sentence is warranted to reflect the seriousness of Gehrke\u2019s conduct, promote respect for the law, and provide adequate deterrence.\u201d<\/p>\n Though his sentencing memo does not provide a specific number of years requested, Butland provided the federal judge with examples of three others convicted of Medicare fraud between $66 and $746 million.<\/p>\n Those three each received 20-year sentences.<\/p>\n Millions seized<\/strong><\/p>\n Last summer, federal agents raided the sprawling Gehrke-King Scottsdale home \u2013 a chip shot from the Phoenician.<\/p>\n The feds seized $350,000 in cash from safe deposit boxes at the house, as well as gold bars, coins and jewelry with an estimated value of $525,000.<\/p>\n Using money they later admitted they obtained fraudulently, the couple apparently went on a wild spending spree for nearly two years.<\/p>\n Most of the loot, they will never see again.<\/p>\n According to a federal court filing, homes, accounts and luxury vehicles \u201csubject to forfeiture because it is property, real or personal, involved in the offenses of conviction, or property traceable to such property involved in the offenses\u201d include:<\/p>\n\n