Prosecutors: Healthcare Fraud Defendants Has Access to Millions in Cryptocurrency to Aid Potential Flight

News | July 10, 2024 By:

On Monday, June 24, 2024, the United States government filed a motion seeking the pretrial detention of defendants Alexandra Gehrke and Jeffrey King in the United States District Court for the District of Arizona.

According to the motion, Gehrke and King were indicted on multiple felony charges related to an alleged massive healthcare fraud and money laundering scheme. Prosecutors claim that between November 2022 and May 2024, Gehrke, King, and their co-conspirators caused over $900 million in false and fraudulent claims to be submitted to Medicare, TRICARE, and other government healthcare programs. It’s alleged they fraudulently billed for medically unnecessary wound dressing treatments on vulnerable patients, netting over $600 million in improper payments.

The government argues Gehrke and King pose a serious flight risk given the severity of the charges, which carry maximum penalties as high as life in prison. They cite evidence recovered from several search warrants indicating the defendants were aware criminal charges were imminent. This includes handwritten notes instructing their housekeeper to contact Gehrke if an indictment was issued during her planned trip to Europe. Police also found books in the defendants’ home and luggage about disappearing without a trace and understanding criminal law.

Prosecutors say bank records show Gehrke and King transferred millions between various accounts in the months before their arrests, and may still have access to tens of millions more not yet seized by investigators. They note King withdrew over $6.7 million just months ago. Cryptocurrency also allegedly factored in – digital ledgers and seed phrases were found allowing access to the defendants’ cryptocurrency holdings, along with instructions on transferring the assets if Gehrke used a code phrase. Over $350,000 in cash was also seized from their home and safe deposit boxes.

The motion further points to the defendants’ lies and omissions when interviewed by pretrial services as evidence they can’t be trusted to follow court orders. They significantly underreported net worth, with over $52 million and $8 million in additional assets seized from Gehrke alone. Gehrke also tested positive for illegal drugs but denied use. Both defendants were also inaccurate about recent foreign travel.

The government argues no bail conditions could reasonably assure the appearance of Gehrke and King in court given their substantial resources, preparation to flee, and demonstrated dishonesty.

Please contact BlockTribune for access to a copy of this filing.