HealthSplash Owner Sentenced to 19 Years for $1 Billion Medicare Scheme Built on Foreign Call Centers

The bottom line: DOJ described the scheme as an international telemarketing system, and the case went past the callers to the owner of the technology platform that turned their calls into billable orders.

Here is what happened

After a 23-day jury trial that concluded in April 2026, Blackman was convicted of conspiracy to commit health care fraud and wire fraud, conspiracy to pay and receive kickbacks, and conspiracy to defraud the United States and to make false statements in connection with health care matters. The court will determine restitution and forfeiture at a later date.

His co-defendant, Gary Cox, was sentenced to 15 years in prison in December 2025.

Assistant Attorney General Colin M. McDonald of DOJ's National Fraud Enforcement Division said the scheme "lured hundreds of thousands of elderly and disabled Americans into a sophisticated international telemarketing system with one goal: stealing as much as possible from the Medicare trust fund."

How the scheme worked

According to court documents and evidence presented at trial, as described by DOJ:

1. The targets. Blackman and his co-conspirators targeted hundreds of thousands of Medicare beneficiaries to get them to accept medically unnecessary orthotic braces and other items.
2. The platform. HealthSplash acquired Power Mobility Doctor Rx, LLC (DMERx) in September 2017. DMERx generated false and fraudulent doctors' orders for durable medical equipment (DME) and prescriptions for other items.
3. The kickbacks. Pharmacies, DME suppliers and marketers were connected with telemedicine companies that accepted illegal kickbacks and bribes for signed orders created on DMERx. Blackman and his co-conspirators took a cut for the referrals.
4. The false orders. The orders falsely stated that a doctor had examined and treated the beneficiary. In fact, doctors were paid to sign without any meaningful interaction, and in some cases with no interaction at all.
5. The cover-up. The scheme was concealed through sham contracts and by changing the orders to avoid Medicare audits, including by removing references to telemedicine.

The undercover call

The most direct evidence came from an undercover agent who posed as a Medicare beneficiary. According to DOJ, the testimony and evidence showed the scheme "in action," starting with a foreign call center that pushed the agent to agree to multiple braces and ending with a doctor signing bogus orders on DMERx. One order claimed the doctor had conducted tests that can only be performed in person. The doctor never spoke with the agent.

The numbers

• DME suppliers and pharmacies paying the kickbacks billed Medicare and other insurers more than $1 billion.
• Medicare and the other insurers paid more than $450 million on those claims.
• Medicare was billed for orthotic braces for more than 346,000 beneficiaries, an average of four braces per beneficiary.
• According to DOJ, Medicare was billed for at least 21 orthotics prescribed through DMERx to over 1,200 beneficiaries.

The Department of Health and Human Services Office of Inspector General (HHS-OIG), the Federal Bureau of Investigation (FBI), the Department of Veterans Affairs Office of Inspector General (VA-OIG) and the Defense Criminal Investigative Service (DCIS) investigated the case.

Why it matters

This case is prosecuted as health care fraud, not under the Telephone Consumer Protection Act (TCPA). But the business model will look familiar to anyone in lead generation. Outbound calls generate interested consumers. Those consumers are passed down a chain. Somebody at the end of the chain gets paid per order.

Three points are worth noting for marketers and platforms:

• Platforms are not shielded by distance. Blackman did not make the calls. He owned the software that converted them into orders. A jury convicted him, and the court imposed a 19-year sentence.
• Pay-per-order arrangements draw scrutiny. The kickbacks in this case were tied to signed orders. Compensation that rewards volume without regard to medical need is a well-known enforcement target in health care marketing.
• Call centers are evidence. The undercover call let prosecutors show the jury the scheme from the first pitch to the final signature.

Practical takeaways

1. If you sell or buy health care leads, know exactly how the consumer was contacted and what they were told.
2. Avoid compensation tied to orders, prescriptions or claims in any federally funded program without careful legal review.
3. Audit foreign call center partners. Ask for scripts and recordings, and listen to them.
4. If your platform generates documents that others rely on, such as orders or consent records, build controls against misuse.
5. Treat aggressive pitches for free braces or extra Medicare benefits in your traffic as a red flag.

Telemarketing was the front door to this scheme. Compliance programs should watch that door closely.

Source: DOJ, Owner of Health Care Software Company Sentenced to 19 Years in Prison for $1B Medicare Fraud.