Zynex Inc. to settle claims of healthcare, securities, and mail fraud, according to RI US Attorney

LocalZynex Inc., a medical device company based in Colorado, has officially agreed to settle claims of health care, securities, and mail fraud as confirmed by the U.S. Attorney’s Office in Rhode Island. This resolution includes admitting to engaging in a conspiracy to commit various violations, such as health care fraud, securities fraud, mail fraud, and other related offenses. The company entered into a non-prosecution agreement with authorities, pending approval from the bankruptcy court in the ongoing Chapter 11 proceedings. As outlined in the agreement, Zynex will make payments ranging from $5 to $12.5 million, contingent on the company’s earnings and profits during the specified period.

U.S. Attorney Charles Calenda stated that under this agreement, Zynex will be required to forfeit all unpaid claims submitted before September 1, 2025, including those submitted while TRICARE payments were suspended. The forfeited claims amount to more than $85 million billed to TRICARE during the suspension period and over $13 million billed to other payors and patients. In addition to the financial aspects, Zynex has also admitted to fraudulent actions such as submitting excessive and improper claims for medical devices and supplies, resulting in the collection of more than $873 million. Furthermore, the company shipped and billed for medically unnecessary supplies in significant quantities per patient each month.

To rectify these wrongdoings, Zynex has committed to implementing enhanced compliance measures and corporate governance reforms to prevent future misconduct. This proactive approach aims to strengthen internal oversight and ensure accountability under new leadership within the organization. Additionally, Zynex has pledged full cooperation with ongoing government investigations, demonstrating a commitment to transparency and integrity moving forward.

U.S. Attorney Charles Calenda highlighted the significance of this resolution, acknowledging the severity of the fraud committed by Zynex while also recognizing the positive strides made under new management. The agreement illustrates the government’s willingness to consider reform efforts and cooperation when reaching a resolution with companies involved in fraudulent activities.

Former Zynex CEO Thomas Sandgaard and former Chief Operating Officer Anna Lucsok were previously indicted for related charges, underscoring the far-reaching implications of these fraudulent activities. The FBI and other law enforcement agencies involved in the investigation have emphasized their dedication to uncovering and deterring fraud within the health care system to protect taxpayer-funded programs and uphold ethical standards within the industry.

The resolution of this case reinforces the commitment of regulatory bodies to safeguarding federal health care programs and ensuring that companies uphold their responsibilities ethically. As investigations progress, further details may emerge that shed light on the extent of the fraudulent activities perpetrated by Zynex and its former executives. Stay tuned for updates as more information becomes available regarding this developing story.